Obama and Latin America

Rebecca Bartel
Current Policy Analyst and Educator for Latin America and the Caribbean with Mennonite Central Committee.


The feeling among many partners in Latin America is generally very positive in response to the historical victory of President Elect Barack Obama in last week’s elections.

In his first official effort at stating a position on Latin America last May, Sen. Obama’s speech, “Renewing US leadership in the Americas” framed his positions on policy and relationship towards Latin America referring to Franklin D. Roosevelt’s “four freedoms” speech of 1941. This was the vision FDR articulated for a new world order – prior to US engagement in the Second World War – based on 4 basic freedoms: political freedom, religious freedom, freedom from want, and freedom from fear .

That same day, after meeting with the conservative Cuban-American National Foundation, the Obama campaign released “A New Partnership for the Americas” plan, which outlines three major regional policy issues that his administration would tackle if elected to office: (1) political freedom/democracy, (2) freedom from fear/security, and (3) freedom from want/opportunity. As Larry Birns, director of the Council on Hemispheric Affairs states, “According to Obama, the strengthening of democracy will at its core address the protection of human rights, as well as support the rejection of de facto coups and autocratic practices. The U.S. will foster democratic institutions by strengthening democracy at home – habeas corpus will be restored, Guantanamo Bay will be closed, and torture and indefinite detention will end”.

Analysts note the particular speech and policy Sen. Obama referred to, which preceded FDR’s “Good Neighbour” policy, paved the way for the most harmonious era in Latin America–U.S. relations during the 1930’s. The Good Neighbour Policy is a framework that should be re-visited and there is hope in the region, from academics and think tanks, that this would be the model of relationship and diplomacy that the Obama administration will adopt.

However, there is some concern that the Obama presidency will maintain a “business as usual” style of policy towards the region.

For example, although Obama has made reference to the possibility of lifting restrictions on travel for Cuban-Americans and freeing up the process of Cubans in the US sending remittances to families in Cuba, he has maintained the position of holding the embargo as it stands in order to encourage democratic transition and institutionalization. In reference to Venezuela’s President Hugo Chávez, Sen. Obama has used strong language, partly in order to separate his campaign from Chávez’s populist government, and has again referred to encouraging democracy through “aggressive diplomacy”.

Obama has stated that the foci for security policy should be transnational gangs, drugs, violence and organized crime. He has proposed strengthening security efforts of the United States in Central America, and approves the extension and continuation of the newly implemented “Mérida Initiative” – a multi million dollar military aid package largely to be Mexico and small sum to Central America. Obama supports regional efforts to combat violence and transnational drug trafficking and organized crime, and has also stated his support of continuing military aid to Colombia to combat narcotrafficking. In addition, Obama stated his concurrence with the Colombian military’s decision to attack FARC insurgents on Ecuadorian soil stating that, “Colombia has a right to strike terrorists who seek safe-haven across its borders.”

Looking towards the future
Nonetheless, Obama’s victory is clearly a positive sign for Latin America, and certainly is a hopeful move from the Bush administration’s strategies of increased military aid to respond to social and political conflict, failed drug eradication programs and interventionist counter-terrorism tactics. These tactics and failed policies have served to create more hostility towards the United States in the region and have not responded to the great social and economic strife that millions of people in Latin America face.

