Why Bush’s Latin overtures may fall on deaf ears

Back in 2001, many Latin Americans harboured hopes that George W. Bush would give greater priority to a “backyard” that the US had often taken for granted. After all, the newly elected president was a former governor of Texas, a state bordering Mexico, he spoke a bit of Spanish and the “cowboy summit” at the ranch of Vicente Fox, then his Mexican counterpart, was the occasion for Mr Bush’s first official foreign visit. “Some look south and see problems. Not me; I look south and see opportunities and potential,” he had said on the eve of that meeting.

Then came the attacks of September 11 and more pressing concerns. The administration’s apparent indifference to Argentina’s financial collapse later that year, its bungled response a few months later to a Venezuelan coup and, above all, its invasion of Iraq made Mr Bush a deeply unpopular figure in the region.

Now it seems that Mr Bush is looking to make up for lost time. Six years after he took office, with his credibility south of the Rio Grande in tatters, the president embarks on Thursday on a week-long trip to Brazil, Uruguay, Colombia, Guatemala and Mexico that will easily be his longest official visit to the region. His aim is to re-establish confidence in the US at a time when the influence of Venezuela’s President Hugo Chávez, Mr Bush’s main opponent in the region and the architect of a new philosophy of “21st century socialism”, is on the rise.

Some of his agenda is predictable. Mr Bush will offer support to Colombia’s Álvaro Uribe – his most loyal ally in the two decade-long war on the illegal drugs trade – and will discuss with Mexico’s new centre-right President Felipe Calderón the prospect of a deal to legalise the status of the more than 6.5m Mexicans working illegally in the US.

But there will be new initiatives too. Mr Bush will talk with Brazil’s Luiz Inácio Lula da Silva about a subject of mutual enthusiasm: green fuel. Between them the US and Brazil produce 70 per cent of the world’s ethanol and Mr Bush hopes to lay the foundations for future co-operation on research and development. More surprisingly for a free-market Republican, he will introduce a series of initiatives designed to alleviate poverty, ranging from emergency medical care to financial support for cheap mortgages.

In a speech on Monday marked by positive references to the Alliance for Progress, the multi-billion-dollar social welfare and infrastructure plan for Latin America launched by John F. Kennedy in 1961 in the wake of the Cuban revolution, Mr Bush drew attention to the “terrible want” that affects nearly one-quarter of the region’s population. “Many children never finish grade school; many mothers never see a doctor. In an age of growing prosperity and abundance, this is a scandal – and it’s a challenge,” Mr Bush told his audience in Washington.

The president argued that poverty was leading some to question the value of democracy. Change to help the “working poor” was vital. “It is in our national interests, it is in the interest of the United States of America to help the people in democracies in our neighbourhood succeed,” he said.

All this marks the refinement of a policy long dominated by the triple priorities of free trade, border security and the fight against cocaine. “It has huge symbolic importance. It points to where hemispheric relations ought to be going,” says Julia Sweig, head of the Latin American programme at the Council on Foreign Relations in Washington. “We are seeing the hemisphere in a vastly different way to the way we have seen it before.”

So why the change in focus? In part, it simply reflects the growing sense in Washington that the US is losing influence in a region that it has claimed to dominate since the early part of the nineteenth century. US efforts to forge a Free Trade Area of the Americas have foundered. Meanwhile, while US trade and investment links with Mexico, Central America and the Caribbean have grown since the end of the cold war, parts of South America have been expanding elsewhere, especially in Asia. The mediocre returns from Washington-backed market-friendly reforms have further reduced US sway.

The two biggest countries in South America – Brazil and Argentina – have turned their backs on the prospect of free trade deals with the US and no longer rely on support from the Washington-based International Monetary Fund or other multilateral institutions. That autonomy has acquired particularly hard edges in Venezuela and a number of smaller countries, where a new breed of nationalist politicians – led by Mr Chávez – have championed a more radical politics explicitly opposed to US influence in the region.

Of late Mr Chávez, a former army officer first elected in 1998, has looked unstoppable. He has consolidated his political power through a series of victories at the polls, steadily centralising his grip over Venezuelan society and advancing his programme of heavy state spending, investment in health and education, radical institutional reform, nationalisation and co-operative enterprise. Within the last three months Mr Chávez has taken his country’s telecommunications and utilities companies into state ownership and will soon secure control over international joint ventures operating in the Orinoco oil belt.

With his supporters already controlling the judiciary and legislature, Mr Chávez has further weakened democratic checks and balances by winning the right to govern by decree. Powers to direct local spending projects are to be handed to new community councils – which Mr Chávez has described as Venezuela’s equivalent of the workers’ soviets of Bolshevik Russia. “All of the power to the Communal Councils, power to the people,” the Venezuelan leader said in a recent speech.

