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WikiLeaks: U.S. and Brazil Vie for Power in Peru

In their correspondence with the State Department, U.S. diplomats in South America have been exceptionally paranoid about the activities of Hugo Chávez and the possibility of a leftist regional alignment centered upon Venezuela.  That, at least, is the unmistakable impression that one is left with by reading U.S. cables recently disclosed by whistle-blowing outfit WikiLeaks, and it's a topic about which I have written widely in recent months.  Yet, with President Hugo Chávez's health now fading fast and Venezuela looking like a rather spent force politically, it would seem natural that Washington will eventually turn its sights upon other rising powers --- countries like Brazil, for instance.

 

Judging from WikiLeaks cables, the U.S. doesn't have much to fear from this South American juggernaut in an ideological sense, and indeed leftist diplomats within Brazil's Ministry of Foreign Affairs are regarded as outmoded and anachronistic relics of the past.  Nevertheless, Brazil is a rising player in the region and U.S. diplomats are keenly aware of this fact.  For the time being, Brazil and the United States maintain a cordial, if not exactly stellar diplomatic relationship.  As Venezuela fades and Washington struggles to maintain its crumbling hegemony in the wider region, however, Brazil and the U.S. will inevitably develop rivalries.

 

This geopolitical competition has fallen somewhat under the radar, but a close reading of WikiLeaks cables lays bare Washington's secret agenda.  As far back as 2005 American ambassador to Lima Curtis Struble wrote that the U.S. was enmeshed in an "undeclared contest" with Brazil for political influence in Peru.  "We are winning on most issues that count," Struble added, remarking that negotiations over a U.S.-Peru free trade deal had remained positive.   However, the ambassador noted ominously, "the government of Brazil is still very much in the game" and had met with some success in pushing for the so-called South American Community of Nations or UNASUR which would diminish U.S. influence.

 

Run-Up to 2006 Election

 

Further cables indicate that the Brazilian administration of Luiz Inácio "Lula" da Silva pursued narrow-minded self interest in order to advance Machiavellian geopolitical and economic goals.  In the run-up to the Peruvian presidential election in 2006, Brazilian foreign policy advisor Marco Aurelio García visited Peru where he met with members of the Alejandro Toledo administration.  During his discussions, García sought to spearhead moves to establish the South American Community of Nations in the face of internal difficulties. 

 

Chief amongst those "difficulties" was none other than Hugo Chávez, a regional rival.  In order for the South American Community of Nations to progress, its two constituent parts, namely trading blocs Mercosur and Andean Community, would have to be "stabilized."  According to García, however, the Andean Community was in "crisis" due to Chávez's "antics."  Speaking to the Peruvians, García recommended that the Toledo government simply "ignore his [Chávez's] diatribes" [privately, the Brazilian added, Lula had helped to "rein in" the Venezuelan leader]. 

Meanwhile, García opposed Chávez's so-called Bank of the South, an institution designed to counter large financial entities like the International Monetary Fund and World Bank.  According to a WikiLeaks cable, the Peruvians agreed that Bank of the South would not be suitable for the new South American Community of Nations.  Like García, Toledo officials saw the more conservative Andean Development Fund as a more appropriate mechanism to enhance regional integration.

 

Handling Humala

 

García also met with nationalist presidential candidate Ollanta Humala, a kind of Chávez protégé.  During the campaign, the Venezuelan leader had provocatively backed Humala while attacking the candidate's chief opponents.  At campaign events, Humala had taken a leaf from his political mentor by sporting red T-shirts, calling himself "comandante" and boasting of plans to assert greater state control over energy resources.   

 

None too pleased by Humala's tilt toward Venezuela, García reportedly told the candidate that Brazil disapproved of Chávez's actions which promoted "intranquility" in the region.  Moreover, the diplomat remarked that he did not agree with Chávez's notion of countries belonging to different "axes" of powers.  García added that he was very concerned about social, political and economic tensions in the Andean region and Brazil was intent on playing a larger stabilizing role.

