I am in Panama for the second time in seven years, and it certainly is a very different place today. Skyscrapers are sprouting up all over the city and there has been explosive growth here. Constant sunshine, no earthquakes, fabulous location, peaceful Costa Rica to the north and a natural buffer of the Darien region to the south make Panama a stable and peaceful democracy. Americans are not perceived as an alien presence but a welcome partner. To be an American in Panama, especially an American who speaks Spanish, is to feel very, very welcome.
The Embassy estimates as many as 45,000 American citizens down here while the Panamanian government estimates as many as 250,000. One of the reasons for the discrepancy in estimates is that many Panamanians, for legacy reasons, possess U.S. passports and dual citizenship. In short, the U.S. legacy in Panama is obvious. At one point the U.S. had 35 military bases here to protect the canal from Japanese attacks in World War II, but today there are no U.S. bases in Panama. Many of the former U.S. bases have become urban renewal projects similar to the Presidio in San Francisco, and the new U.S. Embassy is built in one of these old sites.
Though this past year Panama's growth rate was 8.5 percent, services account for over three-quarters of the economy and English is a big need here. There is a shortage of skilled workers, and English is not as strong as it might be, or as strong as many locals think (although many call centers have been built here). The weakness of English in Panama is the legacy of dictator Omar Torrijos, who deemphasized English, going so far as to ban the teaching of English in public schools and stopping an entire generation from learning the language. Anecdotes tell of English teachers at public schools who have a hard time conducting visa interviews with the U.S. embassy in English.
For years, the Panamanians have been stalling building the last piece of the Pan-American Highway through the Darién region, and the U.S. has supported them for a number of reasons -- preventing the northward spread of foot and mouth disease, environmental worries, and perhaps other security concerns relating to narcotrafficking.
When I was last here, there were discussions about building an extension of the Panama Canal. The expansion is well underway, and ideally the expanded canal will be up and running in 2014 though more likely this will happen in 2015. You may have heard of the "Panamax" class of boats, but the expansion was needed for the "New Panamax" class of ships. At its narrowest portion, the canal can only run one way at a time right now for the largest ships, but after 2015 it will be able to run both ways at all points. The U.S. administered the canal as a public utility until 1999 and therefore hardly made any money. Today, the Panamanians run the canal like a business and it generates around $1 billion annually in profits for the Panamanian Treasury. This figure will increase considerably after the expansion.
In October, Congress finally approved the Panama Trade Promotion Agreement. It took way too many years under the current administration to sign this agreement. Though it is more a signaling effect, the upshot of this is the elimination of tariffs that were making it difficult for American goods to compete in Panama.
As far as security for U.S. interests in the region, there is little concern here over Hugo Chavez's influence except perhaps rumors of mischief with labor unions, and there are likewise no murmured concerns about Chinese influence. Nor do there seem to be any agricultural, mineral, or fuel resources that attract the attentions of China. In fact, Panama has kept official relations with Taiwan over China. I also asked about the ownership of Pacific and Atlantic ports through Hong Kong's Hutchison Port Holdings. It was met with a series of shrugs from U.S. officials and old Panama hands.
The FARC has used Panama's Darién region as a base of "rest and relaxation" but the current center-right government has taken a notably harder line than in the past. The FARC is almost exclusively interested in drug trafficking here, unlike in Colombia, where the group poses a threat to the state. According to U.S. officials, Panama yearly seizes about 40 tons of drugs in partnership with the U.S. There are also gang problems here but nowhere near the level of trouble that other Central American countries have been having over the last decade or so. Perhaps the biggest challenge to Panama's future is the weakness of its institutions and the persistent whispers of endemic corruption in the society. If Panama can confront this challenge, it will be on its ways to being as wealthy as the United States.
Two hours by plane to Mexico City, 40 minutes to San José (Costa Rica), less than an hour to Bogotá, and 4.5 hours to Washington. Panama, with a population of 3.4 million, is truly the hub of the region and a great American ally.
U.S. policy in Latin America under President Obama has been mostly defined by a decline in U.S. influence and a languorous response to anti-democratic actions by a passel of populist regimes. Now we know the reason why: It's those obstructionist Senate Republicans.
That's the clear implication of an article last week in the Wall Street Journal, "U.S. Sway Clipped in Latin America," in which Senate Republicans are left largely holding the shears.
According to the Journal, "Republican lawmakers have been blocking many of the Obama administration's Latin American nominations for three years," and that, "The Republican strategy has left many in the U.S. government perplexed about how to engage the vast territory."
Both assertions are patent nonsense.
While it is true that the nominations of a new Assistant Secretary of State for Western Hemisphere Affairs and one ambassadorship are being held up and that another ambassador was blocked from returning to post after a recess appointment (a third nominee was redirected to Panama after both a Democrat and Republican objected to his initial posting to Nicaragua), that is hardly indicative of a three-year campaign.
In fact, prior to these current holds, the only Obama nominee held up by Senate Republicans has been career official Tom Shannon, who is now Ambassador to Brazil. (Senate Democrats blocked not one, but two of George W. Bush's nominees for Assistant Secretary for the Western Hemisphere.)
Secondly, the notion that Senate Republicans are hindering a more robust U.S. policy in the hemisphere mixes up cause and effect. One senior official told the Journal, "Obviously, embassies continue to work on important issues without an ambassador. But not having an ambassador muffles our voice. There are things that need to be spoken about. The bully pulpit just isn't as effective without an ambassador."
But it is precisely because the administration has failed to use ambassadorial bully pulpits in the face of the ongoing assault on democratic institutions in the region that has partly fueled Senate Republicans' current frustrations.
A particularly risible assertion is that a lack of an ambassador in Ecuador -- the last one was unceremoniously expelled by President Rafael Correa -- is hurting U.S. interests, because "Some point to progress being that was being made in bringing Ecuador's left-wing President Rafael Correa toward more moderate governing, particularly toward the business community, despite efforts by Mssrs. Ortega and Chávez to sway him further to their side."
Progress? In Ecuador? The only progress being made in Ecuador is in President Correa's systematic dismantling of separation of powers and rule of law and his unremitting war against the media, which the Washington Post recently called, "the most comprehensive and ruthless assault on free media underway in the Western Hemisphere."
Rather than being criticized, Senate Republicans -- primarily Senator Marco Rubio (R-FL) -- should be applauded for trying to pressure the administration into injecting some purpose and energy into its hemispheric policy. Rather than attempting to placate angry leftists in Venezuela, Ecuador, Bolivia, Nicaragua, and Argentina, the administration needs to be more vocal in its support for democrats throughout the region who feel abandoned by the lackluster response from Washington.
The administration has had three years to develop and implement a regional policy that serves U.S. interests and those of our responsible neighbors. Rather than being obstructionist, all Senate Republicans are trying to do is help bring that about.
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"Our homeland is bleeding painfully," is how Honduran Cardinal Oscar Andres Rodriguez put it recently at a religious event whose audience included Honduran President Porfirio Lobo.
Indeed, Honduras is spiraling into an ungovernable and unstable situation due to the increased operations of international drug syndicates and their local gang proxies within its territory.
Last October, the U.N. Office on Drugs and Crime reported that Honduras, a nation of 7.6 million, now has the highest homicide rate in the world.
Honduras is a victim of what counter-narcotics experts refer to as the "balloon effect," where heavy pressures on traffickers in Colombia and Mexico have forced them to relocate to less dangerous environments such as Honduras, where they are flooding the country with hundreds of millions of dollars in drug profits, bribing legislators, judges and police officials, and further debilitating already weak institutions.
What can the U.S. do about this situation? Well, the first thing that's important is emphasizing what we should not do -- and that is cut off all police and military aid, as a recent tendentious op-ed in the New York Times argued. The piece went on to make the preposterous claim that the Obama administration is responsible for the drug carnage in Honduras because it supported elections to end the 2009 presidential crisis that saw the ouster of proto-authoritarian Manuel Zelaya.
While it is true that the Honduras crisis does have its origins in the U.S., it's not quite the way the op-ed's author imagines. It is the U.S. insatiable demand for illicit narcotics that fuels the crisis there and throughout Central America. (U.S. officials estimate that fully 95 percent of the illegal drugs that go from South America to the United States pass through Central America.)
As such, we have an obligation to the Honduran people to help mitigate the violent fallout. But we also have to recognize the U.S.'s present fiscal situation and that major new assistance initiatives are unlikely to be contemplated. But there are important things we can do now within present budgets.
Because the narcos have so thoroughly penetrated the police forces, the military has had to be called in to try and stabilize the situation. We need to work with the Honduran government to allow the DEA to train and vet special law enforcement units as they have done in other countries. Without wholesale reform of front-line units, no progress in the drug war will be possible. Similarly, increased support for witness, judge and prosecutor protection programs to eradicate impunity is essential.
Second, the U.S. needs to implement an extradition treaty with Honduras as quickly as possible. Extradition to the U.S. is what kingpins fear the most, because they know they cannot buy their way out. It has proved extremely valuable in Colombia's war against the cartels and needs to be replicated here.
Yet, these immediate steps and any subsequent measures cannot succeed absent local leadership, which is something the U.S. cannot provide. Regrettably, President Lobo's tenure has not been marked by strong leadership on this front. In short, he is no President Uribe of Colombia.
