Thomas Shannon thinks that democracy lessons in his country’s southern neighbours have not been well taught, so he wants to go back to basics in a bid to combat a rising tide of left-wing populism. “The big challenge right now is how you link democracy and development, how to convince people that democracy will deliver,” Shannon, the top US diplomat for Latin America, tells Emerging Markets. “One of the reasons you are seeing a level of political effervescence in the region is because there’s dissatisfaction from many with the ability of governments to deliver the goods.”
Shannon’s patient approach, striving to explain and educate, contrasts with the more direct line of predecessor Roger Noriega. Noriega promised in this paper a year ago that President George Bush’s freedom agenda would be laid out “in very clear terms” to create a Latin America where “governments are not only democratic but where people are genuinely free”.
The new assistant secretary of state, amid criticism that the US has alienated parts of the region and left itself open to charges of imperialism, is taking a slightly softer tone: “We’re looking for people who want to work with us; those who don’t want to work with us can go off and walk that lonely path,” says Shannon, who took over the Latin American dossier in October.
Dissatisfaction
A string of election victories for left-of-centre leaders across the region has highlighted a growing discontentment with the failure of previous US-backed regimes to transmit the fruits of economic growth to their poorer citizens. While Brazil’s president Luiz Inacio Lula da Silva, a free marketeer with a social agenda, is a more typical example of the new breed of politician than Venezuela’s Hugo Chavez, the shift in political standpoints has diminished the northern superpower’s sway over the region.
Chavez’s star is rising along with oil prices. After exporting $48 billion of crude last year, the Venezuelan leader has been able to model a new brand of economics and market it to his neighbours.
The Venezuelan leader has railed against US policy and prophesied that his country is an invasion target. In preparation for that event, Chavez is aiming to create a military reserve of 2 million, or one in five adults, by 2007. The force would be almost double its US equivalent.
The windfall from Venezuela’s black gold has also enabled Chavez to buy up debt from Ecuador and Argentina, helping the latter pay off IMF loans early. In addition, he’s shored up support among his allies by supplying oil on favourable terms to Cuba, Bolivia and other countries.
Oil on troubled waters
Whatever their political differences, the US and Venezuela are, for the moment at least, linked economically and unavoidably. Chavez’s oil is heavy and high in sulphur and requires special refining which is currently most easily available in the US. In addition, the transport cost of reaching other potential new markets such as China or India acts as a deterrent to would-be buyers.
Shannon stresses that Venezuela isn’t a US problem and that other governments are equally responsible for supporting the democratic process within the country.
“What’s important is in some instances Venezuelan civil society is under assault, and I think it’s important that the international community work, to keep democratic opposition in Venezuela and give Venezuelan civil society organizations the ability to keep that space open.”
One example that has drawn the attention of the Bush administration is the trial of non-governmental election watchdog Sumate, accused of conspiracy against the state for having accepted funding from the US congress-backed National Endowment for Democracy. Shannon’s boss, Condoleezza Rice, has described the local investigation as a “kangaroo court”.
Nevertheless, Shannon claims to be more worried about exaggerating the threat posed by Chavez than underestimating the danger. He warns that the renegade president could become a distraction from the ultimate goal of building a democratic and economically prosperous South and Central American bloc. Chavez’s attempts to influence events in the region have had only a “marginal” impact, according to Shannon.
Not everyone’s convinced about this.
“The Chavez approach is really a challenge; it’s a much bigger thing than originally thought,” Ricardo Hausmann, Venezuelan planning minister in the early 1990s and now a professor at Harvard, tells Emerging Markets. “The US reaction has been late in coming, lousy and ineffective.
“So far it’s been more rhetoric than policy, and they haven’t taken full account of the fact that, because there are no checks and balances in Latin America, it gives Hugo Chavez much more capacity to act internationally than the US. Venezuela could probably out-compete the US in its ability to supply money to its neighbours.”