Obama’s conviction that a new US-Latin America relationship must be forged and new US policy towards Latin America must be built, is welcome. Time will test the new President elect’s positions in practice towards the region, but the opportunity is ripe for creative and new relationship building..
Obama’s fresh ideas around economic development, increasing U.S. foreign aid, vocational training, micro-finance, and community development may prove to be effective strategies for poverty reduction, job creation and stimulating local economies. As analyst Birns says, “He will attempt to achieve the Millennium Development Goals, will work to decrease the prevalence of HIV/AIDS, tuberculosis, and malaria, and increase global education. He will cancel the debts of Paraguay, Guyana, St. Lucia, Bolivia, Haiti, and Honduras, as well as those of other countries around the world which have been designated as “heavily-indebted poor countries.” Obama will seek to reform the IMF and World Bank, and establish fair trade that promotes labor and environmental standards. In addition, the WTO will be encouraged to enforce mutually advantageous trade agreements. Obama opposed CAFTA and a U.S.-Colombia FTA, and will seek to amend the provisions of NAFTA to increase its benefits for American workers.” These are interesting proposals, and will be challenged from all sides by special-interest lobbies in congress, corporate America and Latin America, and potentially Obama’s own party. Lest it be forgotten that NAFTA was negotiated and implemented by a democrat government, as was Plan Colombia.
Although Obama and running mate Joe Biden, have made such overtures to Latin America as a region, in addition to large promises for re-charged relationships and leadership in the region, they have specifically cited countries already closely allied with the United States, such as Colombia, Mexico and Brazil – committing to continuing military aid packages to the first two, and opening up markets for bio-fuel sales for the latter.

Country by country: What leaders are saying.
In Bolivia, the Evo Morales administration voiced their hope that “Obama will reverse the Bush administration's anticipated suspension of trade preferences that allowed more than $150 million in Bolivian goods into the U.S. without being charged import taxes last year”. Morales affirmed hope that relations would improve with the United States expressing his confidence that relations will be healthier with Obama in the White House.

Obama has stated that he intends to cancel Bolivia’s foreign debt, however it is not clear whether or not Obama will be willing to renegotiate the inclusion of Bolivia in the ATPDEA (Andean Trade Promotion and Drug Eradication Act).

The Venezuelan government suggested that Obama's win was the culmination of a wave of leftist electoral victories that started in South America nearly three years ago, saying “the historical election of an afro-descendent to the head of the most powerful nation in the world is the symptom of an era of change which has been brewing in South America and could be knocking on the doors of the United States”.

In a televised speech on Sunday, November 9, Chávez announced that he would be open to meeting with Obama in “conditions of equality and respect” and that he hoped with Obama a “new phase of relations”.

Obama has been widely critical of Hugo Chavez’s government and manner of governing, stating that “Venezuela’s President Hugo Chavez has increased his anti-U.S. rhetoric and tried to counter American influence throughout Latin America. Some commentators fear that Chavez threatens oil markets and regional stability. Barack Obama believes the U.S. must restore its traditional leadership in the region – on democracy, trade and development, energy and immigration. This will tamp down the anti- Americanism that has sprung up in opposition to the Bush administration’s global policies and lack of engagement in Latin America”.

The Mexican government expressed its support of the new president elect, stating that the “government will maintain close relations with Obama’s transitional team to engage in dialogue at all levels of government around issues of migration and the Mérida Initiative”, affirmed Foreign Minister, Patricia Espinosa. Espinosa also stated that Mexican president, Felipe Calderón, seeks a meeting with Obama as soon as possible given that “what unites (the two countries) is much greater and more important than a long border”.
She also stated that “what unites us, above all, is the need to make North America a region in which we are strengthened economically and our two countries must work together to build societies that are not only more prosperous but also more just”.
While Obama has stated his intention of reforming immigration policy in the United States, through creating legal avenues for undocumented immigrants to seek citizenship and legalization, he has indicated his administration plans to continue and expand the military aid package known as the “Mérida Initiative” to Mexico and Central America, in addition to the building of the wall and increased border security. In his “A new Partnership for the Americas”, it is stated,