 

The meeting took place at Humala's own house and the candidate's wife, Nadine Heredia, took great pains to graciously entertain the Brazilians [perhaps Heredia wanted to reassure her guests in light of her own reported links to Venezuela].  Humala meanwhile "was very polite, upright and not at all a firebrand."  The candidate added that he wanted Peru to peacefully co-exist with both the U.S. and Brazil. 

 

A More Assertive Brazil

 

In the event, Humala must have surely regretted his political associations with Chávez.  During the campaign, the Peruvian was widely criticized for his ties to Venezuela, and the connection may have even cost him the election.  The man who edged out Humala, former president Alan García, had a previous incarnation as a fiery nationalist.  However, García was extremely critical of Chávez during the campaign and as he succeeded to the presidency the veteran politician went out of his way to court Brazil.

 

According to WikiLeaks cables, Brazil viewed the election as a necessary corrective which would help to restore "regional equilibrium" and to curb Chávez's increased geopolitical profile.  In the wake of the contest, Lula met personally with García in Brasilia in what insiders termed a "love-fest."  Though both leaders had political origins on the left, García and Lula had long since jettisoned such ideals in pursuit of their respective careers. 

 

Perhaps, Lula sensed that Chávez's star had waned and that it was now time for Brazil to press its own strategic advantage.  The Brazilian president stressed the need for greater physical integration between Peru and Brazil, including the dreaded Inter-Oceanic Highway which stood to exacerbate deforestation in the Amazon (for more on this, see my book No Rain in the Amazon: How South America's Climate Change Affects the Entire Planet).  The project, which is being carried out by Brazilian construction giant Odebrecht, will ship Brazilian exports to China via Peruvian ports.

 

Lula also spoke of the need for a regional, military, and political alliance between Peru and Brazil.  Lest García get the wrong idea about Brazilian intentions, Lula stressed that his country did not seek regional "hegemony" but merely wanted to transform South America into "a global actor on a par with China and India."  Responding to Lula, García candidly admitted that he preferred Brazilian regional hegemony to that of the United States.  Peru, the new president added, would surely be interested in forming joint ventures with Brazil and benefiting from Brazilian technological know-how.         

 

Judging from other cables, García sought to extend cooperation in yet other areas.  In 2009, U.S. diplomats reported that Lima was interested in purchasing a dozen Super Tucano combat support aircraft manufactured by Brazilian aerospace giant Embraer.  Details of the deal were discussed during a Lula visit to Lima, "with a large commercial delegation in tow."  The Peruvians may have been prompted to turn to Brazil out of pure frustration with the United States.  According to leaked documents, the García government was dissatisfied with the "slow and complicated U.S. defense procurement process and high price tags for U.S. equipment." 

 

Humala Act II

 

Perhaps recognizing that Chávez's star was on the wane, Humala saw fit to remake himself politically by cultivating greater ties to Brazil.  Reporting on Peru's recent presidential election, the New York Times remarked, "in a transformation this year that points to the eclipse of Venezuela by Brazil, Mr. Humala has swapped the red shirts for dark suits, explicitly rejected talk of seizing private companies and celebrated Brazil's market-oriented economic model, while distancing himself from Venezuela's president, Hugo Chávez."  In addition, Humala even hired campaign advisers tied to Lula's Workers' Party and paid a whopping four visits to Brazil.      

 

Then, Humala went out of his way to praise Brazilian companies invested in Peru's mines, steel industry and hydroelectric projects, adding that the new boondoggle Interoceanic Highway connecting western Brazil to Peru's Pacific coast was a landmark achievement.   Toning down the rhetoric, Humala started to refer to himself simply as Ollanta instead of "comandante."  Perhaps, the more moderate image helped Humala, who edged out conservative challenger Keiko Fujimori.  As soon as he was elected president, Humala flew to Brazil and met with Lula protégé Dilma Rousseff.  It was Humala's first official trip abroad in his new office and sent a clear sign of Peru's geopolitical priorities moving forward. 

