Russia’s Latin American Adventures Cause Concern in Europe

There have been reports that the European Commission is currently circulating a white paper among member states, urging the EU to take action against Russia’s rapidly increasing military and energy links to Latin America. Although some have commented on Russia’s involvement in the region, I am greatly relieved to see that this important issue is finally getting attention at the governmental level. The Kremlin has clearly demonstrated its interest in rebuilding relations with Latin American nations to a Cold War level. On the energy side, we are seeing Moscow engaged in talks to help build the “Hugoducto” – a gas pipeline that would connect Venezuela, Brazil, Bolivia, Argentina, and Uruguay. LUKoil and Gazprom have gone on a spending spree to grab up licenses in the Orinoco Basin, while at the same time energy nationalizations in Bolivia and Ecuador are creating more resource autocrats. On the military side, Russia recently completed a major $3 billion arms deal with Venezuela, delivering fighter jets and helicopters to the stridently anti-American Hugo Chavez, and is in conversations for several other big business transactions. Russia’s close relationships with Venezuela, and Hugo Chavez in particular, have changed dramatically in recent years while at the same time U.S. influence in the region is waning. In an article titled “The Putin-Chavez Partnership“, Mark N. Katz of George Mason University explains how the dynamic between the two presidents changed:

The atmospherics of the third Chavez visit to Moscow were very different from those of his second visit in October 2001 or Kasyanov’s to Caracas in December 2001. Putin had been emphasizing partnership with the United States in the twelve months following the 9/11 attacks, and so Moscow was not very receptive to Chavez’s anti-American rhetoric. However, by the time of Chavez’s November 2004 visit, several events had soured Russian-American relations, including the U.S.-led intervention in Iraq, the Rose Revolution in Georgia, and the Orange Revolution in Ukraine (both of which Moscow considered to have been orchestrated by Washington). With the Orange Revolution actually in progress during Chavez’s third visit, his anti-American rhetoric was very much in accord with the viewpoint of the Putin administration. (Chavez himself had only recently, in August 2004, won a majority of votes in a recall election. While many of his opponents claimed that Chavez had rigged the election the Russian Foreign Ministry issued a statement declaring it legitimate.)

By July of 2006, both leaders made their intentions very clear during an official Moscow visit. Hugo Chavez said the following:

“I consider our cooperation in the energy sector to be of primary importance. We examined issues linked to developing cooperation between major Russian and Venezuelan companies. We were very glad to acknowledge that firms such as Lukoil and Gazprom are already working in Venezuela and will soon start to develop deposits located both in the sea and on land. I think that this is one of today’s best results and a very important step forward in developing our bilateral relations. Mr President, you know, and all of Russia must know, that oil reserves in Venezuela continue to grow. And as we continue prospecting and drilling our oil stocks are doubling. We can take the stocks around the Orinoco River as an example; there, our oil reserves are estimated at approximately 270 billion barrels. This will make Venezuela the OPEC country with the world’s largest oil reserves, since our reserves will even be greater than Saudi Arabia’s. And we are glad to reveal that Lukoil and all of its experience, technology and determination, will work in the region surrounding the Orinoco River.”

At the same press conference, Vladimir Putin issued these comments:

“Certainly, the oil and gas sectors are the most promising and interesting branches in which we cooperate. And I am very pleased to note that our leading companies are making their first steps onto the Venezuelan market. At the same time our interaction is not limited to the energy sector. The financial and investment sectors, engineering, the mining industry, the metallurgical industry, the chemical industry, transport and, of course, military and technological cooperation are all promising spheres.”

According to Peter DeShazo of the Centre for Strategic and International Studies, “Chávez is looking for support and business deals from countries that he sees as rivals or adversaries of the US. Clearly he sees things in Cold War terms.” Russia’s relations with Latin America must be watched very closely for several reasons. At the very best, Russia’s interest in the region simply reflects their newfound willingness to flex their energy muscle, and engage in an activist foreign policy as part of a bid to consolidate their role in a new multi-polar international system. At the very worst, we could be witnessing the first stages of a plan to manipulate Venezuela’s oil and gas exports to the United States by diverting supplies, taking over their market share with LNG, and further tighten their grip on global energy markets. The report notes that Russia’s presence is still relatively small, so the time to act is now. It is also to be noted that this relationship is opportunistic for both leaders, and subject to change without notice. What is fundamental is the relative impotence of the United States to influence this relationship over an area geographically central to what has always been presumed up until now to be the primary sphere of US influence of world affairs. It is this loss of the ability of Washington to project meaningful leverage that should be of the most concern.