Political
Developments
The Israel-Hamas
conflict reverberated in Latin America. After the Russian resolution in the
UN Security Council was vetoed, Brazil, which presided over the UNSC in
October, introduced a resolution on 18 October. If adopted, the resolution
would have condemned all violence and hostilities against civilians and all
acts of terrorism, and would have unequivocally rejected and condemned the
terrorist attacks by Hamas that took place in Israel starting on 7
October. It would have also called for the immediate and unconditional release
of all hostages, and for the protection of all medical personnel and
humanitarian personnel, as well as hospitals and medical facilities, consistent
with international humanitarian law. The resolution was accepted by 12 members
of the Council, including China, France and Ecuador, but vetoed by the US. UK
and Russia abstained. Brazil in turn, along with all important countries in
LAC, voted for the UN General Assembly resolution on 27 October titled “Protection of civilians and
upholding legal and humanitarian obligations”, calling for a truce
and humanitarian aid to Gaza. Only Paraguay voted against the resolution
presented by Jordan and co-sponsored by about 40 countries. That resolution was
passed by 120 for and 14 against, with 45 abstentions, including India,
Uruguay, Panama and Haiti.
With news
of 13 Latin American citizens killed in the Hamas raid on Israel, and the
Israeli backlash, Colombia’s President Gustavo Petro compared Israeli
statements and actions with the Nazi persecution of Jewish people during World
War II. The Israeli response was to suspend all security cooperation with
Colombia – including export of some aircraft, surveillance equipment,
etc. Petro then posted on X: “If we have to suspend foreign relations with
Israel, we will suspend them. We do not support genocides. The president of
Colombia will not be insulted…”. President Gabriel Boric of Chile
condemned Hamas’s October 7 “brutal attacks, murders and kidnappings”, while
also calling Israel out on its “indiscriminate attacks against civilians”
saying it was violating international law. Some right-wing regimes, like El
Salvador, made statements critical of Hamas.
On 31 October
Bolivia severed diplomatic ties with Israel (it had done so earlier in 2009)
because of the Israeli atrocities in the Gaza Strip. Separately Colombia and
Chile, which had condemned Israel’s actions in Gaza recalled their Ambassadors
from Tel Aviv end October.
On 15
October, Ecuador voted in 35-year old Daniel Noboa as President. Heading
the ADN Alliance, Noboa won 52 percent of the votes against his opponent Luiza
Gonzalez’s 48 percent. Gonzalez is the protégé of former President Rafael
Correa, who was re-elected twice, in 2008 and 2013, but was accused of
corruption and lives in self-exile in Europe. Correa’s left-wing policies and
his autocratic style polarized Ecuador, leaving forty percent of the Congress
in the hands of his party, but denying his supporters the presidency for the
third time. The election was notorious for the violence that preceded it. One
of the candidates for the first round, Fernando Villavicencio, well regarded
for his independent stance defiant of drug cartels which have polluted the
political economy, was assassinated in broad daylight. Ecuador is in the grip
of violent gangs which virtually run its prisons. Noboa himself is a political
novice, the son of a banana magnate who himself made five unsuccessful attempts
to become president. With less than a year and a half in power – the mid-term
resignation of the former President Guillermo Lasso (accused of corruption)
means fresh elections in 15 months – and only 15 seats in Congress, he will
have to seek political compromise in a country that is deeply polarized. The
IMF forecasts 1.4 percent growth for the oil-producing economy this year.
With wars
in Europe and West Asia threatening oil prices, the US has been working to
increase the supply of oil in the market. In order to lift the sanctions it
imposed years ago on Venezuela, it needs a fig leaf of progress on
democratic elections. This seems to have been achieved on 19 October when
Venezuelan government officials and representatives of the opposition signed an
agreement in Barbados, which lays some of the groundwork for presidential
elections that will be recognised by both sides. The government of Nicolas
Maduro, in power for the last decade, agreed to invite international observers
to monitor the election, projected for the second half of 2024. Previous
elections in 2018 were declared unfair by most of the international community.