 

Vying for Power in Peru

 

Though Humala continues to forge a partnership with the United States, Brazil could overtake Washington in the Andes.  To be sure, Peru has an important free trade agreement with the U.S. and both countries collaborate on combating drug trafficking.  However, Humala sees Peru as a crucial Pacific gateway and strategic link between the two mammoth economies of Brazil and China.  For years, Brazil and Peru ignored each other diplomatically but now trade has mushroomed into the billions of dollars. 

 

A voracious energy consumer, Brazil is keen on building hydroelectric projects in Peru which would allow the South American juggernaut to stop importing diesel fuel and produce electrical power instead.  A proposed 600 mile natural gas pipeline meanwhile is due to connect Peru's Camisea field with a petrochemical plant proposed by Odebrecht.  Additional firms are operating port concessions and even steel operations.  The owner of Brazilian company Gerdau, which acquired Peru's largest steel plant, is a friend to both Lula and Rousseff.  What is more, an additional Brazilian operation has purchased Peru's largest metal refinery, Cajarmarquilla, which produces indium, a material used to manufacture flat-screen televisions and computer monitors. 

 

In time, might Peruvian nationalists turn against Brazil?  The more Brazil inserts its tentacles into the Andean region, the greater the risk that the South American giant will ruffle feathers and local sensibilities.  Already, one hydro-electric project has led to major opposition and some fear that Humala might favor the Brazilians excessively as 80 percent of the operation's 2,000 megawatt output would be allocated to its giant South American neighbor. 

 

Moreover, Brazil hardly has a sterling record when it comes to hydro-electric power (for more on this, recall the controversy swirling around Hollywood director James Cameron), and one proposed Peruvian dam on the Inambari River would flood 158 square miles of rain forest, displacing some 7,000 people in the process.  Old foreign policy hand Marco Aurelio García, who now serves as Rousseff's top foreign policy adviser, and who had earlier warned Humala about cozying up too much to Chávez, has declared that the project is "very important" for Brazil.  Humala meanwhile says that locals' needs will be respected when it comes to deciding whether to move ahead with the project.  That is, for the time being.

 

Christ Statue of Lima

 

Overlooking the Pacific cliffs of Lima hangs a potent symbol of Brazil's rise on the world stage: a towering statue of Jesus which at first glance looks remarkably similar to Rio de Janeiro's Christ the Redeemer, a famous icon lying on the Atlantic side of the continent.  The statue, which rises 118 feet into the air, was sculpted in Brazil at a cost of $1 million and the cost was footed almost entirely by Brazilian construction conglomerate Odebrecht. 

 

The "Christ of the Pacific" statue was erected even before Humala came into power by outgoing president Alan García, and there was no public consultation surrounding its construction.  For Lima Mayor Susana Villarán, the donated Christ statute is a tasteless eyesore, while Humala has diplomatically remarked that the structure "would improve the Lima panorama."  Odebrecht told the Associated Press defensively that it funded the statue because it "contributes to the diffusion of artistic expression" wherever it does business and because the statue could promote tourism for the poor who live in the vicinity.

 

In a tweet, Peruvian playwright César de María exclaimed, "I have nightmares in which I see that Peru's president is Odebrecht and all we do every five years is elect its representative."  Speaking to Caretas magazine, outgoing Brazilian ambassador to Peru Jorge Taunay remarked "there is not the least risk of Peru becoming a satellite.  It's not in Brazil's nature."  Others, including Guillermo Vásquez, a retired professor at Peru's Center for Advanced National Studies, is alarmed by Brazil's presence but is resigned to his country's fate.  "Brazil is coming," he told the Associated Press.  "What are we going to do about it?"

