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).
This past Thursday, October 9, 2014, Argentinian President Cristina Fernandez de Kircher and Russian President Vladimir Putin held a friendly video conference reaffirming their alliance.
The two not only spoke about their growingly warm relations, but as well about increased exports and imports between the two. Argentina has recently become one of the main economies that have been aiding Russia while their country faces sanctions from the European Union, the United States, Australia, Canada, and Norway.
Buenos Aires based newspaper, Clarin, wrote that two best export products in recent months have been beef and dairy products. In the first six months, Argentina has accumulated about 12.1 million tons of beef, about 75% more than the country had in 2013.
Argentine exports of dairy to Russia have grown about 43%; a 120% increase in cheese exports and 17% increase in butter, reported Clarin.
Besides these bilateral relations, people rejoiced in Argentina as “Russia Today,” a Russian news station will be the first international media in Argentina introduced in Spanish. That way, all the Argentinian citizens can stay updated with what is occurring in Russia, their country’s new found partner. According to Radio Free Europe,
State-run satellite channel “Russia Today,” a major platform for getting the Kremlin’s message to audiences abroad, has extended its reach with the inauguration of Spanish-language programming in Argentina.”
The video-conference almost seemed too good to be true, as Putin occasionally would wave to the Argentinian audience with a “warm smile.” Fernandez and Putin both agreed on the importance and “historic” event of the introduction of RT (Russia Today) into the Argentine community.
Strangely enough, both seemed to be in agreement with the corrupt media portrayals of Russia and of world events, which skew reality. Website La Rouche Pac commented,
Interrupted by frequent applause from the audience, which included a contingent of young, cheering supporters, the event allowed the two leaders to express their firm commitment to their strategic alliance and cooperation on issues of national and international importance, while also condemning the global media cartels that distort reality, “according to their own interests.” Putin stated that the right to information is “one of the inalienable rights and one of the most important human rights,” but that the development of the electronic and social media in recent years “has become a frightening weapon that manipulates social conscience.” There is a real desire, he said, for media that doesn’t impose its opinions, but, like RT, allows viewers to form their own opinions by presenting them with a variety of viewpoints.”’
Putin also reflected on his pleasant July visit to Argentina and drew back to the point, that both countries share very common interests and would like to fight for their national rights. Argentina has not only become a nation for resources, but newly found geopolitical support for Russia.
Brasil, with the world’s seventh largest economy and a total estimated GDP of $2.4 trillion according to Forbes, is holding their presidential elections today; October 5, 2014.
Original candidates running are incumbent President Dilma Rousseff, Brasilian Socialist Party Candidate Eduardo Campos, and Aecio Neves Brasilian economist and former president of the Brasilian Social Democracy Party. However in August 2014, the foreseen elections took an unfortunate turn.
The Brazilian Socialist Party candidate died when the private Cessna Citation in which he was traveling crashed into a residential area of the coastal city of Santos, about 35 miles south of São Paulo,” as reported by the Wall Street Journal.
Taking over Campos’s place was Marina Silva an environmentalist and politician is was a former member of the Workers Party (WP).
So why is this election so important to the global community? What does each candidate stand for and how does it effect the future of Brasil?
Electing a new president is an exciting thing, and this Sunday the new face (or the same) of Brasil is to be voted on. The ideologies of each candidate would represent something different for the country; in the wake of inequality protests, a fallen economy and scandal, the chosen leader will distinctly shape the future of the country and its reactions to outside relations.
President Rousseff, is the 36th incumbent president and the first woman to be president in Brasil. The daughter of a Bulgarian businessman, Rousseff grew up in the middle class and joined a socialist movement during her younger years, eventually leading to her arrest as she was apart of a Marxist Urban guerilla that fought against a military dictatorship.
In 2002 Rousseff began to work in the committee of energy and policy under former President Luiz Inacio Lula da Silva. From there in 2005 she became Minister of Energy working until 2010 when she stepped down to run for president and won.
