A friend in Buenos Aires sends this analysis...
"Latin America has suddenly become very interesting. There are intersecting issues - domestic and geopolitical. There is a general way to state this. In times of crisis between great powers, local issues get energized by the international conflict. The changes in Russian- American relations reverberate in corners of the world that have been neglected since the Cold War. There are a lot of shifts taking place everywhere, and we have mentioned them all in previous Guidances. Let's focus on Latin America this week. That is not a place that has been really exciting geopolitically in the past, but it is getting there now.
"1. Bolivia nearing the boiling point: Bolivia is in a near civil war, with regional powers - particularly Brazil - looking on uneasily. The United States is confronting Evo Morales, the radical president of Bolivia. It is a very traditional confrontation, with a Latin American radical challenging the United States. New powers like Brazil are in the mix, and Russia could use the crisis to give the United States other headaches. We need to watch both internal and global implications.
"2. Venezuela and Russia: The Venezuelans and the Russians are getting close. The military implications are trivial at this point, but having a potential patron energizes Venezuela in new ways and gives it confidence. We need to watch the effect on foreign companies in Venezuela and long-term collaboration.
"3. Colombian guerrillas: The Revolutionary Armed Forces of Colombia (FARC) had ties to Cuba and the Soviets in the old days. Those FARC leaders who are still alive and not in nursing homes still have active contacts. The Russians could really jerk the American chain in Colombia - and depending on how the United States acts in the former Soviet Union, the Russians will do just that. We need to watch the FARC now and see if it reaches out to the Russians.
"4. Nicaragua: Nicaragua - dormant since the 1980s - has its old President Daniel Ortega and its old rhetoric back, and it is backing Russia in Georgia to the hilt. We need to watch Nicaragua and the rest of Central America, especially El Salvador, to see if this is going anywhere.
"5. Mexico's cartels: The cartels in Mexico are fighting the government and each other. If Ukraine is invited into NATO, the Russians would love to give payback in Mexico. The Russians used to have close ties to the Mexican left, and Russian organized criminal groups are currently involved in criminal activities such as prostitution and human smuggling in Mexico. And certainly, through the Cubans, the Russians know their way around Latin American drug traffickers.
"Instability in Mexico would be an interesting strategy for Russia - not that Mexico needs much help there. But the smuggling routes could carry all sorts of goodies into the United States.
"6. Cuba: Cuba remains the mystery. Havana is oddly quiet. Are there discussions going on with the United States? There should be, as far as the United States is concerned, but with an election coming, such talks are hard to set up. The Cubans don't seem to want to play the Nicaraguan game. One scenario is that after the election, the Bush administration could move to normalize relations with Cuba and take the heat. The administration's ratings will not matter and cannot go any lower. There is no evidence this will happen; it is just a theory.
"7. Russia's behavior in Latin America: In general we need to see whether the Russians start renewing old friendships on the Latin American left, with intellectuals and ambitious colonels and majors.
"Watch Argentina, Chile and Brazil. They are the big targets always."
Until tomorrow,
Bill Bonner
The Daily Reckoning Australia
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Comment by tony nolasco on 23 September 2008:
wow, pretty interesting insight. I'm going to follow your predictions and see how well you do. On my favorites.
Comment by Stephen Heyer on 24 September 2008:
Yes, I've been in South America, mostly Argentina, Chile and Uruguay for extended periods three times in recent years and while the problems were apparent, I was very impressed. With educated populations, good resources and agriculture and good infrastructure and institutions (by world standards) these countries are going to really go once they get their act together and this seems to be happening.
Temperate South America, where I mostly was, is nothing like people imagine, in fact I'm reminded of the description of Argentina and Chile as the most American of the European countries.
Australia, my country, was once very close to Argentina and Chile, in fact we were considered as sister countries, but somehow Australians quite forgot South America. That now seems to be changing, partially I think because the long domination of the Australian mental and political landscape by America is fading, partially perhaps because the increasing influence and economic importance of China, both in Australia and South America, forms a common link and partially because we share many interests, similarities and problems.
By the way, it is hard to understate the dislike many (most?) of even the most reasonable, nice and educated South Americans feel towards the USA. Listening to them talk of the results of USA interference in their countries and the direct effects on them, including imprisonment, torture and the death of loved ones, you begin to understand why they feel that way.
Australia and Australians, by the way, in my experience are regarded much more highly, perhaps because quite a few on them spent some years in Australia when they were granted asylum there.
Yes, from the USA point of view these countries really do bear watching. I suspect they will not be that worried if some of their actions cause problems for the USA.
Comment by Chauka on 24 September 2008:
South America was doing fine growing under the radar, tilting left yes, but all the signs were there that the left would succumb as long as democracy held. They even appear to have learnt fiscal lessons (except maybe Argentina). Even Venezuela's democratic process held up last time to vote down Chavez's constitutional changes. And it wasn't Russia that sent latin america down recent leftist paths, they've got old issues like the indigenous and elite thuggery & corruption to excise (and the US long playing its part haunts it). Most readings have Russia holding Chavez in contempt, but when threats are made, bedfellows can't be choosers, and I'm sure thats what the Russians are saying to the US.
But are you surprised that threats against leftist regimes in the region flushes out Nicaragua? You might have your Russian geo-political views shaped by 50's experiences of practising cowering under your school desk, but they had far closer and more recent experience of US adventurism. Brazil is also not a "power" state, they virtually have no military, and they want to stay under the radar. Lula may be of the left but he doesn't want Venezuelan or Bolivian leftists giving the US any excuses. Brazil's main defence is the daunting task of occupying it. But when the US stuffs up in central asia, and finally works out that imported sugar based biofuel is a must, I wouldn't like to be in power or wearing a uniform in Cuba.