Honduras needs a leader who is willing to take on the drug cartels and those corrupted by them and move his country -- principally the political and economic elites -- to make the necessary sacrifices to reclaim their country's sovereignty from the drug lords and gangs. President Uribe challenged the wealthy to radically increase Colombia's security resources and they responded, because they saw him as a leader who could be trusted.
Of course, reducing U.S. demand for illegal drugs would begin to solve the problem, but that is not going to happen in the short-term, and the house is on fire today. Decriminalization is a pipe dream. Neither is walking away from the problem a serious option. Honduras's war on drugs is ours too, and it's time that both sides begin treating it as such.
[Full disclosure: In July 2009, I helped to advise a Honduran business delegation that came to Washington during their presidential crisis to defend Manuel Zelaya's removal from power.]
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Sadly, the tragic death of another Cuban dissident hunger striker will not change conditions in that island-prison nor provoke governments to reassess their historical indulgence of the Castro regime's crimes. Business as usual will continue.
In fact, this week, Brazilian President Dilma Rousseff is in Cuba promoting business opportunities for Brazilian companies. She plans no meetings with Cuban dissidents.
But the Jan19 death of 31-year-old dissident Wilman Villar Mendoza will not be in vain. Indeed, when decent people arrive in Cuba to pick through the rubble left by the most oppressive regime this hemisphere has ever seen, his sacrifice -- and that of thousands of Cuban martyrs before him -- will be rightly honored on Cuban soil.
But if there is one immediate purpose that the tragic death of Wilman Villar can serve, it is to put the definitive lie to the currently fashionable meme that Cuba, under Raúl Castro, "is changing."
For example, according to the Associated Press, Cuba just wrapped up a "dramatic year of economic change." The BBC informs us, "Cuba expands free-market reforms," while Reuters adds, "Cuba to free 2,900 in sweeping amnesty."
Frankly, the only thing sweeping Cuba these days -- besides the ongoing state repression -- is the hyperbole in foreign correspondents' dispatches.
I have dealt with Cuba's smoke-and-mirrors reforms in this space before, but to briefly summarize, all interested observers need to know about Cuban "reforms" are two things:
They signify no new recognition of the inalienable rights of the Cuban people by the regime. "Allowing" a few new bits of heavily circumscribed individual economic freedoms is hardly indicative of fundamental change. The relationship between state and citizen remains the same -- although instead of controlling 100 percent of the economy, the regime will now control 99.5 percent.
Secondly, recent changes are not meant to reform the system but to save the system. Allowing Cubans to repair children's dolls outside the purview of the state does not mean Cuba is on the road to a free market; it means the regime is looking for new ways to generate revenue through confiscatory taxes of limited private economic activity.
Raul Castro himself serves as the best spokesman that the regime is not contemplating any kind of fundamental reform. Speaking recently at a party conference, he said, "There has been no shortage of criticism and exhortations by those who have confused their intimate desires with reality, deluding themselves that this conference would consecrate the beginning of the dismantling of the political and social system the revolution has fought for more than half a century."
To be sure, the hyperbole surrounding recent changes in Cuba has an ulterior motive. It is meant to apply pressure on U.S. policymakers to make unilateral changes in U.S. policy, because Cuba is ostensibly "reforming." Thankfully, the Obama administration so far hasn't taken the bait. In fact, last September, the President took the matter head-on, saying, "They [the Castro regime] certainly have not been aggressive enough when it comes to liberating political prisoners and giving people the opportunity to speak their minds."
Indeed, at a time when no quarter is being given to undemocratic regimes in the Middle East and North Africa, the suggestion that the U.S. should lessen pressure on an undemocratic regime ninety miles from our shores strikes a wholly discordant note and is unlikely to be entertained by any serious policymaker. The Cuban people deserve no less than what the peoples of those regions deserve: the freedom to live their lives as they see fit. Clearly, that concept was as alien to Muammar al-Qaddafi as it is to the Castro brothers -- which is why they deserve the same fate.
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You have to hand it to Ecuadorean President Rafael Correa. He has a plan and he is working it relentlessly. Unfortunately, for those concerned about democracy in the hemisphere, his plan calls for the gutting of democratic institutions in Ecuador and concentrating all power in his person.
It may be that the Ecuadorean populist doesn't generate the international headlines like his amigo in Venezuela, Hugo Chávez, but that doesn't make him any less of a threat to democracy in the region.
Recently, Correa has generated some attention in the U.S. for the campaign of intimidation he is waging against one of the country's most respected newspapers, El Universo. Editorials in the Washington Post, New York Times and Los Angeles Times have harshly criticized his efforts to drag the newspaper owners and a columnist into court and winning a $40 million judgment in a trumped-up defamation proceeding.
According to the Post, what is occurring in Ecuador is, "the most comprehensive and ruthless assault on free media underway in the Western Hemisphere."
The problem is that abuse of the media is only one troublesome aspect of Correa's populist project. Undermining rule of law is another. This week, for example, a new Ecuadorean Supreme Court will be seated, the product of referendum Correa rammed through last year, giving his latest power grab a patina of legitimacy.
Evidently not satisfied with the provisions on selecting judges in his own rewritten constitution of 2008, Correa changed the rules again. The standing Supreme Court was abolished and through a new, convoluted selection process -- controlled by the Executive -- Correa got what he wanted: 13 of the new 21 judges are now in his pocket.
But with control of the judiciary and his party's present control of the National Assembly, Correa is still not satisfied. He has set as his next priority ensuring that his party remains in control of the legislature by rewriting electoral laws to unduly favor incumbents (including himself) in the run-up to 2013 elections.
For example, a law he is currently pushing would prohibit the news media from "either directly or indirectly promoting any given candidate, proposal, options, electoral preferences or political thesis, through articles, specials or any other form of message." As to how anyone could run a campaign under such a law is mind-boggling -- which is obviously the way Correa wants it.
Correa's defenders point to his current popularity in Ecuador to somehow justify his policies, but that is hardly a measure of the health of any democracy. Demagogues have never had much problem recording high popularity numbers by playing to mass resentments and envy. The true measure of the health of any democracy is the respect and protection afforded the rights of the minority. And, in Ecuador, those protections are increasingly non-existent.
Drinking from the populist cup will someday soon cause a massive hangover for Correa's mass of supporters. But there is plenty the U.S. and other defenders of democracy in the region can do and say to stand up to Correa's steady suffocation of democratic processes and hollowing out of democratic institutions.
Unfortunately, the administration response to date has been only to silently and feebly nominate a new U.S. ambassador to Ecuador following Correa's intemperate expulsion of respected career diplomat Heather Hodges in April 2011. (The nomination of the new ambassador has been held up, however, by Senator Marco Rubio [R-FL] out of frustration with the administration's languorous policies towards the steady erosion of democracy in the region.)
The least the administration could do is speak out against Correa's trampling of the Inter-American Democratic Charter and provide public support to those Ecuadoreans standing up for their rights. If the administration aims to pursue a new ambassador to Quito, then it needs to select someone more experienced in difficult environments who is not afraid to publicly stand up for the principles and values enshrined in the Charter.
As the New York Times noted, "Latin America has a bitter history of authoritarian rule. It has struggled hard to get beyond those days. All of the hemisphere's democratic leaders, including President Obama, need to push back against Mr. Correa." Indeed, Ecuadorean democrats cannot do it alone.
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On his current tour of Latin American outliers, Iranian leader Mahmoud Ahmadinejad stopped in Venezuela this week to share a belly-laugh with his compañero Hugo Chávez over the supposed nuclear threat either of their countries poses to the civilized world.
Gesticulating outside the presidential palace, Chávez said, "That hill will open up and a big atomic bomb will come out," with Ahmadinejad adding that any bomb they would build together would be fueled by "love."
A couple of real cut-ups.
While their mockery should fall flat amongst most sober observers, the fact remains that much of Washington is still unable to grasp the nature and dimensions of the Iranian threat in Latin America.
For example, elsewhere on this site, Michael Shifter, a perceptive analyst of Latin American politics, fails to contemplate the worst of Iran's intentions and argues instead that Iran hasn't managed to meet many of its economic pledges in the region, and has equally failed in making inroads with the biggest power players of the region, such as Brazil.
That, indeed, may be true, but neither is relevant to Iran's covert agenda of evading international sanctions and developing contingencies if the cold war with the United States was to suddenly turn hot.
Indeed, for the past twelve months or so, skeptics have proven more diligent in attempting to debunk reports of Iranian-Venezuelan collusion than following where the (prodigious) trail leads. The hoary "no smoking gun" is continually trotted out to summarily end any discussion.
But for anyone who cares to look, the public record is filled with more than enough information to elicit serious concern about the Iranian threat and spur demand that Washington take more concerted action. Consider just the following:
Money Laundering: Iran has already been caught evading sanctions through Venezuela when an Iranian bank in Caracas was sanctioned by the Treasury Department for providing financial services to Iran's military.
Drugs: U.S. law enforcement officials believe that a weekly commercial flight between Caracas and Tehran and Damascus (dubbed "Aero-Terror" by Brazilian intelligence because no one knows who or what are on those flights) is used to traffic illicit drugs from South America to the Middle East.
Uranium: Venezuela possesses vast amounts of uranium, primarily in the Roraima Basin along its border with Guyana. Across the border in Guyana, a Canadian company is mining uranium. On the Venezuelan side of the border, we are to believe Iran is operating a "gold mine."
