|April 23, 2018
Cole Altom: Hello everybody, welcome to Geopolitical Futures podcast. With me again is Jacob Shapiro, I am Cole, hello Jacob.
Jacob Shapiro: Hello Cole, nice to be with you.
Cole Altom: Thanks, and I want to talk about geopolitical things as we are want to do here. But first like I just kind of have to ask, what the hell is going on in Austin? For listeners who don’t know we’re based in Austin and over the course of I guess the past month, there have been now counting last night and this morning like four or five different explosions, actual bombs, constructed differently so nobody knows if they’re completely related or not.
In addition to another bomb threat at SXSW, the big media festival that we have here every year. I don’t really have a point in saying all this other than we all have some friends and family even if all of our listeners aren’t in Austin so stay safe out there.
Jacob Shapiro: Stay safe out there and also, I mean, the pedantic point, because I am one to make pedantic points, is that we you know sort through stuff through the world all the time and you know what’s going on here in Austin is kind of scary for some people and there has been some loss of life and that’s tragic. But it’s not going to be geopolitically significant.
And one of the hard things to do is like let’s say you were an outsider and you were trying to think about United States geopolitics or what U.S. foreign policy is going to be in the world, you could look at what’s going on in Austin and you know write some article about well tensions in the southwest or tensions here are increasing and stuff like that. It just you know goes to show you that a lot of what we’re doing here is very human. Like when people, when there are protests somewhere, when there is a terrorist attack somewhere, when war is happening, there is this human character to it that you really can’t get unless you’re in it so I don’t know if that’s a useful point.
Cole Altom: Yeah and I didn’t bring it up to kind of you know force that issue or parlay that but it is a really good point and in fact it reminds me sort of, Slate of all places and I’m not like the biggest fan of Slate but they do a really fun column every so often it’s called “If it happened here” or “If it happened there” excuse me and they basically write a column about something that happened in the United States as if we would write about it somewhere so as you kind of alluded to it’s like “sectarian tensions between Catholics”. It’s really funny.
Jacob Shapiro: I feel like that’s one of the things we try to do more than anything else because if you look at the media there are certain tropes and certain constructions and certain narratives that people use even if it’s not exactly what’s going on. And so one of the things that you struggle with more than anybody on staff because you’re head of editorial so you kind of have to go through all of the little short hands that analysts like me are using to try and explain things and be like look this is not what’s going on here, you’re just using some construction that you learned five years ago to look at this other issue the exact same way.
Cole Altom: Yeah and in the past seven or eight years, I’ve asked rhetorically kind of you know snobbishly in some cases, like what’s a flash point? Tell me what a flash point is. You keep saying flash point. And I know what it is, like I mean it’s rhetorical, it’s not always useful if you know our readers aren’t exactly like speaking our language. Like any other industry, we have our shorthand, we have our jargon, we have these things that we love too much and so I try to be a filter for that and I don’t know if I succeed every time.
Jacob Shapiro: I think you do and I think that’s a big part of the process, a big part of the process literally is well what do you mean by that word? I even, with the analyst team that I oversee, I often ban certain analysts from using certain words. I have bans myself. I try not to use the word ultimately because I literally went through a phrase there where I was using ultimately every other paragraph and that kind of defeats the purpose.
Cole Altom: You know you’re talking to me as if I don’t know that. You’re like yeah no it’s fine. I could honestly talk about the editorial process for hours and hours and hours. I don’t think that would be like terribly engaging for some of our listeners but hey you know let me know.
In the meantime though as always, we’ve had in fact I guess it’s worth pointing out right now too, our main feature today is going to be me and our colleague Allison Fedirka. There’s just been a lot of like little rumblings here and there in South America, excuse me, and I just kind of wanted to pick her brain about that so after we do, we’re actually going to cut to a recording Allison and I did earlier in the week so if it sounds a little disjointed, it’s because it is, we already did it. So, we could head or we or you could bask in the glory of our Putin prediction, he won re-election.
Jacob Shapiro: Yeah, you heard it here first that Putin would win re-election.
Cole Altom: Shocking.
Jacob Shapiro: But one of the more interesting things that came out about that is that one of Putin’s aides on Friday so before the elections were held said that Russia was cutting defense spending, which for us is sort of that holy grail of statements where ok, that actually we weren’t expecting that. You wouldn’t expect a cut in defense spending from the same guy who said two weeks ago you know Russia has supersonic missiles that can destroy any enemy.