Opposition leaders had been either imprisoned, went into exile or were
otherwise shackled by an establishment in which the judiciary and other institutions
are handmaidens of the government. Eventually a section of the opposition
compromised with the Maduro regime, which allowed the latter to claim a degree
of legitimacy. The latest deal was described by the collective west – US, UK,
Canada, EU – as a “necessary step in the continuation of an inclusive
dialogue process and the restoration of democracy in Venezuela”.
Conditions are not yet conducive for democratic elections, with the government
refusing to release all political prisoners and not explicitly agreeing to lift
the ban on certain opposition figures from contesting. This includes the
prominent opposition politician, 56-year old Ms Maria Corrina Machado, who on
22 October won a primary poll to be the candidate of a fractured opposition over
nine other candidates. The US has an interest in ending the Venezuelan impasse
and alleviating a crisis which has forced 7 million Venezuelans to migrate,
while Maduro is keen to have sanctions lifted. The outcome of the deal, in
terms of a fair election next year, the fate of Maduro if he loses, and other
vital questions await answers.
Argentina’s
presidential election first round on 22 October deflated the challenge of the
mercurial political newcomer, Javier Millei. The results showed the ruling
Peronist party candidate Sergio Massa had the highest vote at around 37
percent, with Millei in second place at around 30 percent and the conservative
coalition candidate in third place. Massa and Millei will go into the second
round in November. Millei, a Donald Trump on steroids, is a swashbuckling
figure who attracts conservatives and young alike to a brand of in-your-face
politics. His electoral platform includes abolition of the central bank;
dollarization of the Argentine economy (the peso has plummeted); pulling out of
Mercosur, a four-decade old free-market alliance with Brazil, Uruguay and Paraguay;
and relaxing gun laws, among other ideas. Much of his apparent popularity – he
got the highest votes in the primary round – is due to public apathy with the
traditional left, the Peronists who are currently in power, and the Juntos por
el Cambio coalition on the right. Neither has managed to revive the debt-ridden
economy, defend the peso, or rein in triple-digit inflation.
Several
Latin American and Caribbean leaders from over 20 countries, including Brazil,
Peru, Ecuador and Mexico’s Lopez Obrador, who seldom travels abroad,
attended the Latin American and Caribbean Conference on Drugs on 9
September, in the Colombian city of Cali, home of a notorious drug cartel till
recently. The region is home to some of the world’s most powerful drug cartels
which control the production, transportation, and distribution of cocaine,
heroin, and marijuana. Claiming that over 50 years the war on drugs had
resulted in more damage than repair, Colombia’s President Gustavo Petro
appealed for a unified front, by recognizing drug consumption as a public
health problem instead of confronting it with a “failed” militarized
approach, funded in Colombia and other countries in the region largely by the
US. According to analysts Colombia, which is also an oil exporter, saw its drug
industry generate $18.2 billion in revenues in 2022, just short of $19.1
billion in oil revenues. With the largest acreage – over 230,000 hectares –
under cultivation of the coca leaf, Colombia produced 1738 tons of cocaine with
a street value of $193 billion in 2022. The earlier US-instigated policy of
eradication of coca cultivation has failed and attempts are being made to offer
alternatives for cultivation to farmers who are lured by the temptation of high
prices for coca. Mexico on the other hand, is a notorious transit country, in
the grip of drug cartels holding some states to ransom with violence and
organised crime. It has become a hub for synthetic drugs like methamphetamines.
Mexican cartels have also bought land and based themselves in remote areas of
Colombia and Ecuador, from where they run operations. Brazil too is facing
colossal challenges as a transit country. The menace of the cartels is
spreading all over the South American continent.