Terrorism: A member of the terrorist network plotting to detonate fuel tanks at JFK International Airport in New York in 2007 was arrested on the run to Venezuela where he planned to board a flight to Tehran. An explosive documentary, "The Iranian Threat," aired last month on Univision, presenting not only incriminating information on Venezuelan and Iranian diplomats discussing cyberattacks on sensitive U.S. computer systems (the State Department subsequently expelled the Venezuelan diplomat from the U.S., where she had been re-posted), but also compelling evidence on how young Latinos are targeted for recruitment and paramilitary training in Iran and Venezuelan camps visited by Hezbollah, Hamas, and the Colombian FARC.
Again, this is but a sliver of the information that has already been made public about Iran-Venezuela machinations. Instead of pundits pining for that "smoking gun," they should be demanding what is it that we don't know?
Thankfully, Capitol Hill is starting to get active on this issue and will press the administration for answers on these important questions when they return later this month. The White House will also likely find itself on the defensive on this issue during this election year -- and that is all to the good if it focuses policymakers minds on the problem.
And as the layers of the Iranian-Venezuelan relationship continued to be stripped away, it is a virtual certainty that even more distressing details of the threat posed to the United States will emerge. But the longer we wait, it will prove only more difficult to counteract.
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An end-of-the-year assessment of U.S. policy towards Latin America could possibly qualify for the world's shortest blog. For a President who has clearly established that foreign policy is not something that gets him up in the morning (or appears to keep him awake at night), Latin America must rank just above Antarctica in descending areas of interest.
This uneven, sporadic focus on the region has led to only adverse consequences for U.S. interests. What effort the administration does expend seems only directed toward placating a smattering of hostile populist regimes, while ignoring the interests of our friends. Indeed, the predictable response is that we have only emboldened our enemies and despaired those in the hemisphere who share the U.S. vision of open political systems, free markets, and robust trade.
Radical populists in Venezuela, Ecuador, and Bolivia have run roughshod over democratic institutions and the best Washington can come up with is asking for the terms under which a U.S. ambassador would be allowed to return to their capitals. In Nicaragua, Daniel Ortega is likely chuckling at the feeble U.S. response to his recently rigged re-election.
It also appears that the administration has lulled itself into complacency over a cancer-stricken Hugo Chávez in Venezuela, ground zero for regional instability, seemingly content to wait and see what happens after Chávez passes from the scene. But even as his circus antics continue, he is leaving behind what my colleague Roger Noriega calls a mountain of toxic waste that will take years to clean up.
Chávez's days may indeed be numbered, but his friends in Iran, Russia, China, and Cuba are certainly taking the long-term view of things. All four have been great beneficiaries of Chávez's political solidarity and oil-fueled largesse and can be counted on to want to maintain that access with or without him in power. In other words, don't count on them to support a democratic transition away from Chavismo, only a succession. Every day, the United States stands idly on the sidelines, the chances they will succeed improve.
The administration's complacency may also be due to the current economic boom the region is experiencing, as commodity producers are riding the great wave of Chinese demand. If the U.S. profile in the region has diminished, does it really matter? Times are good, government coffers are relatively full, and poverty is declining.
The problem with this scenario is that Chinese demand will not always be there. The Chinese economy as it exists today will not be the same one a decade from now. Moreover, long-term regional prosperity is not going to be built on producing raw materials for the development of the Chinese economy today. All the current boom is accomplishing today is masking over the deep structural changes that are still desperately needed in most of the region's economies.
There will be many who will cheer-lead that Latin America is finally out from underneath the United States' long shadow and doing great "on its own" - but such sentiments are short-sighted. Many challenges remain: transnational criminal organizations involved in the drug trade continue to wreak havoc, making a mockery of rule of law along with corruption in many countries; too many citizens in the region are shut out of their country's economies through excessive regulation and other barriers; and doing business in the region is still too difficult to draw the kind of investment that is flowing to Asia.
It's not the United States has all the answers for what ails the hemisphere, but what we can offer is steady partnership over the long-term to confront the challenges together. For security, economic, energy, and political reasons, we have a vested interest in the fortunes of our neighbors to the south. And they in ours. It's time we elevated those relationships to reflect that reality.
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The next Republican president needs to look at Brazil as we do Canada and Mexico. Consider that Brazil is currently the sixth or the seventh biggest economy in the world, and depending on whose projections you follow, is forecasted to become the fifth sometime in the next ten years. After 16 years of political and economic stability, targeted social programs, and private sector led growth through the opening of the economy, over 25 million people have been pulled out of poverty.
Much has been written about the major oil discoveries off the coast of Brazil. Some predict that Brazil will be one of the top five oil producers in the world in 2020 and the largest in South America. There is talk of as much as $1 trillion needed to drill off shore in very complicated contexts to achieve these production levels. The business opportunities for American oil and oil service companies and the changes to the way we think about energy security are favorable to the United States.
Brazil is the leading producer and innovator in the field of biofuels with significant portions of their car and truck fleets running on sugar based ethanol.
Not as publicized, but equally important, Brazil has, for the most part, gotten a handle on its rainforest problem and is seeking to balance agriculture (mainly soy and beef production) with preservation of the rainforest. With three center-left governments elected since 2002 with the implicit or explicit backing from the Green party, the debate between agriculture and environment has found a balance the Brazilians are happy with. Recent satellite photos demonstrate that the rainforest is reclaiming over 20 percent of the lands that have been cut down. Ask yourself when was the last time you heard a plea from an environmental NGO to "save the rainforest" and you'll see what I mean.
Brazil is hosting the World Cup and the Summer Olympics over the next five years. Even if we don't take soccer seriously, the rest of the world does and these are both big prestige wins for Brazil and a big opportunity for American business.
Brazil's largest trading partner is China -- something that has happened only in the last five or seven years. Its second is the European Union with the United States close behind. At the same time, the bloom has come off the rose with the Chinese and this may present an opportunity for the United States over the medium term on a free trade agreement between the United States and Brazil. The Brazilians are concerned about the "invasion" of "cheap" Chinese manufactured goods competing with local Brazilian goods. In other words, in the Brazilian Mind: "selling soy to China good. Buying Chinese shoes is bad..." This may be our opportunity to restart bilateral trade talks down the road if this continues to be a source of worry for the Brazilians.
The U.S. embassy in Brazil processes more visas to visit the United States than that of any other country in the world -- more than China. By the way, we are well represented in the country by Ambassador Tom Shannon -- Shadow Government readers will remember him as Assistant Secretary for Western Hemisphere in Bush 43.
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Having spent a week in Brasilia, Sao Paulo, and Rio meeting with senior representatives of the Brazilian government and major influencers in the country, it's clear to me that Republicans and conservatives need to understand that Brazil could be as consequential to the United States in the next twenty years as Canada or Mexico are to us now. The next Republican president needs to make Brazil a top priority by firstly, naming a high-level ambassador and secondly, making Brazil one of his first stops overseas.
Brazil is still considered a developing country, but this classification is about ten years out of date. The United States needs to develop new ways to work with countries like Brazil that are on their way to becoming industrialized countries. Instead of foreign aid and development, we have "cooperation interests" with Brazil that are linked to our foreign policy, national security, and commercial interests.
Republicans and conservatives, like others across the political spectrum, have historically had other interests in the region (e.g. Cuba, Venezuela, Mexico, Colombia, and Nicaragua to name a few). Brazil has not presented itself to the United States as either a security threat or much of a market. There, of course, have been historical ties that are often overlooked and ignored (e.g. Brazil sending troops to fight on the Allies' side in World War II).
The Brazilians have been too poor, too self involved, or too chaotic to warrant much of our attention or for them to pay us too much attention. Also, in moments of delusions of grandeur, the Brazilians have seen themselves almost as rivals to us -- something we have not reciprocated for the simple fact that Brazil has not been on our radar.
Over the last 20 years, much of the energy in the relationship has been around the environment. Many will remember the "Save the Rainforest" campaigns focusing on the Amazon of the late 80s and early 90s.
Finally, how many people in the United States actually speak Portuguese who do not have some family tie to the language? The Latin Americanists, almost to a person, speak Spanish and focus on Spanish speaking countries for good reasons. All of the above is changing or is going to change.
The window of opportunity is there.
Following the lead of Presidents George W. Bush and Luiz Inácio Lula da Silva, Presidents Barack Obama and President Dilma Rousseff have been deepening relations between the two countries since at least 2005, with more frequent meetings and on-going high-level government dialogues. Rousseff and her Foreign Minister Antonio Patriota are broadly pro-American. We have an opportunity to consolidate this relationship and move it from a third level relationship to a first level relationship over the next 10 years. If there is a Republican in the White House in 2013, we need to build on the Bush/Obama legacy, create an office in the State Department focused solely on Brazil, just as we have for Canada, and find new, more strategic ways to work together through networks that exist or that need to be built between our two societies.
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Monday night in Caracas, opposition candidates to President Hugo Chávez held their first debate to decide who will challenge him in the scheduled October 2012 Venezuelan presidential election. In a sign of their continuing political maturation, the candidates rightly addressed bread-and-butter issues that matter to the vast majority of Venezuelans, such as the country's skyrocketing crime rate and Chávez's poor management of the Venezuelan economy.
The debate represented another important step forward in the Venezuelan opposition's long road back to political relevance. For most of the past decade, the image of the opposition -- shared by official opinion in Washington -- has not been favorable. It was seen as disorganized, hopelessly divided, and lacking in a vision that could cut into the broad working-class support for Hugo Chávez. That has been changing, however.
