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Latin America Drifts East
Evo Morales Stakes Bolivia's Future on China
By Marcelo Ballvé, New America Media
Bolivia and other Latin American governments are using new ties and
investment with China to gain greater political and economic
independence from the United States.
BUENOS AIRES, Argentina - Jan 4, 2006 - Evo Morales, a former coca
farmer and Aymara Indian, is hoping Chinese capital will help him
develop Bolivia's natural gas resources, which he has vowed to exploit
for the benefit of the country's poor indigenous majority. In one of his
first actions as Bolivia's president-elect, Morales skipped the United
States and scheduled a two-day visit to Beijing.
To Latin American analysts, Morales's choice of China as he angles for
investment is the latest evidence of a trend: The region, once firmly in
the U.S. sphere of influence, is slowly but surely drifting East.
Andrés Oppenheimer, hemispheric affairs columnist for the Miami Herald
and El Nuevo Herald, writes that 2005 will go down in history as "the
year in which the United States lost much of its once almighty influence
in Latin America, and (China) began to play a modest but rapidly growing
role in hemispheric affairs."
Charles Shapiro, U.S. Deputy Assistant Secretary of State for the Andean
Region, told a congressional committee that "China is an important new
investor in the region as it searches for resources." He said China's
imports from Latin America ($22 billion worth in 2004) are growing,
increasing 16 percent in the first half of 2005 alone.
It may be too early to say that China is threatening to supplant U.S.
influence in a region that Washington, D.C., has long treated as its own
bailiwick. But as China's star rises, Latin America is increasingly
looking to Beijing for guidance and investments.
China has become a blockbuster market for Latin America's mineral and
agricultural exports-including Chilean copper, Argentine and Brazilian
soybeans and the region's ores and gas resources. China also has
demonstrated a desire to invest in infrastructure projects that Latin
America needs to export more efficiently and reorient itself toward
Asia.
China's interest in Bolivia is motivated by the desire to secure global
natural gas resources. Morales, eager to exploit the second-largest
natural gas reserves in Latin America, would welcome investors like the
Chinese, who understand his desire for a partially nationalized energy
sector and are willing not to meddle in Bolivia's internal affairs.
The Bolivian news blog MABB, written by economist Miguel A. Buitrago,
notes that Asia's demand for natural gas will rise 220 percent by 2030,
according to the World Energy Outlook Report. "This should have a direct
impact on Bolivia," he writes, "whether Bolivians want it or not."
Buitrago continues: "The world's appetite for NG (natural gas) is
insatiable and will devour anything that remotely resembles NG ... China
alone is expected to drive that demand ... China has even been to
Bolivia offering huge amounts of investments in order to secure much
needed resources ... The challenge is whether Bolivians can take this
opportunity and use their resources to achieve development."
In fact, when reporters asked Morales how he would confront U.S.
displeasure with his policies, such as his desire to decriminalize the
coca plant, he quickly snapped back that there were other governments
willing to help him -- and immediately cited China.
In neighboring Argentina, booming soybean exports to China, nearly $2.5
billion dollars worth, helped it accumulate enough cash reserves to make
a surprise move -- in the first days of 2006 Argentina paid off its $9
billion debt to the International Monetary Fund in one lump sum. This
freed it from onerous economic prescriptions (often dictated by the
United States, the IMF's dominant shareholder).
Brazil, Latin America's largest economy, is also aggressively pursuing
the Chinese market.
"We've increased our exports to China a great deal in the last two
years," Brazil's Minister of Planning, Ivan Ramalho, told the China's
official Xinhua news agency in late 2005. Soybeans and iron still
account for half of Brazil's exports to China, but some of Brazil's
biggest industrial players -- including state-run aircraft manufacturer
Embraer -- are establishing plants in China in partnership with Chinese
entrepreneurs.
Of course not all is rosy in China-Latin American relations. The Mexican
economy, tied to low-skill manufacturing, has suffered from Chinese
competition. China take a huge share of all foreign investments, leaving
other emerging markets like Latin America without important capital.
Finally, there is the risk that by selling raw materials to a booming
China, which processes them into finished products, Latin America will
perpetuate its status as an underdeveloped, second-tier player in the
world economy.
The Ciencia Maldita economics news blog in Argentina warns: "(Argentina)
should not rest on its laurels, or rather, on its soybean shoots ... "
Selling soybeans to booming markets like India and China is fine, he
writes, but Argentina needs to use its soybean windfall to develop
high-tech, high-value sectors like software to stay competitive in the
long-run.
For now, the U.S. volume of trade and investment with Latin America, not
to mention its cultural influence, still dwarfs Chinese involvement. But
in the current political moment, China's ascendancy is offering a window
for Latin American economies to at least marginally reduce their
economic dependence on the United States, and enjoy greater political
maneuverability as a result. For Bolivia's Morales, stronger ties to
China may mean he can follow through with promises to suspend the drug
war and nationalize the economy, over U.S. objections.
Other Recent Readings of Interest
PNS Associate Editor Marcelo Ballvé writes about
Latin America and is a 2005 Inter American Press Association Scholar. |
