Varieties of imperial decline : Obama and Wall Street v ALBA
by toni solo
Global
economic disruption makes it seem events are overtaking analysis faster
than people can keep up. In May it was reported that China is now
Brazil's main trading partner, displacing the US after more than 75
years. Ever since the debacle at the Mar del Plata summit in 2005 of
President Bush's continent-wide free trade plan, the US has been unable
to defend its formerly dominant trade position in Latin America.
For
years before the current Western Bloc economic contraction, countries
across Latin America have been broadening their trade relations.
Between 2000 and 2006 trade between Asia and Latin America doubled from
US62bn to over US$130bn. China has been the most important new partner,
but countries like India, South Korea, Taiwan, Singapore, Vietnam and
Iran have become significant partners too. With the US and the European
Union in recession, Latin American economies have more reason than ever
to diversify their trade.
At the Arab-South America summit in
Doha late in March this year, Celso Amorim, the Brazilian foreign
minister said, "One of the factors that made the [economic] crisis less
serious in Brazil is that we have very diversified trade. With the Arab
world it [trade] went from eight billion to 20 billion dollars in three
or four years." (1) That trend is part of a global development in
South-South commercial activity, which Unctad reported in 2008 grew in
volume between 1995 and 2006 from $577bn to more than $2 trillion,
accounting for 17% of global trade. (2)
So when observers talk
about the start of a new phase in US-Latin America relations, one needs
to be clear it is not something initiated by the US government.
President Obama, Hilary Clinton and their colleagues are reacting to
events over which they have little control. US government efforts to
get their way in Venezuela, in Bolivia, in Ecuador and even in Central
America have been consistently frustrated. But if one looks for
significant policy change in response to that failure, there is none
worth mentioning.
Policy continuity
Support continues for
right wing allies in the region, Mexico, Colombia and Peru, as do
covert activities to subvert and weaken governments in Cuba, Venezuela,
Bolivia, Ecuador, Nicaragua and perhaps to a lesser extent, Argentina,
Paraguay and Uruguay. Acute observers may toil over the details of
official US government announcements or in mainstream corporate media
and wring out analytical dribbles of passing interest. But the
underlying components of Western Bloc foreign policy hardly change at
all from one decade to the next.
On the night of last year's
presidential elections, veteran State Department diplomat Robert
Callahan, the US ambassador to Nicaragua was asked by Nicaraguan media
what change Obama might bring to US policy in Latin America. Callahan
replied that he thought there would be no change. He said US policy in
Latin America has been the same for many decades and is unlikely to
change under President Obama. Callahan, loyal sidekick of John
Negroponte - the archetypal supremely competent, suave US imperialist
mass-murder-CEO nonpareil - is worth taking seriously.
Likewise
after the Trinidad and Tobago Summit of the Americas, Larry Summers,
Obama's senior financial adviser was quoted in a Bloomberg report on
April 19th on the issue of Cuba : "An end to the embargo is 'way down
the road' Larry Summers, Obama's senior economic adviser said
today on NBC's 'Meet the Press' program." Modalities may change,
underlying strategies and tactics remain the same.
Global military-finance connection
This
is worth considering in the wider global context. Since the Second
World War, Western Bloc imperialism has operated under US leadership.
The deal between the US and its Nato country and Pacific allies has
always been that they will work together to defend their interests as a
bloc. Economic dominance of former colonies - the majority world - in
Africa, Asia and Latin America took priority. Latterly, more than ever
the deal has been that the US acts as military point man while its
allies collude in manipulating international finance and trade so as to
maintain the neocolonial status quo.
Apparent rivalry between
the US dollar and the Euro is mostly financial theatre. The peoples of
European nations are never going to permit the levels of military
spending necessary to defend their countries' global corporate
dominance. US government military spending both meets its side of the
geostrategic bargain with its European and Pacific allies and performs
vital global financial and economic functions.
It boosts
public spending. It gives vast subsidies to corporate investment in
technological and scientific research. Via the hundreds of foreign US
military bases, multi-billion dollar foreign military aid and foreign
wars, it flushes dollars into foreign markets worldwide. The financial
effects of that unregulated global dollar liquidity complement those of
more than US$1.5 trillion flowing through foreign tax-paradises each
year, mainly in territories controlled by the United States and Britain.
By
the late 1980s, rich countries' traditional manufacturing-based
economies no longer provided levels of growth necessary to
satisfy the insane logic of corporate consumer capitalism. Wriggling
out of that systemic failure, Western Bloc elites rejigged their
economies as financial casino-markets pushing financial insurance
techniques, accounting standards and ratings procedures to their
very limits and beyond. That process drove the de facto devaluation of
the dollar and other leading currencies as rich country governments
struggled to defend the dollar as the international reserve currency
despite massive US budget and trade deficits and burgeoning debt.
Wall Street's strategic role
Gargantuan
US government military spending may well make sense in that context.
The hundreds of US military bases worldwide, the billions of dollars in
foreign military "aid", the relentless aggressive wars - they all
make sense as components of a global dollar-recycling engine. Likewise,
the perversely inefficient monopolistic concentration of US corporate
finance makes sense as a tool of the US plutocracy's geopolitical
strategy. From that point of view, other similarly puzzling aspects of
the financial collapse seem less perplexing.
