New Eastern Outlook
by F. William Engdahl
In 2008 Washington created a special Pentagon command, AFRICOM, to counter the major Chinese economic initiatives in Africa to make loans and give soft credits in return for long-term trade agreements for oil and other African raw materials. Results have been poor in terms of stopping China’s search for raw materials for its growing economy. Now China has taken a new bold step to challenge the de facto imperialist American “Monroe Doctrine” by making major initiatives into Latin America. Washington’s “own backyard.”
With a fist full of dollars, Chinese state companies are making a major government-backed entrée into the traditional turf of US banking and business—Latin America. It is a diabolically clever move to hit Washington’s Achilles Heel. The intent of the original 1823 declaration by US President James Monroe was to declare that he newly-liberated colonies of European powers would be off-limits to renewed European attempts at colonization, at the threat of US intervention.
It was a bizarre doctrine, a de facto declaration that southwards of the Rio Grande River all of Latin America was some kind of US “sphere of influence” or informal colony. The nations of Latin America, especially in the post 1945 era, have fared poorly under a de facto US colonialism. US “free market” economics and the 1980’s sovereign debt crises, a debt foisted by Wall Street banks and the US Treasury in the 1980’s oil crises, had exposed the nations of Latin America to savage austerity and to theft of their most valuable national assets by US-led multinationals, banks and hedge funds like George Soros’ Quantum Fund.
As a reaction, over the past decade or more various nations, beginning with Venezuela under the late Hugo Chavez, began to distance from their dependency on the ”Yankee” of the North. The reasons were clear. At the dawn of the twenty-first century, Latin America was the most unequal society on the globe, and many blamed that state of affairs on US IMF-imposed free market neoliberalism.
Following the success of Chavez in Venezuela, quietly backed by Havana, Bolivian citizens for the first time elected an indigenous Indian as President, over vehement US attempts to block it, and Evo Morales went on to block Washington’s Free Trade Area of the Americas (FTAA), an extension of NAFTA, denouncing it, accurately, as “a neo-colonization project…a policy of economic genocide.”
Ricardo Lagos in Chile (2000); Luiz Inácio Lula da Silva in Brazil (2002) and his hand-picked successor Dilma Rousseff; Lucio Gutiérrez in Ecuador (2002); Néstor Kirchner in Argentina (2003), and Tabaré Vasquez in Uruguay (2004), all promised to roll back policies championed by either the United States or the International Monetary Fund. By 2005 some 75% of Latin America’s populations were governed by nationalists who were antagonistic to Washington’s neo-liberal policies.
Washington has made repeated, unsuccessful, attempts to make color revolutions in Venezuela, in Bolivia and other independent states. The results have been poor for Washington as her attention had been focused on China and more recently the Middle East and Russia. The Obama Administration decision to “normalize” relations with communist Cuba is an indication that is about to change radically.
Enter the Chinese Dragon
Just as Washington steps up its attempts to counter the emergence of an economically and politically self-assertive Latin America, most especially the nations of South America, China has decided to make an initiative that Washington is economically not prepared to match.
According to the official China Daily website, Chinese President Xi Jinping said on January 8 that China’s investments in Latin America will hit US$250 billion in the next 10 years and two-way trade is estimated to rise to US$500 billion during the same period.
The occasion for the eye-popping announcement was also notable. It was in Beijing before the heads of thirty three Latin American and Caribbean nations, excluding the United States and Canada. Anglo-Saxons evidently not welcome. It was the first ministerial forum of China and the Community of Latin American and Caribbean States (CELAC), which was proposed by China in 2014. Beijing doesn’t dally around when it decides to move on something. And this is something strategic. CELAC was founded in December 2011 by Hugo Chavez in Caracas, Venezuela. It includes all South American countries, some Caribbean states and Mexico.
China’s Xi, a key figure in the emerging BRICS and host to the new BRICS Infrastructure Bank told the gathering, “I believe that this meeting will achieve fruitful results, give the world a positive signal about deepening cooperation between China and Latin America and have an important and far-reaching impact on promoting South-South cooperation and prosperity for the world.”
A Five Year Plan
The countries discussed adopting a five-year plan for comprehensive cooperation during the two-day summit in Beijing. Note the wording as well of President Xi: “far-reaching impact on promoting South-South cooperation..:” South-South is not North America and not the EU. This is part of the most comprehensive global economic shift since the emergence of Europe some five centuries ago as the fulcrum of world economic power.
The two sides—China and CELAC nations—agreed on a cooperation framework, funds and projects in the fields of energy, infrastructure development, innovation and agriculture. For China it is access to the region’s valuable natural resources, including crude oil in Venezuela, copper in Chile and Peru, soybeans in Argentina and Brazil. The Latin American countries in return will get billions of dollars in Chinese investments and long-term credit lines. It’s what Beijing likes to call “win-win.”
In the side discussions, Xi also agreed to ease the pain of the current collapse in oil prices for Venezuela. In talks with Venezuelan President Nicolas Maduro China agreed on joint projects totaling more than $20 billion, while Ecuador, another oil producer and OPEC member, received a $7.5 billion loan from China to ease the financial shock.
When combined with the historic array of strategic economic agreements with China and Russia, with the emergence of the BRICS group—Brazil, Russia, India, China, South Africa—as a potential replacement for the Washington-dominated IMF and World Bank, the strengthening of the Eurasian Shanghai Cooperation Organization and since January 1, the formal establishment of the Eurasian Economic Union including Russia, Belarus, Kazakhstan and Armenia, the outlines of such a South-South new economic space to replace a collapsing dollar and euro world is becoming clearer. The year 2015 will be as the Chinese say, “interesting times.”
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”