Despite Rousseff’s radical roots, her ideology has changed drastically from Marxism to a pro-capitalist framework. Although from the get-go it was assumed Rousseff would be pro-privatization and neoliberalism, her policies and actions over privatization have been ambiguous. According to the New York Times,
The election has been followed closely throughout Latin America, with Ms. Rousseff’s government supporting leftist allies in Venezuela and Cuba. The campaigning has also fueled volatility in financial markets as big investors expressed anxiety over some of Ms. Rousseff‘s policies, which have expanded the influence of big state companies in the economy.”
A strong competitor to Rousseff, is Marina Silva, “the daughter of impoverished rubber tappers from the Amazon, ” as Reuters describes her in an article. Silva, of Portuguese and African descent, comes from a humbling background, that is relate-able to many regions and groups within Brasil.
Asked in an interview with Reuters last week what it would mean to be Brazil’s first black president, Silva replied: “Not just (that) … I’d also be the first environmentalist. I’m very proud of my identity as a black woman,” she continued. “But I don’t make political use of my faith, or my color. I’m going to govern for blacks, whites, (Asians), believers, non-believers, independent of their color or social conditions.”‘
Silva, as an environmentalist and winner of the Goldman Environmental Prize, plans to protect the amazon region and maintain other environmental stability projects. However, Silva is more conservative than expected as she has openly embraced large scale hydroelectricity projects and offshore oil development. According the The National Interest,
On foreign policy, Silva and her team have signaled that they would like to enhance Brazilian trade with the United States, and they have indicated that a Silva administration would pursue a more balanced foreign policy, which will delight Washington and spook both Caracas’ increasingly desperate government and the glacial, gerontocratic government.”
This is a very important point, as Rousseff was working with her allies of Venezuela and Cuba to move away from the United States and increase partnerships with China and Russia.
Silva also points out that mass deforestation has been the due to the policies and lack of protection under Rousseff, according to the New York Times. Silva wants to:
shift toward energy sources viewed as having less of an impact on the environment. With the Amazon gaining importance as a strategic pillar of Brazil’s economy — which is the largest in Latin America — the jump in deforestation has each candidate lashing out at the other.”
Last, but not least is candidate Aecio Neves, who introduced the idea of a “Management Shock.” Under this idea, a set of reforms would be implemented designed to bring the state budget under control by reducing government expenditure and promoting investment. Unfortunately, in the most competitive election since the reestablishment of democracy in Brasil in the 1980’s, the odds are not in the favor of Neves as he has about 1/5 voter support, according to Bloomberg News.
The chosen representative for the PSDB (Brasilian Social Democrat Party), many of Neves’s ideas align with Silva’s in slowing inflation to the target number of 4.5 percent and pledging to adopt stricter “fiscal discipline,” as sited by Bloomberg News.
Although Rousseff, the estimated leader in the polls, greatly attracts the working class and the majority of Brasil in-spite of the economic recession and a slowed economy, economic gains have been made to bring Brasil to where it is and the people will not forget that. What many have realized however, is
…that Rousseff has placed vanity projects, like hosting the 2014 World Cup and the 2016 Summer Olympics, over more fundamental issues like the cost of public transportation, health care and education.”
As said by The National Interest, prior to and in the wake of the 2014 World Cup, the Rousseff administration has seen widespread protests and fended off corrupt allegations.
It is without a doubt that Latin America is full of resources. Originally when the conquistadors, Hernan Cortes in Mexico and Francisco Pizarro in Peru, arrived in the 1500’s the mineral rich land was immediately exploited. However, the mineral jack pot is not the only resource that Latin America has had exploitation problems with; the regions make-up consists of vast ecological resources, flourishing marine life, agricultural hubs, and the petrodollar.
The Amazon region alone, located in north central South America, accounts for at least 10% of the world’s known biodiversity. The region itself extends across 6.7 million km, which is about twice the size of India, according to the World Wide Fund for Nature (WFF).
Just within the western part of Brasil, there are 3,500 different varieties of plants. 250 different fish species and 650 different types of birds, writes Arturo A. Fox, author of Latinoamerica: Presente y Pasado.
Brasil’s agricultural center also provides the United States with about 50% of its cattle/beef imports, 26% of Russia’s imports, and 9% of Hong Kong’s, reported Brazil Business. Argentina ranks behind Brasil and Australia in beef exportation.
