This is a source for analysis, interviews, and commentary on security in Latin America. Herein you will find rumors, the results of off the record interviews, and information you'll not find in international or United States news media.

Tuesday, February 16, 2010

Brazil: Still Against Honduras

Brazil's Minister of Foreign Affairs, Celso Amorim, spoke out against Honduras on 16 February, claiming that elections should not be used to "wash" coup d'etats.

His remarks underline Brazil's continued chagrin over the forced removal of Zelaya, and I'm interested to see how Brazil's stand against Honduran President Lobo will play out across the region. As the US moves to support the Central American country, Brazil may find itself standing alone in the region. So far, however, many countries have yet to show support.

Wednesday, February 10, 2010

War and Trade

The Venezuelan government has replaced Colombia with the United States as a main supplier of meat, fabric, clothes, cooking oil, and pharmaceuticals among other items.

Since July 2009, when President Chavez ordered a freeze in Venezuelan-Colombian relations, diplomatic ties have been severed with commercial ties under considerable restraint.

Chavez has looked to China, Argentina, Brazil, Uruguay, Bolivia, Ecuador, and now the United States to provide goods that Colombia previously sold to the Venezuelan market.

Obviously, this is a clear case of Chavez placing political considerations over economic good sense. Transaction costs alone dictate that the farther an item has to travel before arrival in market, the higher the cost, apart from the time it takes to establish new relationships, determine which products to buy, and so on.

Replacing Colombia with Ecuador or Venezuela probably doesn't make much of a difference, and given the extremely low cost of Chinese goods, there's probably an acceptable pay off there, economically and politically.

But when Chavez turns to the "evil empire" for a long list of goods, he's increasing transaction costs and further deepening the double standard under which his government operates with the United States.

Chavez is happy to sell the US oil and buy US goods, but he's just as quick to claim that the US is about to invade.

At the core of the decision to purchase goods from everyone but Colombia, however, is that Chavez is distancing Venezuela from his western neighbor, and the de facto nature of the two country's close commercial ties has been the strongest argument for why Caracas will not go to war with Bogota.

Yet the war drums continue to beat. Rumors of war circulate, and on both sides information continues to circulate about military activity on the border, including illegal fly overs and tense troop encounters.

As I wrote before, Venezuela would not do well to enter a protracted war with Colombia, but a quick and dirty firefight that ends before even the media picks up on it would serve Chavez's rhetorical purposes well - all just in time for the September legislative elections…

Monday, February 01, 2010

Chavez, CTD?

When I worked as an emergency medical technician many years ago, we used a short-hand lingo to describe the status of victims. We used "CTD" to describe someone who didn't have long to live. Their lives, like the water in a bathtub soon to disappear down the pipes, was "circling the drain."

With all the recent protests and such in Venezuela, I've fielded a few questions here and there concerning Chavez's chances for political survival. I have to say, they still look pretty good. Students continue to protest, and they have solid grievances, from the closure of television stations to energy and water shortages, and violence. In Caracas alone, some 34 people died from 29 to 31 January.

And on 1 February, a group of former Chavez supporters published their call for him to resign. This group, known as the Polo Consitutional "urged" the ruler to resign.

Yet on the same day, Chavez opened government coffers once again to solve his problems. He has announced a US$1 billion fund for investments in Venezuela's energy infrastructure, announcing a raft of projects designed to fill the gap between the country's energy demand and stagnant supplies, focused mostly on the Guri damn hydroelectric plant.

Ahead of the September legislative elections, we've seen Chavez stumble but he has a long way to go before he falls. The recent currency devaluation doubled the amount of money he has available to spend inside Venezuela. And as the price for oil remains relatively high, Chavez continues to collect foreign exchange. We're watching a long list of items, however, to see where and when support for the embattled president will begin to deteriorate. At the top of the list is food and water. Inflation, security, and jobs round out the top four.

Chavez has his work cut out for him, but there's plenty of time before the elections. As one local journalist said, Chavez will shoot for 70% control of the National Assembly, but even if he wins 60% he'll still be happy and solidly in control of the country's legislative agenda and output.
Powered by Southern Pulse |