And with serious questions being raised about Chávez's health, and whether he will even survive until October of next year (in a telling recent comment, Chávez told his followers that, "The revolution cannot depend on one man"), all of a sudden the Venezuelan opposition takes on a whole new importance - one that the Obama administration must recognize and adapt to accordingly.
The leading candidates are Henrique Capriles, governor of Miranda state, which includes much of Caracas; Pablo Pérez, governor of oil-rich Zulia state; Leopoldo López, former mayor of Chacao municipality in Caracas; and Maria Corina Machado, a founder of the civil society organization Súmate.
All four represent a new generation of Venezuelans with no ties to the old-line parties that Chávez has used as fodder in his rise to power. All the candidates convey youthful vigor and an understanding that today's Venezuela is vastly different than that of their parents. They say they want to break down the country's polarization under Chávez and provide more opportunities for marginalized communities. They also say they will unite behind whoever wins their February 2012 primary for the right to take on Chávez.
Any of the candidates can win over wealthy and middle-class voters; the key is whether they can win over disaffected Chávez supporters fed up with the hash he has made of the Venezuelan economy, the deterioration of public services, and soaring street crime.
Make no mistake about it, however: if somehow Chávez remains healthy enough to campaign and make it until next October, he will be re-elected. His popularity, willingness to spend billions for his re-election, and his control of the electoral mechanisms make him the prohibitive favorite. But that is the point -- if he is healthy. If he succumbs to his cancer, then all bets are off.
Thus, the Obama administration needs to approach the election as anything but a perfunctory Chávez victory and instead prepare for a possible tectonic shift in Venezuelan politics. That means expressions of solidarity with candidates who are trying to play by democratic rules and speaking out against Chavista attempts to rig the election for his chosen successor, if it comes to that. Chávez's faltering health means that there is every chance October 2012 will bring an opportunity for the Venezuelan people to chart a new course, one that combines an awareness of the great disparities in Venezuelan society without the radicalism, rancor, polarization, and anti-Americanism of the past twelve years. It is crucial therefore that Washington not be on the sidelines as these events play out, but is actively engaged to promote our considerable interests in such an outcome.
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Many of the news reports on Argentinean President Cristina Kirchner's landslide reelection victory this past weekend contained a healthy dose of skepticism on the sustainability of her populist economic model. The skepticism is well-founded. We've all seen this movie before, and know exactly how it ends.
Heavy state intervention in the economy, massive subsidies, and the
redistribution of income -- the hallmarks of economic populism -- have a way of
playing themselves out, proving time and time again that lasting prosperity can
never be built on acquiring unlimited debt or just printing more money.
As UCLA economist Sebastian Edwards, a Chilean, writes in his brilliant takedown of Latin American populism, Left Behind: Latin America and the False Promise of Populism, all populist experiments begin with great euphoria and surges in economic growth, but invariably lead to rapid inflation, higher unemployment, and lower wages -- and soon thereafter, stagnation and crisis.
There is no question that right now times are good in Argentina. Since the country hit rock bottom in 2002, when it defaulted on $100 billion in debt, the largest sovereign debt default in history, the country has undergone a seemingly remarkable turnaround under the stewardship of the late Nestor Kirchner and now his widow, Cristina. The economy is expected to grow by 8 percent this year and unemployment is at a 20-year low.
But the problem is that Argentina's economic success has been built not on
strong fundamentals, but on a tenuous foundation of heavy government spending,
high commodity prices, and strong demand from China and Brazil for soy and
other agricultural products. And what goes up in economics can always come
Other troubling signs are double-digit inflation, which private economists put at 25 to 30 percent; capital flight ($9.8 billion was pulled out of the economy in the first half of this year, compared with $11.4 billion in all of 2010); and plummeting foreign investment (down 30 percent in the first half of 2011).
The other elephant in the living room is the fact that Argentina has been shut out of credit markets since it left bondholders holding the bag in billions of dollars of unpaid debt from its 2002 default. Not only has there been no reconciliation, but the Kirchner government has gone out of its way to reject lawsuits and other claims from creditors. As a result, the Obama administration and multilateral lenders have refused further loans until Argentina begins to repay what it owes investors and settle with holders of defaulted debt, as well as adhere to its obligations with institutions such as the International Monetary Fund.
Yet despite warnings by economists that the government's profligate spending, coupled with a global economic slump, could spell disaster, the Kirchner administration soldiers on. Indeed, why wouldn't it see her overwhelming reelection victory as anything but a mandate to continue its unorthodox ways? "After a lifetime of pushing those ideas," she said after her victory, "We now see that they were not a mistake and that we are on the right path."
On the other side, former President Eduardo Duhalde, who unsuccessfully challenged Kirchner, said, "We're happily dancing on the Titanic."
Given the prevailing capital flight and declining investment in Argentina, the smart money is obviously on Duhalde. Fortunately, those players are in a position to avoid the risk; what's unfortunate are the millions of poor and middle-class Argentineans who will once again pay the price for Argentina's populist folly when the inevitable day of reckoning returns.
In the Al Pacino epic Scarface, about Miami's violent cocaine culture of the 1980s, the drug kingpin is seen as a Bolivian ensconced in a luxurious mountain villa with a handful of Bolivian generals in his pocket. It was of a piece with the times. (Bolivian dictator General Luis García Meza Tejada would later be sentenced to 30 years in jail for drug trafficking.)
However, through the 1990s and 2000s, successive Bolivian governments worked with the United States to cripple the drug cartels operating there, so much so that the notion of a South American narco-general seemingly had been dumped into the historical dustbin.
Well, thanks to Venezuela's Hugo Chavez and Bolivia's Evo Morales, the South American narco-general appears to be rising again from the ash heap. Last week, a federal judge in Miami sentenced the former head of Bolivia's elite counternarcotics unit, General René Sanabria, to 14 years in prison for arranging protection for a shipment of some 140 kilos of cocaine from Bolivia to the United States. He was captured in June in Panama in a DEA sting and reportedly controlled a network of some 40 dirty cops.
Such is the outcome of Morales's decision in 2008 to expel the DEA from Bolivia, one of the largest cocaine producers in the world. Morales, a coca grower union leader, said the DEA's presence was an offense to the country's "dignity." Since then, the production and trafficking of cocaine has skyrocketed, with drug traffickers from Brazil, Colombia, Mexico, and elsewhere seizing the opportunity to expand operations in Bolivia.
This month, the State Department again cited the Morales government as having "failed demonstrably" to adhere to their obligations under international agreements to combat narcotics trafficking.
Lumped in with Bolivia and Burma as countries that have also failed demonstrably is Venezuela, where Morales benefactor Hugo Chavez relies on his own share of narco-generals to maintain power. Earlier this month, the Treasury Department added another of Venezuela's most powerful generals, Cliver Alcalá, to its kingpin list, where he joins two others designated in 2008, the Commander-in-Chief of the Venezuelan military, General Henry Rangel Silva, and the Chief of Military Intelligence, General Hugo Carvajal. (The Treasury designation means any assets the individuals have in U.S. accounts are frozen and U.S. citizens are barred from doing business with them.)
All three are charged with aiding and abetting the activities of drug-running guerrillas in neighboring Colombia and all three were named by captured Venezuelan drug kingpin Walid Makled as having been on his payroll and facilitated his drug trafficking operations. (Unfortunately, the Obama administration failed to pursue Makled's extradition from Colombia, and he was sent back to Venezuela.)
U.S. law enforcement agencies -- particularly the DEA -- deserve great credit for following these investigatory leads wherever they have gone, considering the Obama administration's preference to avoid confrontations with Hugo Chavez and his regional acolytes. For a variety of important reasons the U.S. government needs to keep pushing for more designations and indictments, not the least of which is to send an unmistakable signal that this regional backsliding on the counternarcotics front is a growing concern.
For example, in Venezuela's case, Makled claimed he had videos and other documentary evidence implicating some 40 Venezuelan generals in his illicit activities. In Bolivia, opposition members believe the Sanabria case is only the "tip of the iceberg."
The Venezuela cases in particular deserve close attention, since narco-generals like Rangel Silva and Carvajal will work to spoil any democratic transition if Chavez's health should fail him, since their protected status could not be guaranteed in a post-Chavez Venezuela. They may be presently out of the reach of the U.S. law enforcement, but the continued "naming and shaming" of the narco-generals and, even better, their indictments by the U.S. government will make them less able to carry out their nefarious crimes.
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Self-styled diplomatic troubleshooter Bill Richardson deserves at least some credit for yet another attempt to free U.S. aid worker Alan Gross from a Cuban state security prison. But his recent strange foray into Cuba should make it pretty clear to any sentient being of the futility of trying to negotiate anything with the Castro regime. It's the diplomatic equivalent of bringing a knife to a gunfight.
Richardson insists he was invited by Cuban officials to discuss the Gross case once Cuba's kangaroo court proceedings against him were complete. Since Gross was sentenced in August to 15 years in prison for the crime of bringing internet equipment to a small Cuban Jewish group, Richardson made the trip.
However, once he arrived in Havana, he was told in no uncertain terms that Gross was going nowhere, that he couldn't even meet with him, and that Richardson would not be granted a de rigueur audience with current Cuban figurehead Raul Castro.
At first, a defiant Richardson said he wouldn't leave Cuba until he saw Gross, but then -- evidently reconsidering the implications of an extended stay in the Castro brothers' Stalinist paradise -- he unceremoniously returned to the United States.
