This is the first in a two-part series about President Barack Obama and Latin America.
With the inauguration recently behind him, President Barack Obama has a myriad of issues that warrant his immediate attention. He faces an inordinate amount of pressure to fulfill expectations that, while unsurprising, are probably unfair. However, one matter that should not go unnoticed is United States-Latin America relations, which soured during the Bush presidency.
Obama has the opportunity to reaffirm the United States' hemispheric leadership role and re-engage our neighbors to tackle common political, economic and social challenges. By partnering with Latin American countries as the key allies they naturally are instead of sidestepping them, Obama will strengthen our own national security. He need not look far across our borders to protect many of our regional interests, such as expanding energy and environmental security, combating narcotrafficking, and promoting a multilateral image of the United States via trade and diplomacy. This op-ed will focus on achieving some of these goals by changing policy toward Brazil and Venezuela, while the next installment will highlight ways to attain these objectives through a new course of action on Cuba, commerce and the war on drugs.
Brazil has long been a regional power, but it is now gaining traction in the global arena. A top-ten world economy, Brazil is one of the world's leading agro-exporters and has demonstrated its burgeoning influence as a major player in the G-20 Summit this past November as well as in the Doha Round negotiations of the World Trade Organization.
Brazil possesses massive quantities of energy reserves. There are oil fields off of its coast as well as inland, and, along with the United States, Brazil produces 75 percent of the world's ethanol. Brazil's ethanol is sugar-based, in contrast to the corn-based ethanol that the United States produces, yet the former is cheaper, requires less energy to produce, and doesn't raise food prices. Brazil — not the United States — has a comparative advantage in ethanol production, but the United States has imposed an import tariff on Brazilian ethanol while subsidizing domestic ethanol production.
The two countries signed a Memorandum of Understanding on biofuel production in 2007, but Obama should bolster these ties by reducing or eliminating the import tariff, allowing Brazilian ethanol unfettered access to the U.S. market. This is not currently a top priority, but after a March 14 meeting with Brazilian president Luiz Inácio Lula da Silva (known as Lula), the first Latin American leader to meet with Obama at the White House, the latter said that in time he may move to lift the tariff. It is imperative to the future of United States-Brazil relations.
Lula is in the unique position of being a friend to both the United States and Venezuela, led by the regional standard-bearer for anti-American vitriol: the brash and bombastic Hugo Chavez. Chavez, who became Venezuela's president via democratic means in 1998, no longer governs Venezuela as a democrat, and has blamed the United States for imperial ambitions that threaten the sovereignty of Latin American countries. He has sought to act as a counterweight to the perceived U.S. hegemony and has attempted to spread his influence throughout the region. An important part of Obama's security strategy in the Western Hemisphere must be to contain Chavez's sway over his neighbors. Forging a more robust and deep-rooted relationship with Brazil is an effective way of achieving this.
Obama must not announce any attempt to isolate Venezuela, for that will only encourage Chavez to use such talk as a rallying cry against the United States. If Obama reaches out to Brazil more, thereby allowing Brazil to broaden its world standing and expand its regional leadership role, then Venezuela's influence in Brasilia will naturally, albeit slowly, wane. This one simple gesture by Obama will not unequivocally rid Brazil of Chavez's presence — indeed, it is naïve to think otherwise — but it dovetails with the strategy of isolating Chavez by ignoring him.
By ignoring Chavez, his fate is then left to the Venezuelan people, who see him either as a reviled despot or a revered democrat. Although his referendum to end term limits — allowing him to run again for president in 2012 and beyond — was handily passed on Feb. 15, only 14 months after the same referendum narrowly failed, there are factors working against Chavez's political longevity. Venezuela has the highest inflation rate in Latin America and is facing massive food shortages. There is rampant urban crime, and Venezuelans are feeling the negative effects of dwindling state coffers. The price of oil, currently about $40 per barrel, is not even half of where Venezuela needs it to be in order to gain profits from its oil-based economy, and Chavez has scared off foreign investors by nationalizing major industries — oil included.
His gifts of subsidized oil and financial assistance to his friends, along with alliances and arms deals with countries like Iran, Syria and Russia, are no longer as tenable as they used to be, given the low price of oil and subsequent lack of profits with which to fund such handouts. Chavez uses these arrangements to justify his hollow accusations of U.S. interference in Venezuelan affairs and to distract his countrymen from domestic woes.
So what can Obama do to counter Chavez without directly antagonizing him? Obama must commit to his pledge to decrease our dependence on foreign oil. Although Chavez scoffs at U.S. policy in the region, the reality is that the United States is Venezuela's top trading partner, as Venezuela exports two-thirds of its oil to the United States.
Obama clearly wishes to wean the United States off of foreign oil, but since that is a long-term goal and the United States will still need oil for a while, a healthier partnership with Brazil could lead to the United States buying more petroleum from Brazil, not Venezuela, thereby denying Chavez his largest market. This relationship with Brazil would naturally give way to future energy cooperation regarding alternative fuels.
Venezuelan oil is highly crude and sulfurous, and primarily only the United States and China fully refine it, given their technology and manpower. China, however, is not as desirable a market as the United States because of less-profitable returns and less demand for oil. Therefore, Chavez could not simply turn to China to send the oil he would otherwise send to the United States. Even when the price of oil increases again, with the United States no longer a loyal customer, the Venezuelan economy would be dealt a colossal blow. Reducing dependence on foreign oil is not an easy task and will undoubtedly take a long time, but Chavez could be in power for years to come.
To maintain his long-term authority, Chavez has corruptly filled the National Assembly and Supreme Court with steadfast supporters. However, history has shown that in Venezuela, presidents who cannot keep the nation happy with oil profits are run out of office. Obama's proposed energy plans could eventually help doom this autocrat, despite his popularity and stranglehold on power.
Chavez enlarges his voting bloc by exploiting the frustrations of people living in the region that has the most unequal distribution of wealth in the world. U.S. policies aimed at fixing these inequities by strengthening its relations with its neighbors, rather than unilaterally promoting United States-led formulas, would go a long way in reducing Chavez's influence. The United States would become a more humble partner in Latin America while still increasing its own security.
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Aaron Schumacher is a senior majoring in International Relations.