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WikiLeaks and the Peruvian Presidential Election

Despite soaring rhetoric about the need for an equal partnership in U.S.-Latin American relations, the Obama White House is still intent on halting the leftist contagion spreading throughout the wider region. Over the past few years, a more radical bloc of countries including Cuba, Venezuela, Bolivia and Ecuador have emerged to contest U.S. hegemony. In response, Washington has cultivated the support of wavering Brazil and Chile as well as the more rightist Colombia. Yet another country that hangs in the political balance, Peru, holds the first round of its presidential election on Sunday and the U.S. surely wants the keep the country in the ideological fold.

Under the outgoing Alan García regime, which originally took power in 2006, Washington had little to fear. A political scoundrel and opportunist, the formerly leftist García morphed into a great supporter of U.S. corporatism and free trade. Peru’s raw resources were thrown up to the highest bidder and the country witnessed polarizing social and environmental conflict. In 2009, for instance, the police killed at least 25 civilians in the Amazonian town of Bagua when several thousand indigenous peoples protested the president’s free trade policies and land law allowing for corporate access to communal territories.

Judging from cables recently released by the whistle-blowing outfit WikiLeaks, the U.S. may fear that Amazonian Indians are becoming radicalized by the likes of Hugo Chávez. In one memo, U.S. embassy staff in Lima remarked that “While a series of government miscalculations and missteps was largely to blame [for the violence in Bagua] radical and possibly foreign interference also played a role.”

Read further in the cable, and U.S. priorities become clear. “We have built a strong bilateral relationship with Peru in recent years, partly embodied in the Peru Trade Promotion Agreement (PTPA),” wrote one diplomat. “We also share a similar strategic vision, namely that the region's foremost security threats originate from transnational and non-state criminal actors such as narco-traffickers and terrorists, as well as resurgent populism and the meddling of Venezuelan President Hugo Chávez and his allies.”

While one might expect such combative commentary from the likes of diplomats in the Bush era, bear in mind that this particular cable was sent in the first year of the Obama administration, thus refuting the notion that Washington had somehow turned a new leaf in its hemispheric attitudes. Indeed, diplomats noted with approval how García had “played a constructive role in the region and sees challenges and opportunities through a similar policy prism.”

The Americans could not have been happier about Peru’s willingness to play a key geopolitical role. “Under Garcia,” diplomats declared, “Peru has helped to counter Bolivia and Venezuela's efforts to blame the U.S. for rising regional tensions. Relations with Bolivia have also been strained over alleged Bolivian political meddling, and personal insults between Presidents Garcia and Morales. The government of Peru remains concerned that Venezuela is trying to sow instability in the region through its covert support of radical and indigenous groups in Peru and elsewhere.”

Sunday’s Election

Now that the García era is coming to an end, Washington may fear that Peru might waver in its political allegiances. Yet, judging from the lackluster roster of candidates, the Obama administration doesn’t have much to fear. Take, for example, Alejandro Toledo, who preceded García as president from 2001 to 2005. An academic free market economist who had a stint working at the World Bank, Toledo has been a long-time darling of international capital. Under his “neo-liberal” presidency, Peru negotiated a free trade agreement with the United States which gave American corporations expanded access to the Andean nation’s raw resources.

The other three conservative candidates offer little substantive difference to Toledo. Former Lima mayor Luis Castañeda, who has met with the Americans behind closed doors to discuss politics [see below] is one contender. Then there’s Pedro Pablo Kucyzynski, a former World Bank official and lobbyist for mining and oil companies who served as prime minister under Toledo.

Lastly, in a bizarre blast from the past we get Keiko Fujimori, daughter of former president Alberto Fujimori. At 35 she is the youngest candidate in the field and is running on experience --- that is to say, the experience of her father. Keiko says that if is she is elected president she will seek to secure Alberto’s release from prison. Currently, disgraced Fujimori Sr. is serving a 25-year sentence for embezzlement and directing death squads.

Keiko’s political story is probably the most surreal of all the candidates. In 1994, Alberto named Keiko first lady after fighting with his wife Susana Higuchi. When the details of the acrimonious divorce were publicized, including inflammatory accusations that Alberto had even tortured Higuchi, Keiko sided with her Dad. Perhaps justifiably, many Peruvians view Keiko’s relentless pursuit of politics at all costs as shameless and crass.