The sheer pace of radicalisation has surprised observers. “There is a delirious quality about it,” says Michael Shifter, of the Inter-American Dialogue in Washington and author of an new report on policy options for the US.

The shift leftwards at home has been accompanied by growing influence for Mr Chávez abroad. Three governments – Bolivia, Ecuador and Nicaragua, all elected in the past 15 months – are close allies of the Venezuelan leader, share his hostility to the US and are pursuing similar political and economic reforms.

Venezuelan economic support underpins its relations with all four key allies: Cuba, Ecuador, Bolivia and Nicaragua. A network of social programmes – many staffed by Cuban doctors and healthcare workers and paid for with Venezuelan oil money – have been extended to other countries not formally committed to this radical axis. Caracas sells oil on concessional terms to a number of poorer countries in the region and it has also become one of Argentina’s biggest creditors, having bought more than $4bn of its bonds.

More worryingly for Washington, Mr Chávez and his allies have been noisy supporters of US enemies elsewhere in the world, notably defending Iran’s right to develop nuclear energy. Other members of the radical axis are happy to link up with Iran, which sent a 75-strong delegation to the inauguration of President Rafael Correa in Ecuador.

A weapons build-up is another concern. In recent testimony to Congress, an official from the US defence intelligence agency pointed to the purchase by Mr Chávez since 2005 of fighter aircraft and thousands of assault rifles from Russia. “Chávez is really making inroads. The Americans are losing ground,” says Jorge Casteñeda, a Mexican political scientist and former foreign minister.

Yet the US still has many things going for it. The rise of radicals such as Bolivia’s Evo Morales, the continent’s first indigenous president, or the re-emergence of Daniel Ortega, the 1970s Nicaraguan guerrilla leader, may be eye-catching. But the real story of the 11 elections in the region over the past year or so is the gains made by moderates of left or right, especially in the bigger countries. At the same time, many question the economic sustainability of the Chávez project, which depends heavily on high oil prices.

“Nothing that governments like Brazil or Mexico are doing is antithetical to US interests,” says Walter Russell Mead, a historian who has written on US foreign policy. Moreover, although the Bush administration is unpopular, many Latin Americans – especially in the north of the region – still aspire to US consumer values and dream of living in the north. “It is a case of ‘Yanqui go home but take me with you’,” says Mr Mead.

Mr Bush’s trip and new plans seemed designed to strengthen relations with this camp and undermine the appeal of Chavista radicalism in poorer countries. The primary healthcare being offered to the poor of Central America and the Caribbean, for example, counters the undoubted popularity of the social policies being developed by Venezuela and Cuba. The energy initiative simultaneously seeks to strengthen relations with the centre-left government of Mr Lula da Silva and help countries such as Guatemala and Honduras eventually reduce their dependence on imported oil.

But critics argue that the effort is too little, too late. While Mr Chávez and his Cuban allies have established a permanent network of clinics in poor areas of Venezuela and Bolivia, the US response has the feel of a one-off emergency effort. Primary healthcare is to be offered to 85,000 from a US naval ship that will stop off in the ports of 11 poorer countries, a gesture – as one Brazilian commentator noted – more in keeping with the 1940s.

The Overseas Private Investment Corporation, the government agency that guarantees US investment abroad, is to increase funding for cheap mortgages for the working class, but even then the amount available amounts to less than $400m. In a scathing editorial, O Estado de S. Paulo, a Brazilian daily, labelled the initiative “mean”, “anachronistic” and “totally out of touch”.

Limited ambition could also undermine the green fuels initiative. All told, initial funding – including contributions from the US and Brazil, as well as the multilateral banks – is likely to be less than $25m. There are as yet no plans to reduce a hefty tariff of 54 cents per gallon charged by the US on imported ethanol, nor the 51 cent a gallon subsidy for producers. Frustrated, one congressional critic, an aide from Mr Bush’s own Republican party, says the scheme “completely ignores the transformational potential. This policy could help rehabilitate the US in the eyes of Latin Americans”.

Such is the scale of Latin American disillusionment that it seems much more attention and money may be needed to turn the tide in Washington’s favour. Some sceptics think the tour could turn into a public relations disaster on the scale of Richard Nixon’s 1958 visit, when the then vice-president’s entourage was stoned by protesters in Caracas. At the very least, Mr Bush risks being upstaged by Mr Chávez, who travels to Argentina this week to head a march of anti-Bush demonstrators.

The reality is that the US may need to do much more to regain the standing it once had. Marta Lagos, whose Latinobarómetro polls have recorded a steady decline in US influence in recent years, says that even in countries such as Chile – a model of market reform that signed a free trade agreement with the US in 2003 – people are “sore”.

“It is good he isn’t coming here,” says Ms Lagos. “He would get an icy reception.”

Additional reporting by Jonathan Wheatley