“Border violence and the trafficking of guns and stolen vehicles along the U.S. - Mexico border remains a critical crime and homeland security challenge for the U.S. To combat this increasing problem, the United States forged a new security cooperation initiative with Mexico and nations in Central America. The Merida Initiative is designed to combat the threats of drug trafficking, transnational crime and terrorism in the Western Hemisphere. Barack Obama believes that a new security initiative is needed with Latin American neighbors – an initiative that extends beyond Central America. This initiative will foster cooperation within the region to combat gangs, trafficking and violent criminal activity. And it will marshal the resources of the United States to support the development of independent and competent police and judicial institutions in the Americas.”
Daniel Ortega in Nicaragua expressed his congratulations to Obama, classifying the presidential elections as historical. Ortega stated that “it is truly a miracle that the United States has an African American president for the first time in its history” and that the new president elect is “the symbol of the immigrant that has arrived to the United States and had children there” after recognizing Obama’s African roots .
Álvaro Colom of Guatemala congratulated the new president elect saying that he, the government and the Guatemalan people, “hoped that the new government would create more humane and respectful conditions for the treatment of the thousands of Guatemalan immigrants that, without a doubt, play and important role in the economy and the progress of the United States” .
Brazilian Foreign Minister Celso Amorim compared Obama's victory to that of President Luiz Inacio Lula da Silva, a former leftist union activist known as Brazil's first leader to come from working-class roots.
"In the case of Lula, hope overcame fear," Amorim said. "In the case of Obama, hope overcame prejudice."
Obama has been clear in his intention to relax import quotas on Brazilian ethanol exports to the United States, saying that his administration is interested in creating a bigger market for Brazilian ethanol and will eliminate the 7% limit that is currently in place through the Caribbean Basin Initiative. At the same time, Obama has voiced concern around environmental degradation, particularly in the Amazon region and the risks of deforestation which accompany greater agricultural production. Obama has stated that his administration would support alternative energy and offer incentives to maintain forests and natural reserves.
Colombian President, Álvaro Uribe also congratulated the new leader, stating that Colombia’s hopes for the ratification of a Free Trade Agreement which has been stalled by the democratic Congress earlier in the year would be realized. Obama has been very firm on the free Trade Agreement, stating that consistent and systematic violations of human rights by the military, and the worsening situation with union leader assassination for which the government has not responded adequately, in addition to the para-politics scandal, are factors which his administration will not overlook and the chance of the FTA being signed without significant modifications is increasingly unlikely.
Despite his strong position on the FTA, together with Vice-President elect Joe Biden’s rejection of the deal and Biden’s consistent record of questioning this sort of bilateral trade agreement, Obama has voiced his support for continued military aid to Colombia – although there is hope that an Obama administration will be open to hearing from Colombian human rights organizations and Washington-based NGOs, and heed their call to decrease military aid and increase humanitarian aid. According to Birns, “In 2007, he (Obama) also had sent a letter to Secretary of State Condoleezza Rice stating that the U.S. must balance its military aid to Colombia with social and economic reforms. Nevertheless, four recent letters (two to Secretary of State Condoleezza Rice, one to then-Undersecretary of State Nicholas Burns, and one to President Uribe himself) regarding human rights abuses in Colombia lacked his endorsement”.
Obama has also stated his understanding and justification of the Colombian military’s attack on Ecuadorian soil during the raid in March of FARC Secretariat members Raúl Reyes’ camp.

“The U.S. and Colombia have many important shared interests. For more than 8 years, the U.S. has provided roughly $700 million a year to fight drug trafficking. We need to continue efforts to support Colombia in a way that also advances our interests and is true to our values. We must support the creation and reinforcement of robust civilian institutions in Colombia that contribute to lasting peace and to ending the decades-long reign of terror perpetrated against the Colombian people by illegal armed groups of every stripe. Given the devastating impact the drug trade has on the U.S. and Columbia (sic), we must continue to do more to work to reduce the drug trade. Barack Obama supports continuing the Andean Counterdrug Program to the U.S. strategy to combat narco-trafficking in Colombia. He will enhance the program and broaden the involvement of Colombians, while reducing its reliance on American contractors…In an Obama administration, we will support Colombia’s right to strike terrorists who seek safe-haven across its borders, to defend itself against FARC and we will address any support for the FARC that comes from members of neighboring governments because this behavior must be exposed to international condemnation and regional isolation”.

Some conclusions
It is safe to say that President Elect Obama’s victory presents a symbolic triumph that is encouraging and hopeful for the world. It is also safe to say that the majority of Latin America’s “vote” was for an Obama-Biden win.