Countering the Humala Threat

Most likely, any of these questionable candidates would suit the United States. There is one contender, however, who may have raised some eyebrows within the Obama White House. Ollanta Humala has said he would rewrite Peru’s constitution and retool the economy in favor of the poor who have been left out of the recent economic boom promoted by Alan García. A nationalist and former lieutenant colonel, Humala led a failed revolt against Fujimori’s electoral fraud in 2000 and even kidnapped a general [he later received a congressional pardon]. Humala would renegotiate contracts with foreign oil and mining companies and, according to the Financial Times, investors are nervous about the emerging candidate. Indeed, Peru’s markets have taken a hit as the brash Humala rises in the polls.

It’s not the first time that Humala has stoked concern amongst the Peruvian elite. In the 2006 presidential election, Humala ran against García on a nationalist platform. After meeting with Chávez and Morales, Humala declared himself part of “a Latin America with new leaders, in which the perception is that the neo-liberal economic model is exhausted.” In an incendiary move, Humala pledged to nationalize Peru's hydrocarbons industry and declared his strong opposition to the free trade agreement which his country had signed with Washington.

WikiLeaks cables reveal the Bush administration’s concern over Humala and diplomatic currying of favor with up and coming conservative luminaries. In the midst of the 2006 election cycle, U.S. ambassador Curt Struble met with Lima mayor [and current presidential contender] Luis Castañeda. Struble characterized Castañeda as “a driven man…who certainly aspires for the top office.” Speaking privately with the ambassador, Castañeda told Struble that he expected to be “the rallying point for the opposition if Humala wins the Presidency.”

On another occasion, Castañeda elaborated at greater length with the Americans about the Humala threat. A shrewd player who was apparently willing to play dirty, Castañeda believed that a useful tactic “would be to create confusion regarding the four Humalas currently involved in politics: Ollanta…his imprisoned brother Antauro (charged with responsibility for the death of five people in the January 2005 Andahuaylas uprising) and his father Isaac (most
recently talking favorably about the possibility of war with Chile).” Apparently, the Americans saw Castañeda as a useful asset: the Lima mayor’s “views on the basis for Humala’s popularity,” remarked ambassador Struble, “and on the ways to undermine it [my italics] are worth paying attention to.”

Fear of Venezuelan Contagion

Judging from the cables, the 2006 election in Peru had taken on wider geopolitical implications. In Venezuela, Chávez was already taking notice of events on the ground and came out strongly for Humala. For his part, García countered that Morales and Chávez were spoiled children and “historical losers” for criticizing Peru’s free-trade agreement with the United States. Chávez shot back that García, whose previous presidency had been marred by hyperinflation, food shortages and guerrilla violence, was a “thief” and a “crook.” “I hope that Ollanta Humala becomes president of Peru,” Chávez declared. “To Ollanta Humala, go comrade! Long live Ollanta Humala! Long live Peru!” the Venezuelan leader added.

Chávez’s comments prompted Peru to recall its ambassador from Venezuela in protest. The Venezuelan leader, Peruvian authorities charged, was persistently and flagrantly intervening in their country’s internal affairs. García, who had languished behind Humala by more than ten points in opinion polls, exploited the diplomatic spat by accusing Chávez of political interference. When García painted his opponent as a puppet of Chávez and Morales, Humala was unable to launch an articulate counteroffensive.

When the votes were finally counted, García edged out Humala, 53% to 47%. The vote, García remarked, was a blow to Chávez. “Today, the majority of the country has delivered a message in favor of national independence, of national sovereignty,” García said. “They have defeated the efforts by Mr. Hugo Chávez to integrate us into his militaristic and backwards expansion project he intends to impose over South America. Today, Peru has said no,” García added proudly. U.S. Deputy Secretary of State Robert Zoellick was also pleased with the result, proclaiming that “the best response is that of the Peruvian people (who) decided to vote for President Garcia and not for [Hugo] Chávez's candidate.”