Bolivian watch
Less intransigent than Chavez, but with a history of anti-American diatribes, Evo Morales remains on the US watchlist, according to Shannon. The Bolivian leader’s continuing role as head of the country’s coca growing movement has spurred concern in Washington that he may encourage production of the primary material for cocaine production. Bolivia is already the world’s third biggest cultivator of the drug after Peru and Colombia.
“We’re still in the process of working this through,” Shannon replied when asked whether he had come to any conclusions on how closely Bolivia and the US could cooperate.
“So far so good but this is a process that still requires some time and work,” Shannon says.
Rice met Morales last month in Chile to urge greater cooperation in the war on drugs, stressing that she wanted to maintain good relations with his country. After the meeting the Bolivian leader presented Rice with a lute decorated with coca leaves.
As South America’s poorest nation, with GDP per capita of $2,700, less than half that of neighbouring Peru, Bolivia is dependent on foreign aid with the US as its biggest benefactor. Morales is therefore forced to employ a delicate balancing act between the interests of the coca farmers he represents and his northern donor.
That’s sometimes led him into conflict with both sides. He earned criticism from growers for refusing to restrict US anti-drug agents from some areas, yet has angered the Bush administration with verbal swipes and his close ties with Chavez and Castro.
AMBIGUITY
Morales has lashed out at America’s interference in his country and the rest of Latin America while at the same time complaining at a lack of funding, illustrating what Ian Vasquez of the Cato Institute sees as the ambiguity of US-Latin relations.
“Latin America has always been somewhat schizophrenic when it comes to the US: when the US is involved in the region it complains about US heavy handedness, and when the US is not as actively involved it complains of neglect.”
One country that certainly isn’t complaining about neglect by the world’s dominant superpower is Mexico. However, tensions between the two neighbours, which have been rare since the election victory of Vicente Fox ended 71 years of rule by the Institutional Revolutionary Party (PRI) in 2000, have begun to mount again.
Angry disputes over US jurisdiction in enforcing its Cuba trade embargo and border flair-ups have been fuelled by a bitterly-fought election campaign.
Shannon brushed off suggestions that the choice of Fox’s successor, to be decided later this year, will be an important determinant of how closely the two countries can cooperate. Leftist Andres Manuel Lopez Obrador has assumed the position of favourite for the July 2 election on a platform proclaiming independence from US influence.
“Our relations with Mexico are going to be strong no matter who wins,” Shannon insists. “Both of us have interests, and both of us depend on each other in ways more powerful in shaping the relationship than any individual political leader.”
More important will be the ongoing debate on immigration, which will “affect the tone of the relationship in the near future”, he says.
US proposals to extend a fence along the border to curtail illicit immigration have sparked anger among Mexican politicians and people.
“For Latin America, that’s a strong signal of what the attitude of the US is,” says Moses Naim, editor of Foreign Policy magazine and former Venezuelan minister. Naim points out that Shannon and the state department can only have a limited role to play in relations with Latin America. Trade, the war on drugs, the stance of the military and the actions of local politicians all help shape the diplomatic environment.
Indeed, the tensions and instability within Latin America are of the region’s own making, Naim says.
Filling the void
“Given the vacuum for ideas in the region, bad ideas are filling that vacuum. That’s not a problem for Washington; it’s a problem for Latin America.”
Nevertheless, Shannon clearly thinks his government does have a responsibility to promote the case for free markets and economic liberalism in South America. And the results of those efforts will extend well beyond the Spanish- and Portuguese-speaking world.
“If we can’t make it work in the Western Hemisphere, if we can’t make it work in a region already committed to democracy, already committed to free markets, then our ability to make it work elsewhere in the world is going to be questioned,” Shannon says.
If Latin America is to become a blueprint for the triumph of US-style democracy across the globe, the coming year will be critical. With at least nine elections taking place across the region – from Mexico to Nicaragua – Shannon will be watching anxiously for whether the people are listening to his message or following Chavez on a path which may turn out to be not so lonely after all.