Apparently, what had upset the Castro brothers was that Richardson had committed the egregious faux pas of actually speaking the truth while in Cuba, referring to Gross as a "hostage" in an interview. In this, Richardson did indeed slip-up, forgetting that in totalitarian societies language is perverted, white is black, and Alan Gross is not a hostage, but a "criminal" convicted of grave crimes against the State.
Upon his departure from Cuba, Richardson said, "Unfortunately after this negative experience, I don't know if I could return here as a friend." But in a subsequent interview with CNN's Wolf Blitzer, it wasn't clear what Richardson learned from this experience.
He said that at a "delightful" and "wonderful" three-hour lunch with Foreign Minister Bruno Rodriguez, he was "dramatically snubbed" and "slammed" with the news that the Gross issue was off the table. He went on to blame his failure to see Gross on "hard-liners" within the Castro regime who oppose improved U.S.-Cuban relations, even as he considered Raul Castro a "moderate."
Such comments betray a supremely facile understanding of the nature of the Castro regime or recent events in Cuba. If Raul Castro is a moderate, then Fidel Castro is positively a liberal, since the human rights situation under Raul's tenure has measurably worsened, with the arrests and persecution of Cuban dissidents exceeding anything in years prior.
Secondly, the claim that unnamed "hard-liners" in the regime are out to torpedo improved U.S. relations again misunderstands Cuban reality. The Castro regime is perfectly willing to normalize relations with the United States -- the issue is they are not willing to make any concessions to achieve it. In their minds, they have done nothing wrong; it is the United States that is the guilty party and it is the United States that must rectify the situation by unilaterally changing policy.
As far as the case of Alan Gross, the effort to free him has been botched from the start. It was a tragic miscalculation to believe that "quiet diplomacy" and relying on the good will of the Castro regime had any chance of success. The notion that his case has frozen progress in U.S.-Cuba relations means nothing to the Castro brothers, since you can't miss something you never had. It is only when the administration starts driving up the real cost to the regime of Gross's continued incarceration by rolling back U.S. travel and other economically beneficial policies to the regime will it begin to truly reassess the value of their hostage.
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Venezuelan President Hugo Chavez says he feels "great" after another dose of chemotherapy for his as-yet-unspecified cancer. If only the Venezuelan economy was in as good shape as Chavez says he is in. In fact, what Chavez ought to explain is why his vaunted "21st Century Socialism" bears an uncanny resemblance to the garden-variety 20th century kind: replete with widespread inefficiencies, declining production, and rampant shortages.
A new study out, Gestión en rojo (Management in the Red, a play on the ubiquitous color of Chavez's Bolivarian Revolution), explains why, in part, the Venezuela economy remains in critical condition: Chavez's excessive confiscation and nationalization of private sector companies.
Convinced that profiteers, speculators, and assorted other chislers have been rooking the Venezuelan people by charging "unjust prices" for their goods and services, Chavez has ordered up the seizure of some 1,000 companies since 2002. In fact, this week, while lying in a military hospital where he is being treated, Chavez demanded that the takeover of land from Irish company Smurfit Kappa be expedited. "We have to take the last square meter of land from Smurfit," he announced on TV. "Let's move more quickly, that's an order."
It's telling how Chavez announces each nationalization with great fanfare, but then never seems to report back to anyone on what becomes of that enterprise a few years down the road.
In Gestion en rojo, three Venezuelan economists did just that, tracking the performances of 16 nationalized companies over a two-year period. The results are hardly surprising: most of the enterprises are running at only a fraction of their capacity and depend on direct government subsidies to maintain operations, if they are operating at all.
According to the lead author, Richard Obuchi, "Government ownership of companies is often accompanied by deficit problems and lack of incentives to be effective and efficient.
Add to that price controls that force companies to sell products for less than their production costs and directives that companies devote resources to overtly political initiatives and you have egregious economic dysfunction.
Chavez's problem is that he is fast running out of cash to sustain this dysfunction and all of his grandiose spending projects that fuel his popularity. Oil production -- his golden goose -- is declining, forcing him to borrow at a record pace. (According to Bloomberg, because of Chávez's anti-market policies, Venezuela already has the highest borrowing costs among major emerging-market economies.)
What all this portends for Venezuela's presidential election in 2012 remains to be seen, but it doesn't bode well for Chavez, who, despite his potentially debilitating illness, insists he will run for reelection. It may be that his working and lower class base won't care much that their country ranks 129 out of 129 economies in the 2011 International Property Rights Index or that it ranks 172 out of 183 countries in the World Bank's 2011 Doing Business Report (behind Iraq and Afghanistan).
But they will care about the shortages of basic goods, the electrical blackouts, the region's highest inflation that is cutting the value of their incomes and savings, and the mortgaging of their children's future that is the result. A reinvigorated Venezuelan opposition promises to focus on those bread-and-butter issues and Chavez will no doubt try every trick in the book to avoid discussing that record. The Obama administration needs to keep a close eye on Venezuela over the next several months, as Chavez -- if he remains healthy -- will have no qualms about tilting the playing field in an election that is looking increasingly unfavorable.
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The Associated Press dispatch from Honduras this past weekend opens thus:
The return of ousted former President Manuel Zelaya from exile Saturday brings Honduras' nearly two-year political crisis to an end and hope to one of the poorest nations in the Americas."
Sure. And if you believed that, you'd believe Fidel Castro is going to call for free and fair elections in Cuba next week.
Only the willfully deluded or the dangerously naïve would believe that the return of the disgraced former president means anything more than increased civic disturbances, more violence, and more chaos in one of Latin America's poorest countries.
Why? Because that is the way Hugo Chavez wants it.
The Venezuelan autocrat has bankrolled the two-year exile of his puppet Zelaya, as well the international campaign to force the oligarch-turned-populist's return to Honduras. Chavez has never gotten over the fact that Zelaya's attempt to replicate the Chavez model in Honduras was cut short by his impeachment by the Honduran Congress and his removal from office by order of the country's Supreme Court for violating the country's Constitution and other illegal acts. (Zelaya's apologists insist on characterizing what transpired as a "military coup.")
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The only thing more incongruous than the Ecuadorean government's statement that they hoped that their recent expulsion of U.S. Ambassador Heather Hodges wouldn't harm U.S.-Ecuador relations is that the Obama administration apparently hopes it doesn't either. Days after President Rafael Correa kicked Ambassador Hodges out of the country, Ecuadorean Foreign Minister Ricardo Patiño called Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela to discuss the matter (including the reciprocal expulsion of the Ecuadorean ambassador in Washington). In describing the conversation, an Ecuadorean official said the two confirmed "the political will of both parties to reach a solution to the diplomatic impasse."
The "impasse" began April 5, when Correa PNG'd Hodges over the contents of a Wikileaked cable justifying revoking the U.S. visa of the corrupt former head of the Ecuadorean National Police. In a sidebar comment, the cable noted that the official's corrupt activities were so well-known that it was unlikely Correa was unaware of them when he appointed the official to the top job. For the notoriously thin-skinned and impetuous Correa, this was too much, and Hodges was given 48 hours to leave the country.
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Hugo Chavez continues to ruin his country, and a recent book analyzing Chavismo explains how and why. Dragon in the Tropics: Hugo Chavez and the Political Economy of Revolution in Venezuela, published by the Brookings Institution and written by Professors Javier Corrales and Michael Penfold, is a must read for those who want to understand how Chavez came to power and why he is doing what he is doing, despite the unintended consequences of ruining his most precious asset, the national oil company PDVSA. The book is suitable for policymakers and students of Latin America and Venezuela generally, but there is something for the theorists as well in that the authors discuss democratization, institutional theory, and political economy. My only significant criticism is that they label the Chavez regime a "hybrid" regime because they believe it remains sufficiently democratic to call it that. I believe this term is a bit mushy. A regime is not truly democratic anymore when the executive increases his power relentlessly and coercively and uses it to destroy checks and balances and to co-opt all other branches and institutions of government as well as the economy to do his bidding, to the point that the secret ballot is compromised.
Chavez is like many dictators past and present: he came to power using the ballot box (after two violent and failed coup attempts) and once gaining it, has done all he can, legally and extra-legally, to hold it. Buying support with oil largesse is not necessarily undemocratic, but unequal application of the laws, punishing opponents economically via state power and corrupting the election process is indeed undemocratic. The fact that public opposition to Chavez cannot now be turned into an electoral victory because of his subversion of most institutions makes such "hybrid" democracy look a lot like Mubarak's Egypt, and few considered that fake republic worthy of the designation "democracy."
That Chavez is so thoroughly and efficiently ruining his country should surprise no one who has followed his career. What he showed himself to be in his two coup attempts in 1992 and again as he campaigned for the presidency in 1997 has not changed except in terms of vigor, determination and increasing power. That he is not a democrat and intends the destruction of all opponents is obvious -- even to those who have waited too long to pronounce this judgment, (Sean Penn notwithstanding). That he manipulates the economy with a heavy-handed statism that would embarrass his "oligarch" predecessors is also obvious. Meeting the basic needs of the poor and raising many out of extreme poverty are good things in themselves and he has done this for some years. But when done by economically ignorant means and for undemocratic goals that destroy the goose that lays the golden eggs as well as a democratic and republican form of government, however weak it was, is not laudable. Truly the dragon is harming the entire country even as he tries to destroy his opponents.
How has he been able to do this?