Humala Round Two

Despite the rhetorical triumphalism, however, WikiLeaks cables reveal that the Americans continued to monitor Chávez’s influence in Peru. In 2007, for example, Struble declared that Venezuelan agents might have been involved in stoking unrest in the largely indigenous department of Puno. In light of Washington’s previous concern, it is not a stretch to imagine that the Obama administration may be slightly concerned about a Humala upset on Sunday.

Yet, peer a little deeper and it would seem that the U.S. has little to fear. Indeed, the Humala of 2011 bears little resemblance to the military man’s previous political incarnation. The brash candidate no longer sports red campaign shirts, instead opting for grey suits and dark blue ties. What is more, Humala speaks warmly of free markets, has pledged to support investors’ rights and cites World Bank reports when making his points. In addition, even if he did win the presidency, it’s doubtful that Humala would have enough support in Congress to inaugurate momentous change.

Moreover, any lingering threat of Venezuelan contagion can probably discounted as Humala has done his utmost to distance himself from the more radical crowd including Chávez, Morales and Rafael Correa of Ecuador. Determined to avoid the red baiting pitfall, Humala has bent over backward to prove that he is a responsible statesman. When Chávez described Humala as a “good soldier,” one of Humala’s own congressional candidates even threatened to launch a lawsuit against the Venezuelan president. Humala chimed in for good measure, telling Chávez to butt out of Peruvian affairs. “The Venezuelan model is not applicable in Peru,” commented a tamer Humala.

Humala is the only leftist candidate in the field, but he lacks something to be desired. In a disappointing development, the Peruvian has turned to strategists linked to former Brazilian president Luiz Inácio “Lula” da Silva, a political centrist. There may be other reasons to believe that Humala is not an ideal standard bearer for the left: for years, he has been dogged by allegations of human rights abuses. The charges, none of which have ever been formally proven, stem from Humala’s stint as a commander in a remote army post during Peru’s civil war. In a wry but macabre aside, novelist Mario Vargas Llosa has remarked that choosing between candidates like Keiko and Humala is like opting between cancer and AIDS.

Not to worry, though, as some observers are predicting that even though Humala may very well pass through the first round that he has little chance of ultimately prevailing. Though the former army man is surging in the polls, surveys suggest that Humala would not fare well in a second presidential runoff to be held on June 5th. That is certainly an electoral outcome that would satisfy Washington, since Keiko, Toledo and Kuczynski are all tied for second and none of them pose an ideological challenge to the U.S. (Castañeda is trailing but not fully out of the running yet).

The Leftist Quandary

Given the great likelihood that Peru’s next president will continue Alan García’s investor-friendly policies, we can surely anticipate more social conflict in troubled Peru. What is more, this campaign has been quite short on environmental debate centering on such vital issues as melting glaciers in the Andes [for more on this, be sure to check out my recent book]. There is some danger, too, that Peru will become something of a Brazilian satellite and subject to boondoggle development projects slashing through the Amazon rainforest. In recent years, green parties have emerged in other parts of South America and in some cases have even fared relatively well, though so far the Peruvian left has failed to launch a serious environmental candidate.

In a wider geopolitical sense, the election in Peru is likely to enhance the notion that the region’s “Pink Tide” to the left may be running out of steam. Much like the Middle East right now, South America seemed to be headed toward revolutionary ferment just a few years ago. While the unrest is likely to continue in North Africa and the vicinity, the South American left is now facing a dilemma. With Chávez and his allies looking like something of a spent force, Brazil is fast emerging as the principal power in the neighborhood. Politically crass and lacking a compelling progressive vision of the future, Brazil is mostly interested in promoting stability and its own business investments [for anyone who would doubt such an interpretation, see my detailed articles since late November 2010 on the WikiLeaks cables]. In the coming months and years, we’ll see whether the Pink Tide has any staying power or will simply cave in to U.S. pressure, corporate interests and a politically bankrupt Brazilian juggernaut.

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