De 2/09 | Is the US Losing Ground or Just Sharing It?

PMBComment This article from the WSJ is in my opinion much ado about nothing. The emergence of China as a force to be reckoned with in Latin America, Africa and Asia, is a byproduct - positive in my opinion - of its wholehearted transformation from the unproductive rigidity of Communism to the 24/7 challenges of globalized capitalism. China needs access to raw materials, markets for its products and protection for its invested surpluses. That is what all western economies have fought for and obtained over centuries. One cannot expect China to help curve inflation in the US, buy large chunks of its public debt and license western technology but remain somehow shackled inside its own vast borders.

The emergence of China, of India, of the EU, and yes, Brazil, as vibrant economies is good news and the fact that it comes at the expense of US share of markets and influence should be both expected and accepted. US corporations has won and lost all over the world. The best thrive - i.e. Procter & Gamble, Mars, JPMorgan, Boeing, Walmart, and the laggards lose ground - i.e. GM, Chrysler, the airlines.

Now it is the turn of the US Government to become agile, creative and competitive to avoid becoming the GM of the global political world. A retooling of the entire foreign effort of the US government is required to adapt it to new times and formidable new challenges. New technologies, new hiring practices, new messages and greater competitive drive must replace the expensive, bureaucratic, and power for power sake approach that has come to define much of what the USG does around the world. The fact that this has to be done in times of huge budget deficits and a complex war on terror makes it tougher but not less urgent. The emerging powers are showing survival and competitive instincts and habits that have to be reckoned with and not neutered. The US will not lose its role a the moral powerhouse of the world any time soon, but it has already recognized it needs the help of others to maintain itself, and the world, prosperous and in peace.

The succinct quote from Moises Naim on Brazil deserves especial attention: "The world was hoping that it would become a responsible global player and stakeholder, but instead Brazil is behaving like an immature developing country with a chip on its shoulder". If US arrogance was many times its downfall, the schizophrenia of Brazil under President Lula will be its Achilles' heel. From the looks of things, the months to come will further diminish Brazil's clout as Lula, and his PT cohorts, further tinge Brazil's foreign stances with the colors of an internal make or break presidential and congressional campaign. PMB

WSJ DECEMBER 2, 2009

U.S. Faces Rising Resistance to Its Latin American Policy

By JOSé DE CóRDOBA and DAVID LUHNOW

The U.S., which once considered Latin America its own backyard, is having an increasingly tough time calling the shots in a region where countries like Brazil and China are vying for influence, and where even tiny Honduras stands up to the "Colossus to the North."While the U.S. remains the dominant player in Latin America, its clout is curtailed by several factors, including Brazil's rise as a regional power, the influence of a clique of anti-American nations led by oil-rich Venezuela, and the growing muscle of China, which sees Latin American resources as key to its own economic growth.

The Obama administration, though popular in much of the region, has found itself squabbling over a host of issues, from Cuba to the U.S. military's use of bases in Colombia to how best to resolve the Honduran crisis.Honduras stood firm on the ouster of President Manuel Zelaya. The U.S. and other foreign governments pressured the interim government to let Mr. Zelaya serve out his term, which ends in January. But the provisional government hung on long enough to hold Sunday's presidential election without reinstating Mr. Zelaya.

Honduras's refusal to buckle startled the U.S., which has historically cast a long shadow over the country -- the original "banana republic," where through much of the 20th century, American fruit companies exerted enormous influence on governments. In the 1980s, Honduras served as a base for U.S.-backed Contra rebels fighting the Sandinista government next door in Nicaragua.

Analysts say the Obama administration and many Latin American nations underestimated how strongly Honduras's provisional government felt about the threat posed by Mr. Zelaya, a close ally of Venezuela's Hugo Chávez.

"Everybody underestimated just how widespread the fear of Chavismo -- rightly or wrongly -- was in Honduras," says Michael Shifter, vice president for policy at Inter-American Dialogue, a think tank in Washington.

Resenting their historic dependence on the U.S., Latin American countries complain when it ignores them, but condemn what they see as American interference -- all the while looking to the U.S. for answers to Latin American problems.

Contradicting the U.S. used to be "unthinkable," said Moises Starkman, who serves as an adviser to the interim government and also advised Mr. Zelaya. But "we felt our whole system was hanging in the balance," he said.The U.S. eventually changed course, signaling it would recognize the Honduran vote as the only way to clear the impasse. In doing so, it broke with much of Latin America, including Brazil.

That split is the latest fly in the ointment in relations with the region. Washington was especially angered by Iranian President Mahmoud Ahmadinejad's visit to Brazil, part of a tour during which he also visited Venezuela and Bolivia, and won backing for his country's controversial nuclear program. Brazil has raised questions recently about the expanded U.S. use of military bases in Colombia, while Venezuela has called the move a prelude to U.S. invasion.

One reason the U.S. is having a harder time carrying out its agenda is that Latin America is deeply divided between pro-U.S. nations such as Mexico, Colombia and Peru, and a bloc of populist countries including Venezuela, Bolivia, Ecuador and Nicaragua.

Mr. Chávez also has sometimes found allies in Argentina and Brazil.

Brazil's emergence as the hemispheric powerhouse is turning into a challenge and -- in foreign-policy terms -- a disappointment for President Barack Obama, who, like George W. Bush, developed a close relationship with charismatic President Luiz Inácio Lula da Silva. "The world was hoping that it would become a responsible global player and stakeholder, but instead Brazil is behaving like an immature developing country with a chip on its shoulder," says Moisés Naím, editor of Foreign Affairs magazine.

Economic woes have also diminished U.S. influence. China is financing Brazil's state-owned oil company to the tune of $10 billion. "We don't have $10 billion to give. We have deficits, China has surpluses," says Riordan Roett, a Latin America expert at Johns Hopkins University.

The Honduran crisis showed the double standard, when Mr. Chávez complained Washington wasn't doing enough to press Honduras to restore Mr. Zelaya.Former Mexican Foreign Minister Jorge Castañeda says the crisis is a lesson for Mr. Obama in the limits of cooperation. "You can't follow the Latin Americans given how polarized the region is," says Mr. Castañeda. "You have to take a stance, and hope that the others will follow you."—Nicholas Casey contributed to this article.

Write to David Luhnow at david.luhnow@wsj.com Printed in The Wall Street Journal, page A8