Divide and Rule: Driving a Wedge Between Brazil and Venezuela

When you can't stamp out progressive social change, the next step is to try to desperately derail it or otherwise water it down. That's exactly the kind of strategy being pursued right now by the likes of Condoleezza Rice, who recently concluded a South American tour.

When you can't stamp out progressive
social change, the next step is to try to desperately derail
it or otherwise water it down. That's exactly the kind of strategy
being pursued right now by the likes of Condoleezza Rice, who
recently concluded a South American tour designed to ostracize
the bad countries, namely Venezuela, Bolivia, and increasingly
Argentina, and to cultivate ties with the good countries such
as Brazil and Chile.

Rice and her colleagues are
alarmed because, notwithstanding their ideological differences,
South American nations appear to be moving towards extensive
political and economic integration. The only question now is
which economic development model will predominate within the
region and what the eventual complexion of integration will look

The vehicle for closer integration
could well be Mercosur, a trading bloc of South American countries.
At present the bloc's members include Brazil, Argentina, Paraguay
and Uruguay. Venezuela is in the process of joining the bloc,
and a number of countries including Bolivia and Chile are associate
members. Mercosur nations have declared their intention of forming
a South American Community of Nations modeled after the European

The bloc is beginning to take
on political projects rather than pursuing strictly economic
objectives. For example, Mercosur now has a European Union-styled
regional parliament in Montevideo, and many Uruguayans hope their
capital might evolve into the "Brussels of South America."
In a repudiation of Washington's diktat, Mercosur nations openly
debated what the future of free trade should be in South America
during a heady 2007 summit.

In line with his usual penchant
for over the top rhetorical flourishes, Hugo Chávez of
Venezuela stressed the need for Mercosur to be "decontaminated"
from the ravages of neo-liberal economics. Mercosur, noted the
Venezuelan leader, was an "outdated mechanism and is leaking
like a sieve." The trade bloc, Chávez added, was
"founded in the context of a free- market economic model
and offers integration for the élites, for business, for
transnational companies, not integration for the peoples."
Such remarks have riled the Bush White House which has come to
distrust Mercosur, an entity which has acted to block the corporate-friendly
Free Trade Area of the Americas.

Having woken up to the fact
that its free trade and neo-liberal agenda for the region lies
in tatters, and that wielding a Big Stick to defang its enemies
cannot work politically in the present milieu, the Bush White
House is now pursuing stealthy diplomacy. Rice's strategy is
to divide and rule, to contain radical social change and to steer
it within acceptable boundaries.

These are important geopolitical
developments which have largely fallen beneath the media radar
screen. It's a deficiency I seek to rectify in my new book,
Revolution! South America and The Rise of The New Left
(just released with Palgrave-Macmillan), based on extensive interviews
with activists, intellectuals, political experts, and government
officials in six countries throughout the region.

and Brazil: Their Differing Visions for the Future

Officially, Venezuela and Brazil
are close allies and are not vying for regional political control.
But waning U.S. prestige has led to something of a power vacuum
and the two countries are now pushing very different economic
agendas. On the one hand, Brazil seeks to create economic opportunities
for itself which in turn might offer advantages for smaller South
American countries. Within President Lula's scheme, these
smaller nations would buy Brazilian goods and supply Brazil with
energy resources. With Brazil as the hub of a southern bloc
of countries, the region would head towards a more equitable
development model mitigating the savage effects of globalization.
Lula's model is market-friendly though not explicitly "neo-liberal;"
it is predicated upon government support for domestic companies
which are intent on exploiting regional and global opportunities.

Lula's agenda stands in contrast
to that of Hugo Chávez who has overseen an avowedly socialist
and strong statist approach to the economy. Rhetorically, Chávez
rails against the market and globalization, thus sparking fear
in Brazil that the Venezuelan leader will scare off investors
from flocking to the region. Chávez would like to see
a more "un-savage" version of globalization spread
forth from Venezuela into neighboring countries.

