President
Chavez of Venezuela and Prime Minister Putin of Russia:
What's
behind Russia's big push in Latin America?
Vedomosti, Russia
Is Latin America
Worth Russia's Time and Money?
"Perhaps
it would make sense to pause and answer the question: why are we going back to
Latin America? If it's only to walk along the U.S. border with head held high,
is it worth the billion-dollar price?"
Presidents Medvedev of Russia and Chavez of Venezuela: What's behind Russia's diplomatic offensive in Latin America? According to the editorial board of Vedomosti, it's more pride than profit.
Russia intends to regain lost influence in South America, and if that doesn't suit someone, "I couldn't give a damn," said President Dmitry
Medvedev at a press conference during a visit to Argentina.
For Russian leaders, is seems
that no continent is closer than Latin America. This was the destination of one
of Medvedev's first foreign tours as president. He visited Cuba, Venezuela,
Peru and Brazil. Now the Russian leader has traveled to Argentina and Brazil.
Venezuela was visited repeatedly by Vladimir Putin (both in his previous and
current positions). The "energetic" Deputy Prime Minister Igor Sechin
traveled to South America seven (!) times in 2008 alone [Sechin oversees
Russia's oil sector]. In 2009, he toured Cuba, Nicaragua, and of course, he
went to Venezuela, which he now visits more frequently than in Eastern Siberia,
where Russia's huge oil reserves lie beneath the ground - like dead weight. Even the Patriarch Cyril,
the metropitan bishop, found time to fly to Cuba and Venezuela,
where he held intimate conversations with Fidel Castro and Hugo Chavez, handing
both the Order of the Russian Orthodox Church.
What are Russian leaders looking
for on such a distant continent? Russia's current share of trade with South
America is less than 1 percent, and its level of investment is even less. But Venezuela
(from which Russia received $12.5 million worth of goods in 2007), Ecuador
(trade amounts to $760 million per year - less than 0.1 percent of Russian
trade) and Nicaragua, where we sell only $18 million of goods and services a
year, have all been declared our “strategic partners.” Ninety percent of our
trade with Argentina, though valued at $1.36 billion, consists of imported
Argentine food.
Russia's interests are first
and foremost political. In Soviet times, Latin America was one of the main arenas
of the Cold War with the United States. After the collapse of socialism, our
relations with this region virtually disappeared. Meanwhile, in recent years, left-wing
forces in many Latin American countries rose to power through constitutional
means as U.S. influence has waned. Capitalizing on this, Russia would like to
dominate the local market for military equipment and at the same time
strengthen its influence under the guise of creating a "multi-polar world"
as a counterweight to the U.S. And in the direction there has already been some
progress.
According to London's
International Institute for Strategic Studies, Russia exported $5.4 billion of
weapons to the region last year, beating out the Americans. However, we sell
weapons mostly on credit. There is progress on the BRIC front (Brazil, Russia,
India and China). Brazil took the baton from Russia, hosting a second summit of
BRIC.
Posted
by WORLDMEETS.US
Economic cooperation is more
dubious. Thanks to Sechin's efforts over recent years, Russian oil and gas
companies have headed to Latin America. Skeptics say that this wasn't entirely
voluntary. In Venezuela, Bolivia and Colombia, the political risks are so high
(for example, there are periodic waves of business nationalizations) that the
world's leading companies have left. Nevertheless, we have 46 joint projects in
Venezuela alone, involving oil, gas, gold and aluminum. The majority of them
belong to Rosneft, Lukoil and Gazprom, who, among other things, are discussing
the construction of a large Latin American pipeline costing $20 billion (for
comparison, "Nord
Stream" will cost $7.4 billion). The region has huge reserves of
easily accessible hydrocarbons, so some Russian interest is understandable.
Eastern Siberia may be closer, but the conditions of production there are much more
difficult.
However, none of these
projects are very far along. Perhaps it would make sense to pause and answer
the question: why are we going back to Latin America? If it's only to walk along
the U.S. border with head held high, is it worth the billion-dollar price? Is
this a strategy or some kind of tactical game?