Concern remains, however, that the new “leadership” model is not what Latin America needs. Rather, as Eduardo Galeano says, what the region needs is a new “mutual respect” model that guarantees autonomy and sovereignty in domestic decisions. Partners have expressed interest in a new model of respect that would re-negotiate un-just trade agreements, such as NAFTA and CAFTA, and close the School of the Americas military training facility and Guantanamo Bay detention center unconditionally. A new model would also cut military aid to the region and increase humanitarian aid, seeking to resolve root problems of social and political conflict through democratic institutions, instead of suppressing civil resistance through violence. This new model would re-think unjust immigration policies and instead create policies of respect and dignity for the 12 million Latin America immigrants living in the Unites States currently.

There is also concern that the renewed leadership and relationships would be only extended to countries already allied with US interests, such as Colombia, Brazil and Mexico and exclude, or maintain current relations, with countries whose current governments do not reflect US interests in the region.

While Obama is learning about Latin America, and preparing to countermand executive decisions of the Bush administration and bring significant changes to Washington, the moment for re-thinking US-Latin American relations has arrived, and none too soon.

Analysts have made mention of the significant symbolic importance that the results of the election have had, and there is widespread hope in the region that the significance will go beyond symbolism, and translate into real change for US-Latin America relationships in the region.

Obama’s policy towards the region will be different from the prior 8 years of the Bush administration, this is clear. The definitive official position and policies towards Latin America have yet to be seen. With the policy outline “A New Partnership for the Americas” and the speeches given during the campaign, it is possible that Obama will reflect a Clinton era style of Latin America relations.

Obama is in the position and in the historical moment to drastically change U.S.–Latin America relations for the better, and bring a much needed break from past, failed policies. Hopefully he will respect the call of numerous Latin American leaders, and peoples, to enter into a new era of politics, based on mutual respect, autonomy and sovereignty, fair trade policies and increased equality in decision making and distribution of the wealth of resources in Latin America.

To send Barack Obama your personalized request that US policy towards Latin America changes dramatically, click here for a sample letter from Witness for Peace. [http://org2.democracyinaction.org/o/5436/t/2467/petition.jsp?petition_KEY=163]

What Does Africa Owe?

An excellent article by Neil Watkins, head of Jubilee USA Network, on the debt in Africa and asks who is responsible for it? Who should pay? How much should Africa pay? At the bottom, click on the box to read and download a Word.doc version of the same article.

Neil Watkins | February 18, 2008
Editor: John Feffer

As President Bush embarks on his journey to Africa, he is looking to secure his legacy in part through his administration’s development initiatives on the continent. One of those initiatives is the administration’s support for expanded debt relief for the continent.
A closer look at this administration’s record on debt should begin with the question often posed by Africa-based civil society groups: who owes whom?

Canceling Debt
Take the case of the Democratic Republic of Congo (DRC). The United States, the World Bank and IMF, and other creditors lent former President Mobutu Sese Seko billions of dollars in the 1970s and 1980s, knowing full well that the funds would not benefit the people. This was a price they were willing to pay in the context of the Cold War to win the country’s allegiance to the West. But this clearly odious and illegitimate debt remains on the books today – over $9 billion worth in fact, and the people of the DRC are still paying for the sins of a leader they didn’t want.

The Bush administration has supported debt cancellation in Africa. Does Africa owe President Bush a debt of gratitude? In 2005, the Bush administration, together with the UK, took strong leadership at the G-8 summit in Gleneagles, Scotland and agreed to provide the possibility of 100% debt stock cancellation of eligible debts to eligible countries. This was important because up until this point, only debt relief – reduction of payments – rather than outright cancellation, was possible.
The initiative championed by the Bush administration has since become known as the Multilateral Debt Relief Initiative (MDRI). Under this program, 23 countries have received 100% cancellation of eligible debts, 19 of them in Africa. Another 20 countries are potentially eligible for the program but have not yet seen their debts cancelled. When previous rounds of debt cancellation are added in, eligible nations are saving about $2 billion in debt payments each year.