In order to advance Venezuelan
interests, Chávez provides development assistance and
oil at discount prices to sympathetic regimes in the hemisphere.
He has sought to bring Venezuela into Mercosur and hopes to
subvert the bloc from within, presumably by shifting the entity's
focus from free trade to more equitable, reciprocal trade. Simultaneously
however he has hedged his bets by promoting the Bolivarian Alternative
for the Americas (known by its Spanish acronym ALBA), a scheme
based on solidarity and barter trade outside of the usual corporate

a Wedge between Brazil and Venezuela

Rice is trying to exploit these
differences and to effectively drive a wedge through South America's
incipient left bloc. "Brazil has a president from the left.
He's one of America's closest friends and partners in the region
and on the globe. I will go on to Chile, another country where
the president is from the left and again, we have excellent relations
with Chile," the Secretary of State remarked in an interview
with Brazil's Globo TV.

Now that South America is headed
on a new trajectory which is more independent of Washington,
Rice hopes that the "responsible" left as exemplified
by Brazil's Lula and Chile's Bachelet will steer the region away
from the likes of Venezuela's Chávez and Bolivian President
Morales. "This is not about where you are on the ideological
spectrum," she said. "It's a question of: Do you respect
democratic values and democratic institutions; are you working
for the good of your people; are you working for the good of
your neighbors. Those are the issues that are important to the
United States, but it's certainly not a matter of whether you
come from the left or from the right."

Rice then urged nations such
as Venezuela to meet their United Nations obligations by keeping
terrorists out of their territories. In sounding the alarm,
Rice was merely parroting her boss who had earlier remarked that
Venezuela's response to the recent border crisis in Colombia
and Ecuador was "the latest step in a disturbing pattern
of provocative behavior by the regime in Caracas." (In
March, Chávez and Ecuador's president, Rafael Correa,
ordered troops to their Colombian borders and withdrew their
ambassadors from Bogotá after Colombia killed a top rebel
leader, Raúl Reyes, on Ecuadorean soil. During the raid,
Colombia obtained computer hard drives that U.S. officials claim
show the Venezuelan government may have had dealings with the
Revolutionary Armed Forces of Colombia, or FARC, which the U.S.
labels a terrorist group). When she was asked whether the U.S.
was considering designating Venezuela a state sponsor of terror,
Rice declared: "We will watch the situation and act accordingly."

From Bio
Fuels to Free Trade

In the fight for geopolitical
influence, energy politics looms large: that's why the issue
of bio fuels was at the top of Rice's agenda during her Brazilian
trip. In recent years, Brazil has become an energy giant by
producing ethanol, a fuel made from sugar cane, which is even
more environmentally destructive than oil in certain respects.
It's all part of Lula's bid to rival Chávez, who has
used oil for diplomatic and political advantage in the region.

In Brasilia, Rice discussed
progress on an initiative launched by Bush last year to develop
ethanol industries. At a press conference, she surprised the
audience by seemingly becoming a born again environmentalist.
Putting bio fuels on the map, she remarked, was "a way
to deal with the terrible problems that we face in energy supply
and climate change."

Brazil would like to become
a more important political player on the world stage, and Rice
was careful to bring up the issue of United Nations Security
Council reform. The South American giant has long hoped to obtain
a permanent seat, and the Secretary of State offered the carrot
of possible U.S. backing for the move.

In Chile, Rice sought to revive
a long-standing, but largely dormant, strategic partnership between
Chile and the U.S. state of California. State Department officials
argue that both have complimentary economies; spokesman Sean
McCormack said that a centerpiece of Rice's visit was a proposed
educational exchange program. For Rice it was important to visit
Chile, a country with which the United States has a free trade
agreement: the Bush White House hopes the accord will serve as
a model for other free trade initiatives in the region, including
a pending deal with Colombia.

