Book your flights to Cuba, because barriers and travel warnings are now down. For the first time in half a century tensions between the United States and the island off the coast of Florida, which stood as a dark power during the Cold War times on the side of Russia, have been eased.
U.S. President Barack Obama has called for a move to reestablish diplomatic ties with Cuba (Politico). The move and efforts have suddenly been made known to the public as Cuba released a long time U.S. hostage who had been held captive since 2009. Of course U.S. citizen’s lives are important, but what pushed such a big move for friendship after the release of one hostage?
“[Alan] Gross was convicted of espionage by a Cuban court in 2011 and sentenced to 15 years for bringing telecommunication devices into Cuba” (WREG Memphis).
In addition, the United States has released 3 Cuban spies.
Although seemingly sudden, the deals between U.S. and Cuban officials has been culminating over the past year. Obama calls the embargoes on Cuba to be a failure.
What this means:
Travel restrictions eased
Increased exports of U.S. goods to Cuba
U.S. travelers to bring in some items
Embassies will be opened in both countries
While only Congress can formally overturn the five decades-long embargo, the White House has some authorities to liberalize trade and travel to the island,” WREG Memphis.
With the petro dollar value falling, Russia loosing influence and Venezuela’s economy faltering in the midst of falling prices; some of Cuba’s main financial and export partners are withering at the core. It’s no wonder, if Cuba along with other countries is turning its eye to new partners. It’s not about the prices of oil, but petro politics and who’s producing it. The reality is the U.S. and Canada fracking and shale revolutions are changing dynamics. The global economy and relations are switching as can already be seen as almost a 50-year silence is being broken between two former rival countries.
Oil prices have hit a record low falling below $60 per barrel. Although for gasoline consumers the drop in prices are accompanied with happy bank accounts, other production sectors and countries are starting to feel the effects.
From oil fields in places like Texas to those in Saudi Arabia and Russia, along with extraction plants and businesses, are being affected by the fall in prices. Countries like Venezuela and Russia, whose economies greatly depend on oil extraction and exportation are some of the hardest hit as they try to maintain production quotas in the face of a saturated market.
“Russia’s rouble went into free-fall in Tuesday trading, falling repeatedly to hit record lows, despite the central bank’s dramatic decision to raise interest rates from 10.5% to 17%,” according to BBC.
Why are oil prices down?
The simple answer is that there is a surplus in the supply of oil, but a decreased demand for oil in the global market. This problem has been perpetuated by the exploration and the energy independence revolution in the United States and Canada. The extraction of shale oil in the United States has boomed and created alternative energy sources that are messing with the natural flow of oil trade (Boston Globe).
A couple months ago Argentine President Cristina Fernandez de Kirchner publicly endorsed Russia Today as an accountable and reliable source of news recommended to the Argentine public.
The close bonds between Kirchner and Putin forwarded the adoption of Russia Today in the country; Putin’s views being that the news site is one that is not biased like those news sources of “monopolistic countries,” aka the West, mainly the United States.
As the leftist movement in Latin America continues, Venezuelan President Nicolas Maduro this past week addressed the country that Russia Today is an excellent alternative news source. Venezuela is just another one of the Latin American countries, among Argentina and Nicaragua as examples, who have shifted away from U.S. relations turning to Russian partnership.
Group Twenty, known as the G20, is a summit held among the world’s economically developing elite. The forum is made up of the following 19 countries + the European Union: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, and the United States. Depending of the location of the summit per year, the residing president can invite guest countries if wanted.
“The G20 heads of government came into being in 2008 because economic catastrophe loomed, and the existing global governance organizations and institutions were unequal to the tasks at hand,” according to CIGI and its report on the future of the G20.
This year the 2014 G20 summit took place in Brisbane, Australia. As stated by the CIGI report, the G20 was started after the 2008 Financial Crisis. The forum has promoted economic stability and has helped to realign the economy in the right direction, by the means of collaboration and communication between world leaders.
“One of the key items on the G20 agenda is new transparency and beneficial ownership requirements that are aimed at fighting money laundering and the financing of terrorism. The requirements also support the OECD’s and G20’s efforts to prevent other serious offences such as tax crimes and corruption,” says The Sydney Morning Herald.
The G20 aims for sustainable growth and development, and since 2008 it has introduced $3 trillion of financial stimulus into its central bank system between the pact countries. G20 also (attempts to) tackle other issues that cause geopolitical friction, this year in Brisbane conflicts such as: the rising tensions between Russia and Ukraine and the looming threat in the Middle East will also be focused on.