As Corrales and Penfold reveal, very shrewdly as to tactics and methods but foolishly as to long-term strategy. While his fate is not certain, and the authors make an interesting case theorizing as to why he might survive the eventual collapse of oil prices, he is now and will continue to harm the very poor he purports to aid because of his efforts. Inflation harms everyone; PDVSA's decline means Venezuela's only significant export is evaporating; and the corruption his "hybrid" regime has spawned is disillusioning his base. And all this is what Chavismo is now delivering in abundance.
In the wake of this week's progress on advancing the U.S.-Colombia free trade agreement, it was to be expected that critics of such accords would speak up. Most of the U.S. criticism, naturally, argues that the agreement is not in the U.S. interest. Two experts from Third Way nicely dispensed with some of the misperceptions underlying common critiques earlier in the week.
I have to say that I have long wondered why Colombia's leaders have wanted to do this deal. I really don't see much in it for Colombia."
Prestowitz's logic proceeds as follows:
1. Assume free trade agreements are all about tariffs and market access.
2. Note that U.S. preference programs allow 90 percent of goods to enter the United States without paying any tariffs.
3. Conclude that Colombians have naively succumbed to "the same knee-jerk ‘free trade is always win-win' doctrine" espoused in American universities and are acting against their own self interest.
To Foreign Policy's sophisticated readership, it may seem a bit odd that a country like Colombia would devote so much time and effort to negotiating the agreement and seeking its passage without even bothering to assess the country's current market access terms. And yet, how else can we explain their behavior? What could they be thinking?
One radical approach would be to ask. A couple years back I did just that in the wake of the implementation of the U.S. FTA with Peru. There are important differences between Peru and Colombia, of course, but both enjoyed substantial access to the U.S. market under the same preference programs (Andean trade preferences). I conducted a series of interviews in Lima with those who were instrumental in negotiating the agreement, with academics, and with leaders in key sectors such as pharmaceuticals and textiles.
The continuing momentous events in North Africa and the Middle East understandably overshadowed former President Jimmy Carter's trip last week to Cuba. That is unfortunate, because rather than compel any rethinking of U.S. policy towards Cuba -- as was the trip's purpose -- it only provided another salient lesson on the futility of attempting to appease tyranny.
For the record, here is a short accounting of what President Carter did in Cuba:
Apparently to balance out these activities, lest no one suspect where his sympathies may actually lie, President Carter also met with Cuban dissidents and religious leaders and did otherwise recognize Cuban human rights by saying that he hoped that "in the future" all Cubans have the freedom to speak, assemble, and travel.
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It's not easy to portray an international oil company in a sympathetic light, but Ecuadorean President Rafael Correa has managed to pull it off. At first blush, an Ecuadorean court's recent $8.6 billion dollar judgment against Chevron for environmental damages -- which made headlines around the world -- appears to be something out of an anthropology major's most garish fantasy: a multinational company despoils a pristine rain forest, sickening its indigenous residents, refuses to pay, and then receives its comeuppance in a court of law.
However, as one begins to strip away the layers, the case resembles more a shady attempt to shakedown a large multinational that says infinitely more about the shortcomings of Ecuadorean justice than it does about who did what to whom and who is responsible.
It would be impossible in this space to recount all the twists and turns in a case that has been in litigation for the past 18 years, but the basic facts are these: From 1964 to 1992, Texaco, which Chevron acquired in 2001, operated in northeastern Ecuador in a minority partnership with the state-owned oil company, Petroecuador. When the concession expired, Texaco left the country, but not before reaching a $40 million agreement with the government to clean up a portion of the area. It was then released from all future liability. Petroecuador has continued to operate in the area up until this day.
Chevron, which inherited the lawsuit when it acquired Texaco, has argued that Texaco met its obligations under the previous agreement and that any further remediation is the responsibility of Petroecuador. The plaintiffs have disavowed the agreement and assert Chevron owes billions more on behalf of Texaco, even though neither has drilled in Ecuador in almost twenty years. (Competing websites on the case can be found here and here.)
Yet for all the hoopla surrounding the case, it is unlikely that the plaintiffs will receive one cent from the judgment. It's not just that Chevron owns no assets in Ecuador, but that no responsible court anywhere in the world is likely to support seizing Chevron assets based on a verdict tainted by such flagrant political interference, judicial and plaintiff misconduct, and double standards of justice. (This week, a federal judge in New York extended a temporary order banning any collection of the judgment.)
Particularly damaging to any sense of due process in the case has been the actions of the Correa government. According to Investor's Business Daily, not only have "the plaintiffs been repeatedly caught in embarrassing acts of fraud and collusion with the Ecuadorean government and its courts," but, "It's been so bad -- an Ecuadorean judge was caught on candid camera telling plaintiffs the fix was in on his future ruling, and an ‘independent assessor' was caught on film outtakes colluding with plaintiffs -- that the entire court system is clearly compromised."
President Correa himself has been waving the bloody shirt, declaring Texaco guilty of "crimes against humanity," threatening judges with prosecution if they don't support the government's position, and offering the plaintiffs state resources to pursue their case.
Indeed, as if such flagrant trampling on the rights of the defendants were not enough, contrast the Correa government's untoward behavior in the Chevron case with that of another environmental crisis in a different part of Ecuador.
In the town of Tenguel, in the banana-growing province of Guayas, a local environmental activist, Esther Landetta, has been waging a lonely -- and dangerous -- battle against the ongoing contamination of four rivers as a result of irregular and unmonitored mining activities that have been discharging toxic waste into the waters, endangering the health of the local population and threatening their agricultural livelihoods.
Amnesty International has profiled Ms. Landetta's case as a result of the intimidation and death threats she has received for her campaign to get the government to stop the contamination of the region's rivers. Her pleas have fallen on deaf ears, however, primarily because she says the processing plant causing most of the pollution happens to be owned by a close advisor to President Correa, Galo Borja, a former Coordinating Minister for Strategic Industries and former Undersecretary of Foreign Trade.
Ms. Landetta told the Ecuadorean magazine Gestión, "I always said that, while this man (Borja) is high above in power, it will be difficult to have our rivers free of mining." She also said she secured a meeting with President Correa to discuss the matter, but that as she began to explain the problem, "He just got up and left, right in the middle of conversation. He would not hear anything."
Clearly, in Ecuador, such double standards indicate that the Correa government is less interested in seeking justice than it is in making sure the most expedient ox is gored. Attacking a huge oil multinational like Chevron makes for great politics at home and allows Correa to deflect scrutiny of his own state oil company's culpability in the matter. But turn the spotlight of justice around on the radical populist and all of a sudden they have another appointment that they forgot about. Of course, scapegoating has always been an essential part of the populist toolkit. But while targeting alleged, high-profile culprits may be entertaining to some, the resulting damage to rule of law and the interests of all Ecuadoreans is no laughing matter.
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The Qaddafi regime's use of deadly force against protesting Libyan citizens has been properly met by condemnations from responsible governments around the globe. And then you have the outliers.
It may surprise some that this includes several governments in the Western Hemisphere, led by Nicaragua's Daniel Ortega, the one-time petty dictator who posed as a born-again democrat to capture his country's presidency in 2006 (only to revert to his autocratic ways).
To great fanfare, Ortega pronounced, "I have been speaking with Qaddafi on the telephone ... he is again fighting a great battle, how many battles has Qaddafi had to fight. In these circumstances they are looking for a way to have a dialogue, but defend the unity of the nation, so the country does not disintegrate, so there will not be anarchy in the country."
It bears noting that the last time Daniel Ortega was heard from on a global scale was in 2008. Nicaragua was the only country to recognize the independence of the South Ossetia and Abkhazia regions of Georgia following the brutal Russian invasion.
Also displaying solidarity with the murderous Qaddafi regime is Ortega's guiding light, Fidel Castro, who gamely tried to change the subject by telling the world that, "The government of the United States is not concerned at all about peace in Libya and it will not hesitate to give NATO the order to invade that rich country, perhaps in a question of hours or very short days."
The support for Qaddafi, as detestable as it is, is not hard to understand. After all, both Ortega and Castro, along with Venezuela's Hugo Chavez and Bolivia's Evo Morales, are all past recipients of the Muammar Qaddafi International Human Rights Prize, bestowed by the Libyan dictator himself.
For his part, the loquacious Chavez has been unusually silent on the Libyan situation. That is quite different from September 2009, when Chavez hosted Qaddafi in Caracas, exclaiming, "What Simon Bolivar is to the Venezuelan people, Qaddafi is to the Libyan people." He also awarded him Venezuela's highest civilian decoration, saying, "We share the same destiny, the same battle in the same trench against a common enemy, and we will conquer."
Chavez critics are currently giving him his comeuppance, "Our garrulous president is keeping a thunderous silence," wrote Teodoro Petkoff in the newspaper Tal Cual. "Now that the democratic rebellion has reached Libya, Chavez is looking the other way and even abandoning his disgraced ‘brother.'"
Compare all this with the reactions of serious governments in the region, such as Peru, Colombia, and Chile, who have all forcefully condemned the attacks of protesters, with Peru breaking relations with Libya all together.
All this crystallizes the situation for the United States in Latin America today: between serious governments with whom we can do business and the irresponsible outliers with whom we share hardly any common interests. It is a distinction the Obama administration doesn't always seem to appreciate. At a House Western Hemisphere subcommittee hearing last week, Rep. David Rivera (R-FL) chided Assistant Secretary of State Arturo Valenzuela on this score, saying that our hemispheric policy seems to be all about trying to make up with our enemies and ignoring our friends. Let's hope the disparate reactions to the carnage in Libya will serve as a wake-up call to realign our priorities in the Western Hemisphere.