Cole Altom: Yeah, he’s been hyping it up for weeks now.
Jacob Shapiro: So, we’re going to be looking, taking a close look at that in the week ahead and seeing if we can’t try and put two and two together and look at what Russian defense spending looks like in this new term for Vladimir Putin.
Second thing on our radar is you know this Korea dance continues going on but so the United States and South Korea are expected to release their schedule for military exercises coming up at some point this week. It’s not clear when this week.
Cole Altom: And that’s always been a big sticking point for North Korea, correct?
Jacob Shapiro: It has been a big sticking point for North Korea but one of the things that came out of the most recent South Korea/North Korea dialogue was that Kim Jong-un appeared to say well that’s no big deal. Like we understand that South Korea has a stance and that South Korea has to do things that are in South Korea’s interest and we are not going to break this reconciliation move that we’re making if South Korea goes ahead with announcing some of these drills.
Now Kim Jong-un says many things, the proof will be you know once South Korea and the United States announce those drills, is North Korea going to you know say this is awful and we can’t believe that South Korea ever did this, this undermines the talks or is North Korea going to maybe you know put out a press statement or put out some fiery rhetoric but proceed and will this South Korea/North Korea détente continue.
And then last but not least, the I believe it’s the National Security Council, I think is what it’s called but It’s a collection of Iraqi cabinet members approved memorandum of understanding, a M.O.U. is the parlance that increases intelligence cooperation between Iran and Iraq and this is one of those reports that when you first read it, you stop and go huh, what does that mean?
Cole Altom: Right and it’s kind of worth noting here too that memorandums of understanding are not exactly the best indication all the time of signaled behavior. And maybe something will come to pass but in and of themselves, they don’t always mean a whole lot.
Jacob Shapiro: No, I mean like Cole and I have signed a memorandum of understanding to have beers once a week.
Cole: We don’t.
Jacob: Again, if we don’t, it’s not like anything changes. But you have seen Iraq slowly drifting out of the U.S. orbit and part of that was you know the U.S. welcomed that. The U.S. welcomed help from Iranian backed militias in Iraq to help defeat the Islamic State because the U.S. trained Iraqi Security Forces didn’t do so well. You’ve had the Russians selling more weapons to the Iraqis which might suggest that Iraq is looking to get a little more independent.
But this is a little bit different because the United States has been developing intelligence assets in Iraq for a long time and if you are now sharing intelligence with the Iranians, which whatever you think about the Iran nuclear deal, whatever Iran’s help in the fight against the Islamic State, the United States and Iran are enemies. They are hostile countries when it comes to intelligence sharing anything like that.
So, if Iraq really is saying hey like what we know, the Iranians can now know, that’s a big deal for the United States and a big blow to whatever interests the United States has and its ability to shape things on the ground. So, it’s important to see well just what the heck does that M.O.U. mean? What are the pressures on the Iraqi Prime Minister causing him to do this? And does that tangibly mean that you know we’re looking at Iraq completely within the Iranian sphere of influence and not just sort of flirting with all sides?
Cole Altom: Did you get my email? Well Jacob, I hate to you know cut it short because we only just started but I think I’m going to cut it short.
Jacob Shapiro: Look Allison’s more interesting than I am so.
Cole Altom: And she is so knowledgeable when it comes to all things Latin America. It was actually like very useful for me to learn these things as well, And hopefully, it’s good for our listeners too. So again I know you’re busy, thanks again for taking the time. And now to Allison.
Jacob Shapiro: Alright.
Cole Altom: Allison, how are ya doing?
Allison Fedirka: Good Cole, how are you?
Cole Altom: I’m doing good thanks. For those of you who might not know, Allison Fedirka is our South America expert, well she’s expert on lots of things but basically if we want to know anything about anything that’s happening in the Western Hemisphere, she is the person we go to first. That sound about right?
Allison Fedirka: It sounds very generous but I’ll take it yes.
Cole Altom: Yeah ok good, good, then maybe sometime later you can say something nice about me. Jacob’s not so keen on that. Let’s jump right in. You want to get into it?
Allison Fedirka: Yeah.