“Well, Washington and its string of puppets did try to turn the G20 into a farce. Fortunately the adults in the room had some business to do,” reported Russia Today, satirically addressing the majority of the G20 as a “tiny bunch of Anglo-Saxon political buffoons [attempting] to drown out the Global South.”
In the Russia Today report, the work of the adults, or rather the “G5” BRICS nations, were reunite and discuss matters of real importance. As coined in 2001 by Goldman Sachs, “Building Better Global Economic BRICS,” the countries with rapidly emerging economies: Brazil, Russia, India, China and South Africa make up the BRICS power-pact. Matters such as the BRICS New Development Bank investments and a restructuring of the decrepit IMF were at the top of the list according to Brazilian President Dilma Rousseff.
In 2010, the IMF’s Board of Governors approved a reform that was key to increasing voting power of emerging markets, for example those of Latin America and BRICS nations for a more equal economic trading field, something that is worse for Republicans in Washington than even communism itself, says Russia Today. Putin confirmed that trade between Russia and China and the rest of Asia is planned to increase from 25 percent to 40 percent of Russia’s GDP (2096.78 billion USD).
Russia-China trade investment, which has increased in Latin America, is increasingly in rubles and yuan depreciating the U.S. dollar. For BRICS nations this trade is welcomed with fellow partner countries and companies. Brazil, under the reelection of President Dilma Rousseff, a leftist leaning president, is one of the main countries in Latin America shifting away from U.S. influence.
With the introduction of glasnost (openness) and perestroika (restructuring) under the rule of Mikhail Gorbachev, the cohesiveness of the USSR was splintered eventually leading to its demise in 1991. The USSR was then broken down into 14 independent republics and since then “has shifted its post-Soviet democratic ambitions in favor of a centralized
semi-authoritarian state in which the leadership seeks to legitimize its rule through managed national elections, populist appeals by President Putin, and continued economic growth,” according to the CIA World Factbook.
Although about 1.8 times the size of the United States, Russia is a region that only houses roughly a third of the U.S. population (143 million in comparison to a U.S. population of 316 million). The percentage of citizens that live in urban areas is whopping 73.8% as of 2011 according to the CIA WF.
Despite Russian predominance in world news, economically Russian industries are a failure, according to Texas A&M University professor of Russian, Brett Cooke. Following the fall of the USSR, which ended state-ruled enterprises, oligarchs seized these franchises. However, Russian industries never sufficiently adapted to the modern economy. Russia is comprised of a great expansive land mass, but because of its comparatively small population density, diversification of industrial growth has faltered. Today, Russia’s exports and economic wealth are reliant on the production oil related products.
“Russia produces oil, basically nothing else,” said Professor Cooke.
Professor Cooke proceeded to ask; why would Russia be importing agricultural products? Why from Latin America? According to the Observatory of Economic Complexity, Russia’s main imports aren’t even food related; the top imports consisting of goods such as: cars, packaged medicament, vehicle parts and computers.
The level of Russia’s food independence is stable, according to Tass, a Russian news agency. Russia’s main agricultural good is wheat. However, the country is lacking in other crucial food areas.
“…the level of self-sufficiency regarding certain types of dairy products (cheese, butter) was significantly below the required margin. Moreover, the figures of food independence concerning certain meat products, namely beef, were twice as low as the required margin.”
In recent times, Russian food security has been questionable due to Western sanctions implemented in August in response to the Crimea invasion; these sanctions have pushed Russia to realize its alienation. In the wake of these sanctions, Russia has doubled its imports of Argentinian beef (Global Meat News), while seeking out new strategic partners, which has been previously investigated in this blog.
Russia has allotted 1.5 trillion rubles ($42 billion) to invest in domestic agricultural production/development. Despite the investment, local producers are weary of the promise for greater production and efficiency within the country.
“It is extremely difficult to compete with foreign producers due to the investment factor in Russia, loans and infrastructure costs are much higher than in Europe and the U.S.,” said Artyom Belov, CEO of the National Association of Milk Producers, according to The Moscow Times.
This news from the agricultural sector only illustrates part of the problems facing Russia and the great depreciation of the ruble. Russia is seen as a dark illusive power, with an untouchable leader, Putin, at the head of the country whom steals the spot light and fills the tabloids of Western media. However, behind the Putin mask, the physically enormous country is vastly underpopulated and in a “time-freeze.”
Putin/Russia is painted by American media in three ways. Firstly, Russia is a country that reacts in a manner that is interpreted as it trying to maintain/regain influence over former Soviet spaces. Secondly, Russia wants to reemerge as a world power like during the Cold War times! And lastly, Putin reacts to the west in order to fight the spread of basic democratic/capitalistic ideals.
