The inevitability of Latin American Polarization: Brazil versus Venezuela

For any political scientist, economist and historian who may not be entirely familiarized with the dynamics of Latin America’s historical legacy and some of the recent issues staining the rosy pictures of cooperation, friendship, and consensus often publicized in the area’s main capitals, it would have appeared that the region could be on the brink of reaching a respectful level of maturity and might even have resolved some serious issues, challenges and conflicts which have plagued many of its countries for nearly two centuries of self-determination. Yet, I fear that any intellectual “neuter observer” would be rather disappointed with the performance of the majority of Latin administrations upon closer examination. Even taking into account the latest global economic crisis and despite the continued economic development undergone in some nations (most notably Chile, Brazil and Mexico), it is clear that, the traditional ghosts of income disparity, regional rivalry, corrupted politicians, authoritarian “rulers”, along with the persistent threat posed by Drug Lords and terrorist organizations remain looming over Latin America’s horizons.

One would also have thought that the establishment of UNASUR and the increased number of smaller regional blocs, such as MERCOSUL, might seriously represent mature regional endeavors to shed differences aside in order to address some of the most important issues (ranging from trade, energy, fresh water and poverty to mutual defense, regional currency and improved infra-structure). Yet, the more one examines some of the current “noble objectives” in closer scrutiny, the more it becomes evident that Brazil and Venezuela will be found running (or attempting to run) the show; each with a completely distinct political agenda, bound to be deemed irreconcilable in the long run.

In addition, since the main economic and political/military organizations established in the region appear to be rather questionable in light of the fashion whereby Caracas and Brasilia appear to view their intended purposes, the embryo of uncertainty has already emerged. Because, MERCOSUL - formed about 25 years ago - included only four members: Brazil, Argentina, Uruguay and Paraguay, while excluding Venezuela, Colombia and Chile, it could be scarcely be considered a fully Regional Pact. Although Venezuela has subsequently applied to join this primarily Southern Cone group, its dubious political intentions vis-à-vis attaining full membership has understandably been prevented by the Legislatures of both Brazil and Paraguay; the Chilean exclusion, clearly an error in light of the health and importance of its economy, was possibly deliberate in light of its long standing disputes with neighboring Argentina and its declared intent to join NAFTA; Colombia’s omission, however, is evident, in view of its close alliance with the United States and insurmountable fiendish stance against Venezuela. As such, because MERCOSUL neither includes nor impacts most of the region’s main economies and because Venezuela is likely to treat MERCOSUL and UNASUR as nearly interchangeable political structures, thereby possibly undermining the both organizations, it seems like additional seeds of discord between Caracas and Brasilia have already been planted.

Yet, there are many other specific factors which appear to highlight the contrasting stance of the two leading Latin American regional powers…

Venezuela has recently established a mini-alliance composed of a growing list of smaller, faithful, and poorer client states (Cuba, Bolivia, Ecuador, Nicaragua and possibly Honduras in the near future) and undoubtedly intends to assume the role of Regional Leading Power. Unlike Cuba during the 20th Century, Venezuela has embraced a relatively more discrete version of Fidel Castro’s revolutionary ideals, currently labeled as “Bolivarian”, but whose ultimate goal is also to spread its radical political-economical ideals throughout the region, thereby transforming Caracas into a 21st Century version of a “Latin Moscow” or “New Havana” of the modern Western Hemisphere…

Brazil, on the other hand, attempting to maintain the self-delusional role of a “Well-Behaved Neighbor” and “Moderate (New) Socialist”, appears to be relatively more discrete in its quest for the role of Latin American Leader. While the “Sleeping Giant” is likely to have a sincere disposition to assist others, its current administration ultimately intends to secure African support and to be perceived by the developed world and the United Nations, as a robust adolescent who has recently reached maturity and is therefore ready to join the Main Group of nations either at the “bottom of a possible G-9” or at least to obtain a permanent seat in the Security Council. Clearly, due to its growing pride and self-delusion, the current administration in Brasilia seems to be determined neither to remain passively watching major global decisions from afar - at a remote UN seat – nor to continue being invited to G-8 meetings merely for having “desert” (using the Brazilian’s president words).

While Breton Woods established the rules for commercial and financial relations among the world's major industrial states in July 1944 thereby establishing the foundations of a healthy western economy for the second half of the 20th Century, the Venezuelan elected dictator appears adamant to reach an equivalent agreement for Latin America today with his plans to establish the Bank of the South (designed to be based in Caracas) in order to allegedly unite the “financial needs” a socialist Latin Brotherhood for the current Millennium. Yet it does not appear to have been substantiated by concrete plans or viable financing for such an elusive Institution; most importantly, I could hardly anticipate any forthcoming believable mechanism to emerge in order to prevent the inevitable series of fraud and misuse of precious resources, which would inevitably surface in the region. Almost certainly, an endless stream of funds and other assets is bound to flow into secrete private accounts of Venezuelan agents entrusted to “finance” electoral campaigns of left-wing candidates across Latin America with the support of La Paz, Quito, Havana and Managua.

Meanwhile the Brazilian and Argentinean presidents seem to be forging ahead with plans to formalize or at least increase the use of local currencies in their bilateral and other regional trade thereby removing the US Dollar as the common monetary unit, allegedly (and officially) on account of their central banks need to strengthen cross-border operations without serious consideration for their historically dramatic fluctuations in the currency markets prior to the current relatively stable financial setting. Interestingly Brazilian exporters have been using the system more than their counterparts in Argentina, which, one might argue, merely reflects Brazilian preference for dealing in their own currency, whereas Argentine businessmen may be more comfortable with dollars than with pesos. However, because Brazil is Argentina’s main trading partner, and because Argentina has repeatedly postponed the full implementation of “local currencies swap” to promote bilateral trade, Brasilia is now threatening Buenos Aires to take action with the WTO for imposing non tariff barriers to trade thereby demonstrating the actual intentions of the Brazilian government which appears to flex muscles utilizing economic tools. In this connection, one should recall that the last Doha round of talks failed when it was very close to a successful conclusion in light of the last minute switch of the Brazilian position on "Protectionism" thereby upsetting not only Argentina but also India, which represents Brasilia’s closest ally in Asia as well as one of the largest importers of Brazilian Ethanol.

As such, either spreading neo-Marxist ideals within a region scarcely prepared to embrace its inevitable totalitarian populist values or promoting questionable ideals of “economic integration” whereas fomenting discord in international forums, Venezuela AND Brazil proceed with alleged "common plans" without any actual regional consensus, each pursuing completely disparate and unrealistic goals in order to be poised, in the long run, to achieve their hidden agendas; thereby rendering most “agreements” between these nations as inevitable sources of significant conflict.