The money saved from debt relief has been put to good use. Of the five countries President Bush will visit on his trip, four – Benin, Tanzania, Rwanda, and Ghana – have received debt cancellation under the MDRI. In Tanzania, debt relief led to a 50% increase in primary school enrollment. In Ghana, freed-up funds supported the rehabilitation of essential major highways and feeder roads in the main agricultural areas, and to support education and health initiatives. In Benin, relief bolstered investment in health and education and funded small-holder projects in agriculture.
The other country President Bush will visit on his trip – Liberia – just recently moved toward eligibility for the official IMF/World Bank debt relief program with the strong support of the administration. But Liberia has not yet seen its more than $3.5 billion debt – much of it run up by the human-rights-abusing regimes of Samuel Doe and Charles Taylor – cancelled outright.

What’s Still Missing
The Bush Administration has clearly provided leadership on debt relief that has benefited a number of African countries. But President Bush could do even more. He could return from Africa – inspired by seeing firsthand the impact of relief to date – and address the unfinished agenda on debt, in turn cementing his legacy in this area.

He should support the expansion of debt cancellation to all countries that need it to reach global poverty-reducing goals. This would include countries devastated by HIV/AIDS – such as Lesotho – that have not been included in agreements for debt cancellation to date.

Second, Bush should put an end to the unconscionable practices of “vulture funds.” Vulture funds are private creditors that buy up distressed developing country debt on the secondary markets, then refuse to join other creditors in the debt relief process and instead sue poor country governments for a big mark-up. Last year, Zambia had to pay $15 million to Donegal International, a vulture fund that originally paid $3 million for the debt. The president should support changes to U.S. law that would make profiteering by vulture funds illegal. While that work is underway, he could immediately reach out to non-Paris Club creditors in the U.S. sphere of influence and urge them to sign onto a new Paris Club agreement that commits creditors not to sell claims on the secondary market.

Another problem facing Africa now is a rapid re-accumulation of debts, including massive new lending from China. The administration’s plan to address this problem has focused on an IMF/World Bank framework that punishes debtors by hardening the terms of soft loans they get from the World Bank if they borrow too much. But this approach is likely to only worsen the problem and punishes poor countries without addressing creditor co-responsibility for the problem. Only a strong, binding international system for responsible lending and sovereign debt restructuring, which holds creditors and debtors responsible, can ensure debt sustainability in the future.

Finally, to answer the question of who owes whom, the United States and international financial institutions including the IMF and World Bank should audit past lending in Africa. Such an audit should look at which debts are odious, onerous, or illegal. Having this information will help us learn lessons from the past and avoid the same mistakes in the future.
To enhance his legacy in this area, President Bush could announce his support for the bi-partisan Jubilee Act for Responsible Lending (S. 2166 / H. 2634). This bill, currently pending in Congress, addresses many of the elements of the unfinished agenda on debt.

Neil Watkins is National Coordinator of Jubilee USA Network, an alliance of religious organizations, development agencies, and human rights groups working for debt cancellation and responsible lending for impoverished nations

What Does Africa Owe
Get your own at Scribd or explore others:

Global Crisis -- Made in America

By Joseph E. Stiglitz
Spiegel on line
November 12, 2008


It should come as no surprise in a world of
globalization that it's not just the good things that
move more easily across borders, but the bad things as
well. Now, America has exported its downturn to the

A global financial crisis requires a global solution.
Uncoordinated macro-economic policies, for instance,
have contributed to Europe's problems. When the
European Central Bank refused to lower interest rates
earlier this year, focused as it was on the threat of
inflation, while America's did, focused on the
impending downturn, it led to a stronger euro. This in
turn contributed to Europe's downturn, though it made
America's GDP numbers look better for a while. Now,
Europe's downturn is ricocheting back on America:
Europe's weaknesses are contributing to America's.

