Russia, China and Latin America
- Details
- Created: Thursday, 24 February 2022 19:19
- Written by Alvaro Michaels
The contemporary stagnation in both US and EU capital accumulation, further hit by the Covid-19 pandemic, has accelerated the aggressive and militaristic nature of state monopoly capitalism. Today it paints lurid pictures of Russian and Chinese ‘aggressions’ and ‘threats’ to justify expanding its own military budgets. ‘Western’ imperialism, checked in its campaigns in the Middle East, is conscious of many challenges to its power and influence. It has opened up a propaganda offensive aimed at its own populations, against both China and Russia, to permit greater arms expenditure and reassert its ‘global role’. One focus of anti-Chinese and anti-Russian propaganda is the attack on the development of their better relations with Latin America. ALVARO MICHAELS reports.
The fundamental factor
The ‘foreign policy’ of all imperialist states is determined first by the size and extent of capital accumulated in the hands of its ruling classes and is driven by their need to continue that accumulation. This demands open access to the means of production world-wide, and the broadening of markets to realise its profits. Imperialism’s innumerable variations in foreign policy rest on this fundamental drive.
In Latin America, US imperialism struggles to retain its influence and extort profit as it sucks out resources. Its ‘back yard’ has produced, slowly but surely, increased resistance to more than a century of murderous and hypocritical manipulations by US governments. The recent electoral victories of progressive and social democratic forces in Bolivia (2020), Chile, Honduras, Nicaragua and Peru (all in 2021), each the product of long bloody conflicts, are witness to this resistance. In Argentina (2019) and Mexico (2018) too, national sentiment bristled against US interference and saw openly reactionary governments rejected. This pattern is due to be repeated in Colombia and Brazil in 2022. Above all, and despite the most determined attacks and waves of lying propaganda, the long dignified and heroic struggles of the Cuban people, and the stubborn determination of the Venezuelan masses, have been a beacon to the poor of Latin America. By the end of 2022, none of the major Latin American economies will have subjectively pro-imperialist leaderships.
Critical factors in this historic shift are the political and economic agreements offered by the Chinese and Russian governments. This support is a response to invitations by Latin American governments, exhausted by debt, and the constant ‘conditions’ imposed by US and EU imperialism. Latin America and the Caribbean, the most unequal region on the planet, has been hard hit by Covid-19. With only 8% of the global population, it has accounted so far for about 30% of the world’s deaths from Covid-19. The then-incumbent right-wing governments failed to address the crisis. The Latin American and Caribbean region registered 304,000 daily cases of Covid-19 from 7-13 January 2022, a record since the start of the pandemic two years ago. Fixed long-term arrangements now agreed with the Russian and Chinese governments have offered stability and a new-found independence from the US economic stranglehold. To preserve its ever-less certain hegemony in Latin America, US imperialism is obstructing the development of these Sino- and Russo-Latin American relations. The efforts of the US government ‘Office of Global Affairs’ to make Bolsonaro reject 37 million doses of Russia’s Sputnik 5 vaccine and pressure on Panama not to invite Cuban doctors to assist with Covid-19 are two sordid examples.
Russia and Latin America
Like all foreign policies, Chinese and Russian relations with Latin America are bound up with their domestic processes. Both countries aim to develop a ‘multi-polar’ world in which no single country wields dominance. This presents a barrier to US and EU imperialist ambitions. The existence of the USSR severely compromised imperialism’s freedom of global action and had to be destroyed. These attacks did not cease after the collapse of the USSR. NATO and the EU aim to break any Russian government’s resistance to the full-scale exploitation of the natural resources of the huge Russian land mass, and its peoples. The EU carries out operations on every front to weaken the relations of the Russian government with the other eight members of the Commonwealth of Independent States. Especially now, ‘Western’ businesses are desperately seeking these countries’ resources to absorb their gargantuan surplus capital.
A new Russian ruling class, formed out of the collapse of a planned economy corroded by external threat and internal markets policies, has constructed a capitalistic economy. In 2020, its stock of foreign owned investment was about $447bn, but the new national bourgeoisie has centralised political power to ward off the predations of the same foreign capital. In 2020 Russia had a nominal GDP of $1.5 trillion, 7% of the $20.9 trillion of the US, or only 39% of Germany’s $3.81 trillion GDP. It is dependent on the export of oil and natural gas, both part-privatised but under the majority control of the Russian government, as is electricity. As part of its ‘Go Russia’ plan, it seeks to increase its foreign trade. Here, good relations with all countries are critical. From 2006 to 2016, Russia’s trade with Latin America increased by 44% to $12bn. Approximately half was to Brazil and Mexico. Russia imports agricultural products from Brazil, exporting mineral products, and metals. In 2016, Russia purchased 90% of its imported pork from Brazil, but Moscow then reduced this to protect its domestic producers. Lukoil invested $435m in Mexico’s Area-4 oil project in 2021 and Russian energy company Rosneft secured preferential access to Brazil’s Solimoes oil and gas basin in July 2019. Gazprom is working on oil and gas projects in Bolivia. Rosatom has signed agreements for nuclear cooperation with Argentina, Bolivia, Brazil and Mexico, but so far only a research facility in Bolivia is open. Nevertheless, compared to trade with Latin America by the US ($253.2bn in 2020) and EU ($206bn in 2020), Russian economic relations are quite limited. It is the political and moral support offered to Latin American states in their struggle for genuine independence from US and EU interference that is significant.