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As the world's attention remains rapt with the surge of "people power" in North Africa and the Middle East toppling and threatening to topple unpopular dictators, the Brookings Institution this week hosted a panel discussion on ways the United States could better co-operate with the five-decade-old Castro dictatorship in Cuba.
Talk about a monumental case of bad timing.
Keynoting the session was former New Mexico governor and self-styled diplomatic troubleshooter Bill Richardson, who was in Cuba as recently as last August leading a trade mission of businessmen looking to cut deals with the Castro regime. (Agricultural products are exempt from the embargo.)
Apparently oblivious to the irony of advocating normalizing relations with the Castro dictatorship even as thousands are risking their lives to oppose tyrannies elsewhere, Governor Richardson forged ahead with ways the Obama administration could improve relations with the Castro regime by lessening current U.S. sanctions.
Among them, removing Cuba from the State Department's list of state sponsors of terrorism. According to Richardson, "My view is that this terrorism list is not very consistent. It's an emotional issue." In other words, Cuba's listing lacks merit or substance.
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That's what the new Chairman of the House Foreign Affairs Committee wants to know. In a letter to the State Department last week, Rep. Ileana Ros-Lehtinen (R-FL) expressed her grave concern over reports that the administration was trying to pressure the Honduran government to absolve disgraced former President Manuel Zelaya of his crimes that precipitated the 2009 presidential crisis there.
Rep. Ros-Lehtinen wrote, "It is troubling to consider that the importance of the bilateral relationship between the United States and Honduras would be undermined by attempts to coerce the Honduran government to take steps that run counter to its legal and constitutional processes in order to pave the way for Manuel Zelaya to return to Honduras without facing judicial consequences." She called on the administration to "immediately cease any efforts being taken to undercut the judicial system in Honduras by pressuring the current government to absolve Zelaya of his crimes."
Indeed, absolving Zelaya of his crimes would open the door to his return to Honduras, which appears to be the new administration policy on Honduras. In little-noticed remarks in a December 2010 trip to Tegucigalpa, Assistant Secretary of State Arturo Valenzuela said that, "national reconciliation will advance further when Honduras is able to resolve the issue of the return of former President Zelaya so that the country can regain its place in the [Organization of American States]."
Yet advocating for Zelaya's return is nothing short of reckless, resulting most assuredly in a return to rule of the mob and anarchy. Since his removal from power, the oligarch-turned radical-populist has shown no contrition for his abuses of power and disrespect for the country's constitution. He has continued to wave the bloody shirt while in exile in the Dominican Republic. His actions then and now demonstrate he cares not a whit about endangering Honduran lives in the service of his political agenda.
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Nobody should have been surprised when Bolivian President Evo Morales opened the Conference of Defense Ministers of the Americas (CDMA) in Santa Cruz, Bolivia on Nov. 22 with a one-hour stem-winder against the United States. Given his commitment to leftist populism, it would have been out of character for him to ignore his radical support base or sponsors in Cuba and Venezuela. Still, the conference was not a disaster.
In the end, ministers agreed to support a system of tracking expenditures on conventional arms in both the United Nations and the Organization of American States, to develop cooperative mechanisms to speed military aid to civil authorities in disaster response, and strengthen civilian competency in managing defense ministries. Moreover, they declined to approve Bolivia's motions condemning the United States.
Despite opportunities for incendiary rhetoric, such meetings let senior leaders talk one-on-one with counterparts about issues of mutual interest. Often, the most useful gatherings are not the droning plenaries filled with long speeches, but pull-asides outside the main hall in which decision-makers share private concerns. Since so many of these can't possibly take place through individual travels to Washington or in foreign capitals, it makes sense to take advantage of the proximity that a summit brings.
In unscripted encounters, U.S. Defense Secretary Robert Gates undoubtedly got ear loads on a variety of sensitive topics. He also had several chances to urge agreement on matters important to the United States: counternarcotics, curbing unnecessary weapons purchases, boosting cooperation in disaster response, and strengthening the competency of civilians now working in most of the hemisphere's defense ministries -- much of which made it into the final declaration.
On all sides, participants had time to meet on specific bilateral matters, or to debate such topics as defense spending, donor-recipient relationships, and whether defense and public security missions should be combined or exist as separate functions. These conversations aid mutual awareness and often influence policy-making in neighboring capitals.
What to make of the hosts? Bolivia volunteered to hold an upcoming CDMA during the 2006 ministerial in Managua, and delegations at the eighth conference in Banff, Canada accepted its offer. Shortly thereafter, Morales cooled relations with the United States and set the stage for a tense summit by arbitrarily ejecting U.S. Ambassador Philip Goldberg. Still, Defense Minister Ruben Saavedra reportedly said that Bolivia wanted to improve security ties with the United States in the run-up to this year's meeting.
Thinking otherwise, President Morales began by charging that Washington had instigated coups in Bolivia, Venezuela, Honduras, and Ecuador. He called a U.S. congressman critical of Venezuelan leader Hugo Chávez an assassin and stated that Latin America didn't need economic aid if it involved the kind of market reforms advocated by the International Monetary Fund.
Vice President Alvaro García Linera closed the conference calling for the creation of a unified Latin American state from Mexico to Argentina to blunt the influence of Canada and the United States, as well as the establishment of a Latin American military school and separate military doctrine -- presumably reflecting Venezuelan and Cuban models.
If creating a ruckus defines success, Morales won -- judging by all of the column inches devoted to his remarks. But his was a political rant that didn't match the conference purpose, the demeanor of many of the Bolivian organizers, or the viewpoints of all participants. His one substantive input, on eliminating bank secrecy laws to target narcotics-related money laundering, failed to move.
García's statements suggested a cultural confrontation not terribly relevant to the region's more democratic governments in this era of global interdependence. They seemed uninformed given that most countries have military or police schools that already partner with neighbors and extra-hemispheric players in offering and receiving exchanges and assistance. Nor did they square with U.S. policy encouraging Latin American allies to develop leadership and self-sufficiency in security matters.
Perhaps 15 years ago, the creators of the CDMA process may have contemplated a forum that might include testy members and even hosts whose inputs would be contentious. After all, dissent helps guard against complacency and can focus participants on tasks at hand. And so it may have been that while shouts made headlines, quiet discussions were able to move the agenda forward.
Defense ministers who gathered in Santa Cruz this past week should feel proud they opted for cooperation over division. The citizens of their countries are better off for it.
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Channeling former White House Chief of Staff Rahm Emmanuel and his famous quip, Ecuadorean President Rafael Correa is seizing the country's latest crisis as an opportunity to consolidate his power with the aim of ramming through a radical reform agenda over the objections of his domestic opposition. Displaying an uncanny instinct for outmaneuvering his rivals -- reminiscent of his fellow radical populists Hugo Chavez and Evo Morales -- Correa quickly turned around what began as a police protest against cuts in benefits into high drama designed to discredit the democratic opposition and drum up international support for his regime. Citing no evidence, Correa quickly deemed the police strike (an inexcusable abdication of professional responsibility) as a "coup attempt" by the opposition and fanned the flames of crisis and instability by traveling to police headquarters to confront police, tearing off his tie, and challenging them to "kill me" where he stood.
While Thursday's events were no doubt exploited by sundry opportunists trying to turn up the heat on President Correa, the president's own inflammatory rhetoric and actions only made things worse. Like Chavez and Morales, Correa has a predilection for unilateral action, belittling his opponents, and creating crisis atmospheres. In recent days, after his proposed economic reforms lost the support of his own party, Correa threatened to dissolve Congress and rule by decree until new elections were held.
After Thursday's crisis had passed, Correa showed every indication of pressing his advantage. "I'm not going to negotiate absolutely anything," he said, adding, "Nothing will be forgiven and nothing will be forgotten." Central Bank President Diego Borja further tipped the government's hand by asserting, "This gives us much more energy to deepen changes. Now we can really move the citizens' revolution forward on all fronts."
Correa continues to maintain high approval numbers and last year became the first Ecuadorean president to win two terms in office. But as Chavez has shown, bombast and confrontation may work for a time as a governing strategy, but eventually people tire of the rancor as their concerns return to bread-and-butter issues that impact their daily lives, like the economy and crime. Correa would be wise to recognize that, and the underlying tensions in his country, and adjust his style accordingly. As for outside observers, they should be wary of falling into the populists' trap where every presidential action is ipso facto deemed legitimate, and the actions of the democratic opposition to defend their rights are just as readily discredited.
Despite what you read in the newspapers, don't expect Venezuela's Sept. 26 legislative assembly elections to provide a check on President Hugo Chávez's growing dictatorial powers. Although opposition candidates have decided to participate this time (in contrast to their 2005 boycott), the deck is stacked against them. Media control, gerrymandering, and monopoly of resources could help the governing party maintain or actually increase its legislative majority, despite polls that show widespread dissatisfaction.
Absent a fair contest, the election will be another step toward a one-party state in which more levers of control are in the hands of a capricious dictator accountable to no one. And despite a recent calm in the ugly rhetoric that Chávez has been hurling toward Colombia, the fiery leader could once again aim his sights against democratic neighbors to shift attention from growing problems at home. Leaders of nearby countries should not be complacent, but rather prepare for post-election troublemaking.