The same has happened when it comes to regulation. To
too great extent, there has been a race to the bottom
in accordance with the myth that deregulation breeds
innovation. Instead, the innovation was greatest when
it came to getting around the regulations designed to
ensure good information and a safe and sound financial

Financial markets are supposed to be a means to an end
-- a more prosperous and stable economy as a result of
good allocation of resources and better management of
risk. But instead, financial markets didn't manage
risk, they created it. They didn't enable America's
families to manage the risk of volatile interest rates,
and now millions are losing their homes. Furthermore,
they misallocated hundreds of billions of dollar.

The Human Toll

The consequences of these mistakes will run into the
trillions -- not just the money that is being spent on
the bailouts, but the shortfall between global economic
potential growth and actual performance.

Beyond this, of course, is the human toll -- families
whose life dreams are destroyed as they lose their
homes, their jobs, and their life savings. If we are to
maintain global financial liberalization, with
financial products moving easily across borders, we
must be sure that these products are safe and that the
financial institutions who are selling them can stand
behind the products they create.

Financial market regulators, at both the national and
international level, have failed. To a large extent,
Basel II, the new framework of bank regulation, was
based on self-regulation, itself an oxymoron. Banks
have shown that they are not up to the task of managing
their own risk. But even if they had, there is the more
fundamental problem of systemic risk.

The current global financial architecture hasn't been
working well. But more than that, it is unfair,
especially to the developing countries. They will be
among the innocent victims of this global crisis that
wears the 'made in America' label. Even countries which
have done everything right -- those which have managed
their economy with far better regulation and better
macro-economic prudence than the US -- will suffer as a
result of America's mistakes. Worse, the International
Monetary Fund has -- at least in the past -- demanded
pro-cyclical policies (raising interest rates and
taxes, lowering expenditures when an economy goes into
a recession), while Europe and America do just the
opposite. The result is that capital flees developing
countries in times of crisis, reinforcing the vicious

Flawed Governance Structure

There is mounting evidence that the developing
countries may require massive amounts of money, amounts
that are beyond the capacity of the IMF. The sources of
liquid funds are in Asia and the Middle East. But why
should they turn their hard earned money over to an
institution with a failed track record; one which
pushed the deregulatory policies that have gotten the
world into the mess where are in now; one which
continues to advocate the asymmetric policies which
contribute to global instability; and one whose
governance structure is so flawed?

We need a new financial facility to help the developing
countries, one whose governance reflects the realities
of today. Going forward, this new facility might lead
to deeper reforms at the IMF. Such a facility needs to
be created quickly, but if experts from the finance
ministries and central banks are loaned out to this new
institution, it could be up and running in short order.

There are further reforms that need to be undertaken.
The dollar-based global reserve system is already
fraying -- the dollar has proven not to be a good store
of value. But moving to a dollar-euro, or a dollar-
euro-yen system could be even more unstable. We need a
global reserve system, for a global financial system.
Keynes wrote about this at the time of the last big
downturn, but the need today is even greater. His hope
was that the IMF would create a new global reserve
currency. He called his Bancor, much akin to the IMF's
SDR (special drawing rights). This is an idea whose
time may have finally come.

It is inconceivable that America would have prospered
had it left the management of its financial system to
the 50 separate states. They have a role, but that of
the national government is essential. We now have a
global financial system, but we are leaving its
management to that of the individual countries. This
system simply cannot work.

We will never achieve perfect stability of our
financial markets, or of our economy. Markets are not
self-correcting. But we can do a lot better. Hopefully,
at the summit in Washington, the leaders of Europe and
Asia will lead the way, beginning the task of creating
the global financial architecture that the world needs
if we are to have a stable and prosperous 21st century.

Joseph E. Stiglitz, 65, won the Nobel Prize in
economics in 2001 for his contribution to analyses of
the relationship between markets and information
uncertainties. He is widely cited and writes a popular
column for the New Yorker.
Click on the link below for a powerpoint slide show about Tom Friedman's book,
The World is Flat. My assessment of the book (and his previous book, The Lexus and the Olive Tree) is that he is correct in most things, but far too positive about what globalization is doing to poor people on the ground. But he writes extremely well and has done much to raise these issues to the common person's awareness.