A sore point for US imperialism is Russia’s support for the countries which are explicitly building socialist societies, Cuba, Venezuela and Nicaragua. The past Soviet support for Cuba is well known. Moscow has helped finance and support modernisation of Cuba’s defence sector. As the Russian economy recuperated after 2000 it provided Cuba with generous debt relief. Rosneft started oil shipments to Cuba last year to help compensate for the drop in imports from Venezuela. The two countries are now working on energy and railway projects. Changes in Cuba’s economy provide new opportunities for Russian exporters. Despite Covid-19, trade turnover between the two nations in 10 months of 2021 was around $100m. This year, Russia became Cuba’s main tourism market since the latter has vaccinated almost all its population from two years upward.
Russia was a leading supplier of arms to Venezuela in the 2000s, helping to deter direct US intervention. Russian debt relief in late 2017 gave Venezuela breathing room in the face of vindictive US economic boycotts. As foreign companies retreated from links with PDVSA, Venezuela’s state oil company, Rosneft provided billions of dollars in prepayments for oil deliveries to support the economy. Consequently, Rosneft now has close links to Venezuela’s oil and gas sector. However, Iranian help has also been significant in terms of operational productive capacity, and in recent months oil production has risen again.
Nicaragua is one of Russia’s most reliable political partners in the region. A Russian satellite communications facility operates in Managua. Russia has supported an anti-drug trafficking centre. Nicaragua remains a country with relatively low violence and low gang activity compared to the other central American states ruined by US imperialism. In 2014 Nicaragua, Cuba, Venezuela and Bolivia supported Russia diplomatically after the pro-western Ukraine Government was blocked from seizing Russia’s Crimean military base. Nicaragua also defended eastern Ukraine’s rejection of the new Kiev regime. Russia has condemned foreign powers for meddling in Cuban, Venezuelan, Nicaraguan and Bolivian domestic politics. Russia and Bolivia signed a defence cooperation agreement in August 2017, which played a part in pushing US imperialism to sabotage the Bolivian election of 2019.
China and Latin America
The Chinese GDP in 2020 was $14.72 trillion. It is a significantly greater economic force than Russia. Its growth for 40 years has been based on inward Foreign Direct Investment (FDI); the stock is now officially valued at $1.92 trillion, a rapid leap from 2010 when it was $587bn. Officially US investors hold $211bn of Chinese equity and $29bn debt, but it is estimated that the real US position in Chinese firms is understated by nearly $600bn. China exports the resulting products, with an astonishing growth of 26.9% annually in real goods and services exports between 2002-2008. In 2013, China surpassed the US as the world’s biggest trading nation. Accumulation compels it to engage in bilateral and multilateral trade agreements to open new markets eg the Free Trade Agreement (FTA) between China and the ASEAN nations came into effect on January 2010, the world’s third largest free trade area in terms of nominal GDP. The US’s shift under President Obama to a Pacific strategy recognised this competition over resources and markets. In Latin America China has FTAs with Chile, Costa Rica and Peru, with others under negotiation.
China’s positive balance of payments, unlike the US, has created huge foreign currency reserves. These reserves are now exported. In 2020, the stock of its outward FDI reached $153.71bn, first in the world that year. It has lent about $1.5 trillion in direct loans and trade credits to more than 150 countries around the globe. Alarmed by this activity, in November 2021, British Foreign Secretary Liz Truss billed the rebranded Commonwealth Development Corporation (now British International Investment) as part of a ‘network of liberty’, to leverage private British capital to invest in countries across Asia, Africa and the Caribbean.
Trade between China and Latin America and the Caribbean soared from $17bn in 2002 to nearly $306bn in 2018. China primarily purchases raw materials and agricultural products because it is no longer self-sustaining in agricultural output. Imports from Africa, Australia, the Middle East and South America have increased strongly in the last decade to represent a combined share of around 50%. Two production systems, cattle (for beef and leather) and soy (for grain, oil, and cake), are associated with the majority of deforestation in Brazil and greenhouse gas emissions from agricultural expansion. As the largest importers of soy and beef worldwide, the EU and China play a critical role in provoking deforestation.
In 2008, the Chinese government issued its first policy paper on Latin America and the Caribbean, with the goal of establishing a comprehensive and cooperative partnership featuring equality, mutual benefit and common development. In 2014, the partnership was established. China adheres to the Five Principles of Peaceful Coexistence established in Bandung in 1955. It continues to support the ‘Future Bridge’ Training Program for One Thousand Chinese and Latin American Youth Leaders and the Latin American Youth Cadres Training Program. Greater cooperation between women’s organisations and promoting gender equality and women’s empowerment is sought. In Argentina, China has installed a space observatory base in Neuquen, as well as securing priority in projects such as the Vaca Muerta gas field. Nicaragua has dropped its recognition of Taiwan as an independent state. China is accelerating its agreements at every level, military, police, and judicial. China and Cuba, under the Belt and Road Initiative, will work on infrastructure, technology, culture, education, tourism, energy, communications and biotechnology, in line with Cuba’s development plans. China seeks nickel and oil from Cuba.
By the end of 2021, China had provided 2bn doses of Covid-19 vaccines to more than 120 countries and international organisations. The majority of all vaccines administered in Latin America came from China. This reiterates Beijing’s current policy of mutual benefit on the basis of equality toward countries in Latin America, in the sharpest contrast to the brutal history of US predation.
FIGHT RACISM! FIGHT IMPERIALISM! 286 February/March 2022