Argentina by Refusing To Set Foot in the Country

What is truly startling to
consider is that Rice altogether skipped Argentina during her
tour. That's a monumental diplomatic snub of a major country
within the region. What's it all about?

Relations between the United
States and Argentina have been plummeting ever since Bush's first
term. Argentina still blames the American-controlled International
Monetary Fund for its financial collapse in late 2001 (Argentina
was forced to default on billions of dollars in debt to the IMF).

In 2003 incoming President
Néstor Kirchner played on anti-American sentiment as a
means of consolidating leftist constituencies, while simultaneously
becoming a key Chávez ally. When I was in Buenos Aires
researching my book, I was truly amazed at the extent of the
growing Venezuelan-Argentine alliance. The two nations now barter
and trade everything from cattle, to oil, to agricultural products
and ships.

In 2005, things got worse when,
right in front of Bush, Kirchner criticized the neo-liberal policies
of the 1990s that the United States sponsored. Kirchner delivered
his riposte at a meeting of Latin American leaders in Mar del
Plata. The Argentine president did little to stop anti-American
protests, leading Bush to leave the summit feeling totally humiliated.
In an effort to avoid further embarrassment, Bush avoided Argentina
altogether during his South America tour last year, preferring
instead to pay his respects to Brazil and Uruguay.

The White House hoped that
things might turn around with last year's election of Cristina
Fernández de Kirchner, the former president's wife. But
then relations took a further nose dive when American prosecutors
in Miami named four Venezuelans and one Uruguayan in connection
with a plot to cover up $800,000 found in a suitcase at a Buenos
Aires airport allegedly meant as a secret campaign contribution
from Venezuela's government to Kirchner. The new Argentine president
lashed out at the U.S., calling the investigation "garbage
operations." Kirchner argued that the investigation was
politically motivated and designed to drive a wedge between Argentina
and Venezuela.

In retaliation, Kirchner restricted
the diplomatic access of the American ambassador in Argentina,
Anthony Wayne. Rubbing Bush's face in the mud yet further, Kirchner
has cultivated even greater ties to Chávez: the Argentine
leader has continued to sell more consumer products to Venezuela
as well as some $4 billion in Argentine bonds to help refinance
the country's debt. What's more, energy-strapped Argentina will
be the proud recipient of more than 10 million barrels of Venezuelan
fuel oil and diesel per year.

What's behind Argentina's geopolitical
maneuvers and what do the Kirchners want from Venezuela? Argentina
seems to be playing a rather Byzantine game in an effort to offset
Brazil's big footprint in the Southern Cone. The Brazilians
have always seen Mercosur and the Southern Cone as their backyard
which offends Argentina's sense of national pride. When Néstor
Kirchner and now Cristina further ties to Venezuela, it's a way
of poking the eye of their northern neighbor.

To an extent, the growing rapprochement
is also based on shared ideological affinity. Indeed, Néstor
Kirchner once stressed that Mercosur needed to transcend its
mere emphasis on economic growth. "We are not interested
only in economic integration," he remarked. "We are
not interested in a region of the world where integration is
full of poverty, exclusion and unemployment."

to Brazilian Senate: "You're Parrots"

For Chávez, the advantages
of Argentine friendship are eminently clear. By securing important
support from his ally to the south, Chávez makes it easier
for Venezuela to join Mercosur and hopefully overcome Brazilian
skittishness. That support has become more and more critical
as Venezuela's bid to join Mercosur has been held up and stalled.
Though Argentina and Uruguay have ratified Venezuela's bid,
Paraguay and Brazil have still not agreed.

In Brazil, the biggest thorn
in Chávez's side has been the Senate, which was outraged
by Venezuela's refusal to renew Radio Caracas Televisión's
broadcast license; the station was a hotbed of opposition sentiment.
Characteristically, Chávez flew off the handle and accused
the Brazilian Senate of being subservient to the United States.
In a move which hardly ingratiated himself amongst the Brazilian
elite, Chávez said that the Senators were "puppets
of the (U.S.) empire" and "oligarchs" more interested
"in their pockets than the people." Memorably, the
Venezuelan leader said that the Senate was a "parrot that
just mimics Washington." Meanwhile, a Venezuelan negotiator
remarked that the United States did not want "the strong
bloc of the present Mercosur plus Venezuela leading the way to
South American unity."

