Iranian Embassies, Coca Tea, and a Failed Tour

This is number 3/2007. We are nearly finished with a report on Mexico's drug wars, updating a piece I published on October on the possibility of a Mexican Mega Cartel. A report on Iranian and Russian influence in South America will be the last for some time. We hope to receive your feedback on the usefulness of these reports over the coming weeks.

In this edition:

Upon publishing version 2/2007, where I mentioned the possibilities of heavy crude refineries in China, I received messages from three independent sources, one of them with Brazilian energy company Petrobras, saying this was indeed the case. We should watch closely Chinese maneuvering to buy more Venezuelan oil.

Meanwhile, Iran has announced it will open embassies in Chile, Colombia, Ecuador, and Uruguay with a representative office in Bolivia. At first glance this line may appear troubling. Iran, however, would like to assure you that Latin America holds opportunity for Iranian businesses. Embassies are the first point of contact for any country to tighten ties with another. I wonder about what Iran intends to do in these Latino states once the embassies are established. Stay tuned.

Two coca leaf factories are currently under construction in Bolivia. With Venezuelan funding, these coca factories will begin producing coca leaf products, such as coca tea, by September or October of this year. There is little market for coca leaf products in Venezuela. The United States is the real market for a product like coca tea. But it is the last country that will import legal coca products. The irony is that by de-vilifying the coca leaf, and importing coca tea the US government could bring Bolivia closer, using Venezuelan-funded factories to revolutionize the relationship between Washington and Evo Morales.

Chavez has gone on the offensive since arresting a father and son team in the National Guard for plotting to kill him. The Venezuelan leader will now hunt for possible threats to his life. Chavez benefits from revealing plans to assassinate him however real or fabricated. They play into his strategy of constantly reminding his followers of the struggle associated with the revolution. Yet real attempts on his life are likely to increase in the coming months. Political risk is alive and well in Venezuela.

Finally, the results are in. US President George W Bush's tour of Latin America was a failure. He signed no major deals, made no promises, and was forced to swallow the harsh words of thousands of protestors. His press secretary, former Fox journalist Tony Snow, made no announcement to the press pool traveling with the president until 17 hours before the end of the tour. Even Guatemala, long a client state of the United States, turned the screws on the immigration issue - not at all fearful of a reprisal for bad behavior. Bush's tour served to solidify one fact: Washington lost Latin America under his watch.