Cuba hosted
the summit of the G77 plus China on 15-16 September. The meeting was
attended by several leaders, including Presidents of Brazil, Colombia,
Argentina and Venezuela. The leaders labelled Sept. 16 the annual “Day of
Science, Technology and Innovation in the South” noting with “deep concern the
existing disparities between developed and developing countries in terms of
conditions, possibilities and capacities to produce new scientific and
technological knowledge…”. G77, established by 77 countries of the global
South in 1964 “to articulate and promote their collective economic
interests and enhance their joint negotiating capacity,” now has 134
members. China, which is not a member, participates in the meetings. This time
it was represented by top Communist Party official Li Xi. The meeting ended
with an appeal for “the right to development in an increasingly exclusive,
unfair, unjust and plundering international order…” In terms of Latin
American and Caribbean integration, the event provided Cuba with a podium to
vent its frustrations and link up with leaders such as Brazil’s Lula, who
called for the removal of the US embargo in his meeting with Cuba’s President
Miguel Diaz-Canel.
Economic
Developments:
On 1
September President of Bolivia, Luis Arce announced that the country’s
gas reserves “have hit rock bottom…”. Production fell from 59 million cubic
meters per day in 2014 to 37 mcm/day, according to official sources.
Bolivia exports gas, principally to Brazil and Argentina under term contracts,
but imports petroleum products like gasoline and diesel. Estimated gas exports
amounted to almost $3 billion in 2022, but lack of upstream investment by a
government that has kept tight control over Bolivia’s natural resources – it
nationalised the gas industry in 2006 – has depleted the exploitable reserves,
according to industry analysts. The latest available figures put Bolivia’s
natural gas reserves at 8.95 trillion cubic feet. Exports reached 60 million
cubic meters per day to both Argentina and Brazil, generating revenues of over
US$35 million. Experts now estimate that Bolivia may become entirely dependent
on gas imports for domestic consumption starting in 2029.
Focus
India LAC:
Among
the leaders attending the G20 summit in Delhi in September were
the Presidents of Brazil and Argentina. Mexico’s President Lopez Obrador
was in South America that week, represented in Delhi by his Economy Minister.
The Latin Americans have seldom coordinated foreign policy. This time, however,
both Presidents – and the Mexican – are left-leaning and made common cause with
India on the agenda items dear to the Global South.
Brazil
has the greatest stake in this forum, given the size of its economy, its
multilateral profile and its prowess in international affairs. President
Alberto Fernandez of Argentina, fresh from an invigorating admission to the
BRICS forum at the South Africa summit earlier in the month, supported India’s
presidency during a press conference after the event. Lula will project
Brazil’s leadership of the Global South during Brazil’s presidency of G20 in
2024. Brazil has invited its Mercosur partners, Paraguay and Uruguay, to that
summit. Brazil was instrumental in the formulation on the section on Ukraine in
the final Declaration, according to India’s Sherpa. Argentina’s Fernandez,
speaking on the subject said “… north and south have quite
different realities”. Lula’s own pet Zero Hunger (Zero Fome)
project was reflected amply in the declaration, as was the call for more
impetus to the needs of developing countries on climate change, global trade,
multilateral financing, sustainable development goals, debt vulnerabilities,
the digital economy, etc. The Global Biofuels Alliance, launched during the
summit, includes Argentina and Brazil (a biofuels superpower), Paraguay and
Guyana.
The
political deal between the government and opposition in Venezuela could
benefit India, at least in the short term. The US has apparently agreed to lift
the sanctions, which impeded imports from that country by Indian refiners in
recent years, for 6 months, extendable if the deal is implemented in letter and
spirit. This will bring cheaper Venezuelan crudes on the market, which are
compatible with Indian refineries. In 2016, India imported 416,000 barrels per
day from that country, down to 167,000 bpd in 2020 – the last year of these
imports – because of the sanctions. Another spinoff could be the possibility of
recovery of over $ 400 million Venezuela owes to India’s ONGC (Videsh) Ltd. for
dividends on its investment in Venezuelan oilfields, pending for several years.
