BRICS trample US in South America
By Pepe Escobar
May 23, 2015 "Information
Clearing House" - "RT"
- It started in April with a rash of deals between Argentina and Russia
during President Cristina Kirchner’s visit to Moscow.
And it continues with a $53 billion investment bang as Chinese
Premier Li Keqiang visits Brazil during the first stop of yet another South
American commercial offensive – complete with a sweet metaphor: Li riding on a
made in China subway train that will ply a new metro line in Rio de Janeiro
ahead of the 2016 Olympics.
Where is the US in all this? Nowhere; little by little, yet
inexorably, BRICS members China – and in a smaller measure, Russia - have been
no less than restructuring commerce and infrastructure all across Latin America.
Countless Chinese commercial missions have been plying these
shores non-stop, much as the US did between World War I and II. In a key meeting
in January with Latin American business leaders, President Xi Jinping promised
to channel $250 billion for infrastructure projects in the next 10 years.
Top infrastructure projects in Latin America are all being
financed by Chinese capital – except the Mariel port in Cuba, whose financing
comes from Brazil’s BNDES and whose operation will be managed by Singaporean
port operator PSA International Pte Ltd. Construction of the Nicaragua canal –
bigger, wider and deeper than Panama’s - started last year by a Hong Kong firm,
to be finished by 2019. Argentina, for its part, clinched a $4.7 billion Chinese
deal for the construction of two hydroelectric dams in Patagonia.
Among the 35 deals clinched during Li’s visit to Brazil, there
was financing worth $7 billion for Brazil's oil giant Petrobras; 22 Brazilian
Embraer commercial jets to be sold to Tianjin Airlines for $1.3 billion; and a
raft of agreements involving top iron ore producer Vale. Chinese investment
might go some way into overhauling Brazil’s appalling network of roads, railways
and ports; airports are in slightly better condition due to upgrades prior to
the World Cup last year.
The star of the whole show is undoubtedly the proposed $30
billion, 3,500 kilometer-long, Atlantic-Pacific mega-railway, that is slated to
run from the Brazilian port of Santos to the Peruvian Pacific port of Ilo via
Amazonia. Logistically, this is a must for Brazil, offering it a Pacific
gateway. Winners will inevitably be commodity producers – from iron ore to soya
beans - exporting to Asia, mostly China.
The Atlantic-Pacific railway may be an extremely complex
project – involving everything from environmental and land rights issues to,
crucially, the preference for Chinese firms every time Chinese banks deliberate
on extending lines of credit. But this time, it’s a go. The usual suspects are -
what else -
Watch the geopolitics
Official Brazilian policy, since the Lula years, has been to
attract top Chinese investment. China is Brazil's top trading partner since
2009; it used to be the US. The trend started with food production, now it moves
to investment in ports and railways, and the next stage will be technology
transfer. The BRICS New Development Bank and the China-led Asian Infrastructure
Investment Bank (AIIB), of which Brazil is a key founding member, will
definitely be part of the picture.
The problem is this massive trade/commerce BRICS interplay is
intersecting with a quite convoluted political process. The top three South
American powers - Brazil, Argentina and Venezuela, which also happen to be
Mercosur members – have been facing repeated “destabilization” attempts by the
usual suspects, who routinely denounce the foreign policy of Presidents Dilma
Rousseff, Cristina Kirchner and Nicolas Maduro and yearn for the good ol’ days
of a dependent relationship with Washington.
With different degrees of complexity – and internal strife -
Brasilia, Buenos Aires and Caracas are all simultaneously facing plots against
their institutional order. The usual suspects don’t even try to dissimulate
their near total diplomatic distance from the South American Top Three.
Venezuela, under US sanctions, is considered a threat to US
national security – something that does not even qualify as a bad joke. Kirchner
has been under relentless diplomatic assault – not to mention US vulture funds
targeting Argentina. And with Brasilia, relations are practically frozen since
September 2013, when Rousseff suspended a visit to Washington in response to the
NSA spying on Petrobras, and herself personally.
And that leads us to a crucial geostrategic issue – so far
NSA spying may have leaked sensitive information on purpose to
destabilize the Brazilian development agenda – which includes, in the case of
Petrobras, the exploration of the largest oil deposits (the pre-salt) found so
far in the young 21st century.
What is unraveling is so crucial because Brazil is the
second-biggest economy in the Americas (after the US); it is the biggest Latin
American commercial and financial power; it hosts the former second-biggest
development bank in the world, BNDES, now overtaken by the BRICS bank; and it
also hosts the biggest corporation in Latin America, Petrobras, also one of the
world’s top energy giants.
The hardcore pressure against Petrobras comes essentially from
US shareholders – who act like the proverbial vultures, bent on bleeding the
company and profit from it, allied with lobbyists who abhor Petrobras’s status
as the priority explorer of the pre-salt deposits.
In a nutshell, Brazil is the last great sovereign frontier
against unbounded hegemonic domination in the Americas. The Empire of Chaos had
to be annoyed.
Ride the continental wave
The constantly evolving strategic partnership of the BRICS
nations has been met by Washington circles not only with incredulity but fear.
It’s virtually impossible for Washington to do real damage to China – but much
“easier”, comparatively, in the case of Brazil or Russia. Even though
Washington’s wrath targets essentially China – which has dared to do deal after
deal in the former “America’s backyard”.
Once again, the Chinese strategy – as much as the Russian – is
to keep calm and carry a “win-win” profile. Xi Jinping met with Maduro in
January to do – what else – deals. He met with Cristina Kirchner in February to
do the same – just as speculators were about to unleash another attack against
the Argentine peso. Now there’s Li’s visit to South America.
Needless to say, trade between South America and China
continues to boom. Argentina exports food and soya beans; Brazil the same, plus
oil, minerals and timber; Colombia sells oil and minerals; Peru and Chile,
copper, and iron; Venezuela sells oil; Bolivia, minerals. China exports mostly
high-value-added manufactured products.
A key development to watch in the immediate future is the
Transul project, which was first proposed at a BRICS conference last year in
Rio. It boils down to a Brazil-China strategic alliance linking Brazilian
industrial development to partial outsourcing of metals to China; as the Chinese
increase their demand - they are building no less than 30 megalopolises up to
2030 – that will be met by Brazilian or Sino-Brazilian companies. Beijing has
finally given its seal of approval.
So the long-term Big Picture remains inexorable; BRICS and
South American nations – which converge in the Unasur (The Union of South
American Nations) – are betting on a multipolar world order, and a continental
process of independence.
It’s easy to see how that is oceans away from a Monroe
Pepe Escobar is the roving correspondent for Asia
Times/Hong Kong, an analyst for RT and TomDispatch.