For example, why
were the big five Wall Street investment banks allowed to waive normal
limits on what they were allowed to borrow, from 12 times their capital
to up to 40 times? Those five investment houses - Goldman Sachs, Bear
Stearns, Morgan Stanley, Lehman Brothers and Merrill Lynch - worked in
practice as quasi-non-governmental outfits, colluding intimately with
the main Western Bloc Central Banks - the Federal Reserve, the Swiss
Central Bank, the Bank of England, the Bank of Japan and the European
Central Bank.
It is a safe bet this international cartel did
their level best to rig international currency and commodity markets so
as to prop up the US dollar, making it easier for the US to run its
huge deficits. The surviving broker dealers - Morgan Stanley and
Goldman Sachs -have now become bank holding companies. Bear Stearns was
swallowed by J.P.Morgan, Bank of America bought Merrill Lynch. Wells
Fargo bought up the somewhat smaller Wachovia. Lehman's was let go
bust.
The quasi-non-governmental status of the main Wall
Street banks also explains why none have been put into receivership.
They are all probably insolvent. But breaking them up would dismantle a
strategically vital apparatus for coordinating Western Bloc
intervention in currency and commodity markets. It is not that these
companies are "too big to fail" as such. The US plutocrat elite, and
their European and Pacific allies, keep these outfits afloat bcause
they are important moneyness engines for global geopolitical financial
intervention and dollar recycling. Many other perplexing aspects of the
current economic crisis seem to make sense in similar terms.
Implications for policy
All
this then explains why President Obama is extremely unlikely to
initiate significant changes in US foreign policy. Some policies may
change, but only in response to facts created beyond the reach of the
Western Bloc dominated status quo. President Obama and Hilary Clinton,
on Latin America, will continue to befriend narco-terror gangster
President Alvaro Uribe in Colombia and anti-democratic crooks like
Felipe Calderón in Mexico and Alan Garcia in Perú.
Similarly,
they will continue to undermine Hugo Chavez, Evo Morales, Rafael
Correa, Raul Castro, Daniel Ortega and any other regional leader - El
Salvador's Mauricio Funes perhaps or perhaps leaders of small Caribbean
island nations - who may act decisively to build alternative economic
and trade arrangements. One example of such alternative economic and
trade arrangements is the Bolivarian Alternative for the Americas,
ALBA. ALBA - a trading bloc based on solidarity and complementary trade
that includes barter - is probably currently the most important
alternative economic model to consumer capitalism.
One
indication that it may well be is that the Western Bloc corporate media
never write about it. While only a few countries are full members of
ALBA (3), almost every country in Central America and the Caribbean are
members are members of ALBA's subsidiary regional energy and food
security programme, Petrocaribe. ALBA's importance can be seen from the
sequel to the US government's use of the Andean Trade Preference and
Drug Eradication Agreement to punish Bolivia for expelling former
Ambassador to La Paz Philip Goldberg.
The US authorities
withdrew Bolivia's access to the ATPDEA just days after Goldberg's
expulsion in September 2008. Under the ATPDEA, thousands of
export items from Bolivia and other Andean countries entered the US
with zero import tariffs. Without the advantages of the ATPDEA, those
products from Bolivia are now subject to import duties of between 17%
and 33%. Bolivia's exports to the US under the APTDEA in 2007, mostly
clothing, textiles, leather goods (34%) and hydrocarbon derivatives
(66%), totalled about US$150m. (4)
Without the benefits of the
ATPDEA those exports may now drop dramatically, even without the
additional effects of the US recession. However, in October 2008, the
Venezuelan government negotiated a trade arrangement with Bolivia
guaranteeing to buy over US$46m of the goods Bolivia previously
exported to the US. That deal is already underway with US$9m worth of
the goods covered by the agreement already delivered to Venezuela.
Over
the year, that means Venezuela will take up almost all but around US$4m
of the clothing, textiles and leather goods previously exported to the
US. Bolivia's exports to the Mercosur trade area increased by 60% in
2008, mostly sales of gas. With the Morales administration negotiating
new markets also in Russia, Japan, Iran China and India, the US may
well find that its efforts to bully Bolivia end up backfiring. Bolivia
may well establish dynamic new markets while the US will be left with
even less influence in the Andean region than before.
It seems
absolutely clear that the Obama administration brings hardly any change
to long-standing plutocrat elite "bipartisan" policy in general.
Certainly in Latin America, policy change is most likely to be forced
upon the US government by events beyond its control. While Obama and
Clinton will take heart from the new right-wing regime in Panama, they
may well find the new government in El Salvador under Mauricio Funes
more than cancels out that respite. All the signs are that any
occasional good news for the US government in Latin America in months
to come is likely to highlight even more the deep failure of its longer
term efforts to maintain influence and prestige in the region.
Notes
1.http://english.aljazeera.net/news/middleeast/2009/03/2009331131144938569.html
2.http://www.bilaterals.org/article.php3?id_article=12508
3.Bolivia,
Cuba, Dominica, Honduras, Nicaragua, St Vincent and the Grenadines,
Venezuela. Ecuador and Uruguay have observer status.
4.http://www.constituyentesoberana.org/3/noticias/economia/102008/011008_1.html