As stated, Pizarro and Cortes originally built their empires of off the land’s mineral deposits. According to reports from 2004 by USGS (United States Geological Survey), Latin America, “is a major producer of mineral commodities like copper (53 percent of world production in 2004), silver (48 percent), zinc (30 percent), nickel (32 percent), molybdenum (43 percent), iron ore (29 percent), gold (21 percent), lead (18 percent), primary aluminum (17 percent), salt (19 percent), and manganese (12 percent).”
Chile as well produces about half of the world’s consumption of iodine, according to Fox.
Lately, however, the petrodollar has spoken the most over other resources, especially in Venezuela. A whopping 90% of Venezuela’s exports alone are its crude oil. Venezuela, being a member of OPEC (Organization of the Petroleum Exporting Countries), accounts for the highest percentage of crude oil reserves out of all of the OPEC countries, an estimated 24.7 percent as reported in 2013.
OPEC itself accounts for 81% of the world’s crude oil reserves, about 1,206 billion barrels.
Venezuela is not the only oil extraction country, companies like Mexico’s Pemex, Peruvian PetroPeru, Argentinian Bridas Corporation, Brasil’s Petrobras, Chile’s Empresa Nacional Del Petroleo, Colombian Ecopetral, and Urugauy’s ANCAP, are examples of progressively growing oil and exploration and productions companies within the region.
The Global Market benefits everyone, right?
Since the inception of these countries, there has been a big problem among government instability, resource management, and a growing globalized economy that eventually ensnared most of these countries into a dependent trend where they become reliant on their fixed export economies. Latin America is an example of a region cultivated and harvested for its resources, however not making sufficient income from the global market to actually stimulate growth from its exports within its countries.
The instability and weakness of the governments causes officials to give in to foreign investment, usually not fighting against the exploitation of their resources, let alone protecting the rights of their citizens. Shady back deals for personal gain between foreign companies and corrupt regional figure heads is normally how most of the work was and still is done in many parts of the region.
Due to market dependence, a term in 1995 was coined after the Mexican Economic Crisis, which inevitably affected international markets around the world. The term is, “el efecto tequila,” or rather “the tequila effect.”
The tequila effect, which became prevalent after the 1995 crisis, showed some of the dangers of such an intertwined global market. If one market went down, especially an economic powerhouse or supplier, like Mexico was to the United States, all the other economies would as well.
A Switch to Populism
After the 2008 Financial Crisis, those countries that didn’t get the picture the first couple times, realized the pain of a recession caused by the tequila effect.
Brasil under President Luiz Inacio Lula da Silva, was one of the first to come out of the 2008 Financial Crisis and slowly began a movement of privatization and populism.
Populist, or neo-populist experiences, have differed with neo-liberalism on the issue of state intervention and social inequality while also promoting non-pluralist forms of political engagement,” according to writers Fabian Bosoer and Federico Finchelstein ofQueries, a European progressive magazine.
Other leftist leaders like, Michelle Bachelet of Chile, Cristina Fernandez de Kircher of Argentina, Evo Morales of Bolivia, Tabare Vazquez of Uruguay and Alejandro Lugo of Paraguay, also began to implement a more populist privatization type system. The switch of various countries to a more leftist system in Latin America has still remained under a democratic scheme as of the 2000’s, but most leaders can permit the perpetuation of their own power under corrupt systems.
These new movements have even lead to rebellions against neoliberal reforms and against multinational corporations dedicated to the exploitation of natural resources, especially resources like petroleum and natural gas. Bosoer and Finchelstein also note,
In Latin America, populist movements have tended to combine authoritarian plebiscitary presidential leadership, elected by popular majorities, and a curtailment of political rights parallel to the expansion of social rights…As a whole, Latin Americans lived through the first grand crisis of neo-liberalism some ten to fifteen years ago and the result was that the region left neo-liberalism behind.”
Although some countries like Chile, with a new carbon tax, are making progress with privatization, most have rather began to create their own new partnerships, as has been seen in past articles with increased trade and aid between Russia and China and Latin America.
Argentina is an example of a country that is trying to turn away from U.S. debts and start anew.
Ironically under these new populist systems, recently Brasil and Argentina have both been in different stages of an economic recession.
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.