Recently with Putin’s visit to Latin America in July, the nation has shown that it is expanding beyond its former Soviet realm. Putin has sought to rekindle old flames while establishing new relations with countries such as Cuba, Nicaragua, Brasil, Argentina and Chile. During this “Latin American Tour,” Putin and his new presidential confidants discussed partnered development in sectors such as energy, education and trade.
Throughout the past century, countries such as Chile and Argentina received waves of fascists according to Professor Cooke. The first wave of fascist influenced Europeans landed in Argentina in the 1920’s. A reemergence of fascism later appeared with President Juan Peron in 1946.
In Chile, leaders such as Carlos Keller and Jorge Gonzalez Marees transitioned Chilean politics and took a position similar to that of Adolf Hitler in 1932. Later in 1938 the country’s growing fascist movement attempted a coup; it inevitably failed. Starting in 1974 the infamous regime of Augosto Pinochet controlled the country under what were argued to be fascist ideals until 1990.
Virtually all countries in Latin America have faced movements from the spectrum of socialism to communism. Today there has been a steady movement back to populist ideals, ideals of which President Putin is found of.
This shift of relations has been caused by many things. One of the root issues being that the United States and other western nations have acted as if Russia no longer matters, says Professor Cooke. This isolation and ostracization has caused Putin and the country to react.
There is a great contradiction within Russia itself. Why should Putin be the select? Putin with a 65% approval rate in his country, greatly over shadows the reality of his nation. Professor Cooke, who has been to Russia more times than countable, commented not only on the centralization of the population in the cities, but also the isolation of the people themselves.
“The country [due to its governmental policies] has developed a separateness…and its people are out of touch,” said Professor Cooke.
Cooke expressed how there is no checks and balances, the current government under Putin stifles growth and the opinions of those appear to be heavily influenced or intoxicated with western ideology are targeted. The country itself is moving in a fascist direction, Cooke said in a worried manner. It has recently started with bans on alcohol, to curfew times within the cities…all things that appear to be good for the people.
However, these policies have evolved into the banning of certain “alien groups.” The Putin administration has tried to dismantle one of the most prominent human rights groups in Russia known as the Memorial Human Rights group in Russia which has been threatened to be dismantled as it is an “alien agency.”
The statistics report that Putin is at a 65% approval rating, but this neglects the opinions of those who remain unheard. Article 80 of the Constitution of the Russian Federation states that,
“The President of the Russian Federation shall determine the guidelines of the internal and foreign policies of the State.”
Therefore, if Putin decides to ban western books from the country, arrest and condemn those who speak out against him or advocate for ideas that aren’t aligned with his political propaganda, he can rightfully create whatever policy he wants under the Russian constitution to silence these people.
Cooke compares the situation within the country to that of basic historical fascist leaders. Under Hitler the Autobahn was created and under Mussolini trains ran on time.
However, Cooke continues, “fascism is sloppy and mediocre.” It appears great at first until the efficiency of the system breaks down. Russia, like the situation of Germany before the rise of Hitler is feeling isolated and underestimated; inflation and violence have perpetuated the rise of fascism in the country.
The world sees the movements of Putin, but is ignorant to the realities of the country of which he represents.
“The alienation and sanctions have just started,” Cooke said.
Putin is represented on most propaganda of him riding shirtless on a bear is what inspires the Russian Putin followers and fuels the ideology of the power of the Russian nation. Russia perpetuates arms trade with the Middle East and has growing relations with China. However it is important to note the power switch of China in the globalized world.
China itself does not condone the intervention of one country into another country, case and point Russia’s seizure of Crimea. Power changes have happened in the past two decades with China moving to the top with the largest GDP in the world, however the Chinese dragon itself may not be as aggressive as once perceived.
Russia will continue to create allies and seek relations with new partners such as those in Latin America, but the contradiction between governmental actions and media hype compared to the actual socioeconomic situation of the country are questionable. Maybe Russia is not the great dark power it is presumed to be. As Cooke mentioned, the people self regulate. The Putin regime may be stifling the checks and balances system, but eventually something’s gotta give.
From the moment the barbed wire first went up, the barrier was a monument to the failure of the Soviet vision of a just society. Today pieces of the Berlin Wall are all over the world famed for its graffitied messages, the graffiti side of the wall being the western side, the free side, the one that already enjoyed freedom of expression.
On November 9, 1989, it was the other side of the roughcast concrete barrier that mattered, the side that people did not spray with aerosol cans but had risked their lives to climb over.The wall separated Berlin and metaphorically separated all of Germany. West Germany and East Germany were completely cut off, democracy vs. communism. On the Russian controlled East Germany territory, strict laws were implemented and human rights were ignored. It was as if most of the region was in a stand still without connection to the outside world.