Since coming to power, Chávez has limited space for opponents to communicate their views to mass audiences. In 2004, the Law on Social Responsibility in Radio and Television permitted the state to close private media for vaguely defined offenses. Since then, the government has shuttered the country's most popular television network and cable system, closed dozens of commercial radio stations, and threatened cable providers who refused to halt programming to broadcast his frequent, lengthy speeches on all channels. Meanwhile, the state has built up its own network of television and radio stations to disseminate official propaganda.
As in the United States, redistricting is a political tool for determining the distribution of legislative representatives. But in Venezuela, it has also become a means of restricting competition. Last January, the Chávez-dominated National Electoral Council announced it would expand districts where support for the president is strongest and merge precincts favoring opponents into pro-Chávez zones. If that doesn't assure a victory for pro-Chávez candidates, then fraud conceivably could be an option through software manipulation in the regime's voting machines.
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The Castro regime's stunning announcement that it is planning to lay off more than 500,000 state workers in the next six months, dropping fully one-tenth of the country's labor force into a barely existent "private sector" has sparked a flurry of commentary on just what the move portends for the captive island's future.
Does it mean Cuba going capitalist? Are they importing the China model? Who's really in charge, Fidel or brother Raul? And, of course, that hardy perennial, whatever the announcement means, the U.S. should immediately lift the embargo and restore full diplomatic relations with the Castro regime (see here, here, and here).
On the latter, it is a measure of the investment so many have made into their opposition to U.S. policy that even as they cite the abysmal state of the Cuban economy as the central factor in forcing the regime's decision, they cannot recognize the significant role played by U.S. economic pressure in bringing that situation about. The embargo has indeed been pocked with holes in recent years, but two critical escape hatches for the Cuban economy -- U.S. tourist travel to Cuba and the extension of trade credits -- remain beyond the regime's grasp, and thankfully so.
In short, the decision on layoffs was dictated by the bankruptcy of the Cuban economy and the lack of prospects it will improve anytime soon. Desperate times call for desperate measures.
It thus defies logic to argue for any lessening of the pressure against a regime that has fought tooth and nail against any liberalizing reforms since the collapse of the USSR. Just as in the early 1990s, when the regime had its first go around with limited self-employment, as soon as the economy ticked up a few notches, the hammer came back down on those attempting to eke out an existence beyond state control.
Easing pressure now will only serve to halt in their tracks whatever steps the Castro brothers conjure next to try and reverse their declining fortunes. Policymakers need to remember that what drives this regime is survival, not appeasing the United States in the hopes of some policy concessions or allowing, out of some sort of beneficence, more freedoms for the Cuban people to better their lots.
So what do the layoffs mean, besides the fact that the regime is broke? The simple fact is we don't know, because we don't have any insight into the ruling clique's thoughts. It's probably safe to say they have no idea where they are going either.
What we can say with some degree of assurance is that the regime is taking a huge gamble in putting up to an eventual one million Cubans on the street to fend for themselves -- a gamble that could have serious repercussions for the regime's continued grip on power. That's because they are going to be extremely hard pressed to create any semblance of conditions where half a million or more Cuban workers are going to be able to find any employment on their own.
We need to remember that this regime consists of a dwindling cohort of dogmatic revolutionaries whose only accomplishment in life was to shoot their way into power fifty years ago and stay there. They no more understand market economics than they do Einstein's quantum theory of light.
Also, an important clarification for much of recent news reporting -- which has it that laid-off Cubans will be free to start "small businesses" -- is necessary. More accurately, they are micro-enterprises, an important distinction in order of magnitude. And the relatively few micro-enterprises that do exist -- a beautician here, a taxi driver there -- struggle to operate under such a mountain of regulations as to who they can hire, what and where they can sell, on how much they can earn (no one is allowed to become "too rich") as to make the whole effort practically fruitless. Many Cubans simply opt for the underground economy.
Be that as it may, the regime is going to have to figure out how it is going to deal with the social impact of a large group of idle Cuban workers unable to make a living honestly or dishonestly. It is a volatile mix that could lead to an upsurge in crime or other social agitation that could challenge the regime's internal security apparatus. Policy critics will likely argue just that point to justify a U.S. rapprochement with the Castros: that we need to help the regime achieve a "soft landing," as opposed to a descent into instability on the island.
But decisions on a soft versus hard landing in Cuba won't be made in Washington; they will be made in Havana. Those concerned about the latter ought to focus their lobbying efforts on the ruling clique there, not on policymakers in Washington. What is the appropriate role for Washington is to continue to close off all economic escape hatches for this obsolete regime and let it continue to face the consequences of its own misrule.
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Well, he's back. Four years after ceding power to younger brother Raul, Fidel Castro is re-commanding the spotlight inside Cuba and regaling witting foreign visitors with a series of provocative quotes that are causing headlines around the world. In other words, the regime's plan is working like a charm.
While Castro's return may be furrowing the brow of many a "Cubanologist," its meaning isn't hard to figure out: It is an act of desperation by a ruling clique unable to control a fast-moving chain of events and looking to shore up a wobbling regime facing unprecedented threats.
From the death of dissident Orlando Zapata Tamayo on a hunger strike (which sparked other hunger strikes by incarcerated human rights activists), to the courageous and undaunted Ladies in White weekly demonstrations in Havana, to desperately using the Catholic Church to broker the release of other jailed dissidents (which failed as a public relations ploy when the released were shipped off to exile in Spain), the brief reign of Raul Castro has been a fiasco for those vested in the regime.
Not only were events drawing heightened international scrutiny of human rights in Cuba, they were also emboldening Cuban dissidents to publicly challenge the very foundations of Cuba's police state like never before.
The hapless Raul also displayed a marked incapacity to institute any meaningful economic reforms to save the Cuban economy from its current tailspin. In addition, the hoped-for salvation -- that the Obama administration would open the gates to U.S. tourist travel to Cuba -- shows no sign of happening anytime soon.
All this, coupled with Castro's own return from death's door, compelled the return of the Old Man to set things "right." His return conveys a message to both domestic and foreign audiences. For the Cuban people, the sight of Castro alone bedecked again in his military fatigues is meant to cow them, embodying a simple message: give up any expectations that any changes are afoot in Cuba. Things are going right back to the way they were when he left power. There will be no freedoms, no hope, no future; time to go on home.
To the international audience, the message is one of diversion, an attempt to change the subject from the very negative (and deserved) narrative of the past year. The regime knew that international media coverage of Castro's return would step all over the activities of Cuba's dissidents and human rights activists. Throw in a spot of Castro dolphin-watching with a pair of credulous foreign guests and the ruse is complete. All is well, indeed.
It remains to be seen what impact the return of Fidel Castro will ultimately have in boosting the regime's declining fortunes. What is certain is that there is no shortage of outside actors willing to aid and abet this last gasp of the regime to hold things together. Fortunately, to date, this does not include the Obama administration, which has declined to play the role countless policy critics are attempting to assign it. It is good that they remember that Cuba's future lies with those Cubans advocating for something better for their countrymen; not with a fading wraith from a bygone era.
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When in a bind, Cuba's Castro brothers sometimes ease their repressive grip on the island's population. Case in point: during the current economic crunch, President Raúl Castro has released some two dozen political prisoners, revived a lapsed self-employment experiment, and allowed foreigners to lease land for 99 years. Impressive, except we've seen this movie before.
And to remove any doubt about its meaning, President Raúl Castro reportedly told his National Assembly that it does not signal a change in the 50-year-old anti-American police state. Which is why the United States should not significantly alter its equally long-lived trade embargo. The tougher it gets for the regime, the more likely that a few small freedoms will last longer -- hopefully until the two brothers go to the great commune in the sky.
It may be useful to remember that the harshest periods of the brothers' rule were when their coffers were flush and the revolution was strong. That's when the Soviet Union supported it with subsidies worth up to $6 billion a year as a regional arms trafficking and subversion hub. During that time, the regime reportedly held as many as 60,000 political prisoners, according to some estimates.
Yet in 1980, when outside help wasn't enough to pay the bills and thousands of Cubans took to the streets, then-president Fidel Castro allowed nearly 125,000 citizens -- some from prisons and mental hospitals -- a one-time good deal to flee to the United States. It was either appear magnanimous or lose control.
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For weeks now, the Obama administration has been leaking to reporters
its intention to modify U.S. travel regulations to Cuba. Reportedly, the administration will announce the policy change during the
current congressional recess to avoid political blowback (so much for the
courage of their convictions.)
As a policy matter, the move simply returns U.S. travel policy to that which existed under the Clinton administration, fostering "people-to-people" contacts by liberalizing categories of citizens' groups that can legally travel to Cuba. While religious, cultural, and artistic groups will now find it easier to visit Cuba, the changes most assuredly do not open Cuba up to unregulated tourist travel, which is the current Holy Grail of the noisy anti-embargo lobby.
In short, the new policy won't move the needle much on U.S.-Cuba relations or in Cuba itself. It won't translate into an economic windfall the Castro regime desperately needs nor are visits to Cuba by the American Ballet Theater likely to embolden ordinary Cubans to pressure for internal change anytime soon.
The biggest problem with the announcement is the timing is all wrong. Not only are any policy changes that could be construed as lessening the isolation of the Castro brothers' barbaric and unrepentant regime counter-productive at this point, they muddy the real issues at hand.
Shadow Government is a blog about U.S. foreign policy under the Obama administration, written by experienced policy makers from the loyal opposition and curated by Peter D. Feaver and William Inboden.