Chávez's outburst led
the leader of the Brazilian Social Democracy Party in the Senate,
Arthur Virgílio, to declare that his colleagues would
try to prevent Venezuela's entry into Mercosur. Both the Social
Democracy Party and the Democrat Party declared that Venezuela
could not be admitted to Mercosur because it was "a country
that cannot respect disagreement in a civil fashion." President
Lula himself told Venezuela to mind its own business. In anger,
Chávez issued an ultimatum, saying that Venezuela would
withdraw its application to join Mercosur unless its bid was
approved within three months. "We won't wait any longer
than that. The Brazilian and Paraguayan Congresses have no reason
not to approve our entry: no political, legal, economic or moral
reasons," Chávez said. Incensed, Brazilian government
officials retorted that they would not accept deadlines from

of Further Integration Unclear

Despite such incendiary tit-for-tats,
some experts believe that integration will eventually occur,
even though it may take 30 or 40 years to complete the process.
While in São Paulo researching my book I caught up with
Valter Pomar, Secretary of International Relations with Brazil's
Workers' Party. Regional integration, he said, would have a
significant geopolitical impact because it "would take place
within the context of a rising left movement. That is important,
because the European Union was pushed for and created under conservative

Perhaps, but what will be the
precise contours of economic and political integration? For
the time being, the future is still plenty murky. Even if Venezuela
becomes a member of Mercosur, the trade bloc faces daunting economic
and political pressures which are far too complicated and arcane
to even enumerate here. With Mercosur, and implicitly the South
American Community of Nations future in some doubt, Chávez
has turned his attention elsewhere.

By far the most enlightened
and socially progressive initiative guiding South American integration
today, Venezuela's ALBA is designed to serve as a counterweight
to free trade blocs. In particular, growing integration between
Venezuela, Cuba, and Bolivia has led to important developments
in health care which have benefited millions. On the other hand,
ALBA has had little effect on the overall volume of trade between
member nations. It's difficult to see how particular South American
nations, for example Brazil or Chile, would ever accept ALBA
as a viable economic model. Meanwhile, Chávez's plans
to transform ALBA into some kind of a military alliance have
foundered and gone nowhere as I have previously explained (see
"`We Will Respond Jointly,' Hugo Chávez's Anti-Imperialist
Army," February 16/17, 2008).

Such lack of political clarity
has given the White House a slight opening. Though the Bush
administration is reviled throughout the region and Washington
cannot hope to turn back the rising pink tide of progressive
regimes, Rice believes she can mitigate Venezuelan influence
by cutting bilateral energy and trade deals with individual South
American countries. As long as Brazil and Venezuela play out
their big power rivalry, smaller countries may choose to either
wait on the sidelines or secure advantages from either Lula or
Chávez based on their particular needs at any given time.

Despite his constant rhetorical
outbursts directed at the likes of parrots within the Brazilian
Senate, Chávez has expressed regret at the lack of overall
diplomatic progress. If they are ever to achieve meaningful
integration, the big powers of Venezuela, Argentina, and Brazil
must find a way to resolve their differences. Up to now, all
three have been engaged in a precarious geopolitical dance, an
irony not lost on Chávez himself. Recently the Venezuelan
leader remarked, "Neither Venezuela alone, nor Brazil alone,
nor Argentina alone can become a world power. We can only achieve
that together."

Nikolas Kozloff is the author ofHugo
Chávez: Oil, Politics, and the Challenge to the U.S.

(Palgrave Macmillan, 2006), andRevolution!
South America and the Rise of the New Left
(Palgrave Macmillan,
April 2008).