The purpose of this blog is to analyze strategic relations and events within Latin America and increased communication with Russia and China, but monumental events such as the toppling of the Berlin Wall occasionally take priority. For this, the anniversary of the fall of the Berlin Wall is being written about and commemorated. The fall of the wall had a great effect on the whole world and its repercussions resounded to the lands of Latin America and changed the Soviet Union into the Russia seen today.
As the Wall came down, of course, the entire Soviet power structure – with its closed borders, economic oppression and mind-controls – started to fall with it. A welter of previously closed, moribund economies across Eastern Europe, the Former Soviet Union and Central Asia spluttered into life, enduring much hardship and uncertainty, yes, but clearly lurching forward,” said Telegraph writer Liam Halligan.
Regions of centrally-planned economies with almost complete abolishment of private property, where little happened without authoritarian approval, today pro-communist countries are seen with a cloud over them in question. During the Cold War, Latin America was a bystander region that in some areas, like Cuba, was a perfect docking point for the battle between democratic and communistic ideals. As seen in many Latin American countries, communist movements/guerrilla groups arose in the 80’s and 90’s for the rights and representation of the lower class.
Democracy triumphed from the fall of the Berlin Wall, however the battle between ideologies still lingers. Latin America continues to move to the left with ideologies such as populism. Most of these have sprouted from Russian allies and those hoping to supplant “the U.S. dollar as the global reserve currency” (Aljazeera).
“But it is in Latin America where populism has had the greatest and most enduring influence. As in Russia and the United States, it began as an attempt to ameliorate the social dislocations caused by capitalism. In Latin America it became an urban movement. Its heyday was from the 1920s to the 1960s, as industrialisation and the growth of cities got under way in the region. It was the means by which the urban masses—the middle and working classes—were brought into the political system” (The Economist).
Strategic relations have transformed since the fall of the wall, however it has also set a new world standard for the treatment of humans and the strive for liberty. Today the 25th anniversary of the fall of the Berlin Wall, the unification of Germany and freedom is celebrated.
Venezuela, the country with the largest oil reserves in the world, 9th largest producer of crude oil and an OPEC member, will now be importing oil for the first time.
PDVSA (Petroleos de Venezuela S.A.) is the Venezuelan state-owned oil and natural gas company importing the oil. According the International Business Times (IBT), PVSDA was expected to receive its first ever shipment of light crude oil from Algeria. With oil being the Venezuelan government’s largest source of income, the importation of oil is rather peculiar.
“Oil production has declined over the years, exacerbating the country’s problems with a limited foreign currency supply, and critics say mismanagement of PDVSA is largely to blame. Meanwhile, global oil prices have slipped by more than 25 percent since June,” reported IBT.
Venezuela produces different types of oils, but its main product is known as an extra heavy crude oil. In order to process this oil, a diluent is needed, this diluent normally being light crude oil. Venezuela had been buying alternate diluents, as their light and medium crude oil stocks fell. The most common alternate diluent they used is called naphtha, a distillation liquid comprised of hydrocarbons, has become expensive in recent years. PVSDA had begun to think about the importation of light crude oil in order to reduce the expenditures used on naphtha, necessary for the processing of their extra heavy crude oil.
“PDVSA in August put on hold its exports of diluted crude oil (DCO) made of heavy crude and naphtha to review its cost structure and avoid losses amidst an oil market worried because of falling crude prices,” according to Reuters.
Despite earlier this year commenting that importing oil would be a “last resort,” energy minister, Rafael Ramirez and Venezuela turned to Algeria, fellow OPEC member. The country put in a 2 million barrel order shipment that was expected to arrive at the end of October.
Imports from Chinese Oil Company Out Of Russian Urals
Algeria was not the only country that Venezuela turned to, Petrochina, a Chinese state owned oil and gas company, has become of a part of the importation mix as well. However, the gas in question that is being exported is being extracted and produced in Russia. The Russian cargoes will be the second imports into Venezuela; PVDSA bought two cargoes of Russian Urals light crude oil from a unit of Petrochina. The exported are being attributed to Russia however being extracted by a Chinese corporation, reported by Reuters.
According to the Venezuelan administration, PDVSA produces close to 3 million barrels a day, making it one of the world’s largest crude exporters. With such a dependent economy on oil extraction, production, and exportation the largest crude oil reserves country in the world will have to deal with production problems in the face of slipping global oil prices and civil unrest.
This blog is a platform for the investigation of the economic situations and governmental transitions within Latin America and how these factors have increased activities with unusual trading partners.