Cole Altom: That’s why we’re here. So first let’s talk about drugs. We can talk about drugs. Yeah, so kind of, to contextualize a little bit, the Mexican drug wars as we kind of have been following for many years got really, really bad they peaked in kind of like in the late oughts or early 2010s or whatever. And according to some reports subsided really well, there’s and I just say according to some reports because there are some people who think it was more about like media reporting, whatever I don’t want to get into that necessarily.
But safe to say, that like media reporting or not, like things are pretty bad again and Mexico is a key player in the drug trade obviously and that kind of goes down into South America so let’s just kind of follow that path. Let’s start in Mexico, what is unique about Mexico? What is unique about Mexico? What’s going on and why is it flourishing there in ways it’s not flourishing in other places?
Allison Fedirka: So, the unique thing about Mexico is that you have a country that does produce opium which is a very popular drug or it’s becoming more popular nowadays and it’s also a perfect transit route to get cocaine from South America to North America. And when we think about drugs, we can kind of always make it about violence and there’s definitely a lot of violence and there’s definitely a lot of personal issues and emotions that can get attached to these things.
But we try to approach it a little bit more matter-of-factly if you will so like cocaine, opium, we can kind of almost think about them a little bit like commodities. They’re something that you grow, there’s only so many places where they can grow, there’s only so many ways you can produce these types of products. And then you have to think about it in terms of a business of who is going to be making the money, who’s going to be running the business? Where are your markets?
And one of the things that makes Mexico so special is that one of the largest consumer markets for drugs is the United States and so it is very well positioned to be able serve as both an export and transit country to get a variety of drugs into a very large market facing us is very desirable. When we talk about trade globally, we talk about how everybody is envious because they want to be able to trade with the United States because the market is so large. And to a large degree that applies with drug consumption as well, you just have people with money and you have a lot of people. And Any time you have that, you are going to have a good market for consumption of whatever it might be.
Cole Altom: I think it’s a really interesting point too because you know as you say you know opium can only grow in so many places. You know really famously, it’s grown in Southeast Asia in the Golden Triangle, right? Grown in some places in Mexico. They can grow marijuana in Mexico. They can produce methamphetamine virtually anywhere. Depending on how quality you want it to be, you can do it in the back of your car, you can do it a big fancy laboratory. So anyways, I guess I’m bringing that up to say they cannot grow coca from which cocaine is derived, correct?
Allison Fedrika: Correct.
Cole Altom: That can only be grown basically in one place and that place is South America.
Allison Fedirka: Yes. So South America has a large monopoly on the coca production and as a result lots of times cocaine production which is the chemically processed version of coca. So, you’ll see that in Bolivia, it can be grown there, it can be grown in Peru and it can be grown in Colombia.
And one of the three counties we’ve really been paying attention to is Colombia for two reasons. One because in the past I would say three years, two to three years, the amount of area cultivated and the amount of yield per crop and the amount of cocaine produced in Colombia has started to rise again after a period of successful reduction. So that’s eye catching. And then also because the recent D.E.A. figures show that 90%, 92% of all the cocaine that comes into the United States comes from Colombia.
So, while there are other places that do produce cocaine, that one is starting, you know that location is starting to really grab our attention because it is starting to become one of the, you know the largest producer and also is the largest supplier for the U.S. market.
Cole Altom: Well right and correct me if I’m wrong, we’re starting to see some Mexican cartel, well not starting to, they’ve been doing it for a while. But you know, again you think about this as a business, right? The Mexican criminal organizations that kind of traffic in these things, like you said they’re right by your destination markets. They own distribution, they own transportation. The only thing they don’t really own, cocaine wise, is the means of production which they have sought to remedy over the past few years and it’s kind of, it’s becoming a little bit more noticeable I guess you could say. More undeniable, yeah?
Allison Fedirka: Yes, so it’s been a perfect alignment in terms of what the Mexican cartels would want to see to have this opportunity to gain a greater control of their supply chain and their production chain and that is you know as you said from a business perspective not a bad idea. You want to be able to produce, you want to be able to distribute, you want to be able to transport and now they have this opportunity in Colombia to be able to go in and gain better control.
And that opportunity came from the fact that over the past you know arguably almost two decades, the Colombian government has done a very good job of systemically going after types of rebel groups such as auto-defense groups, the FARC, the ELN is another latest target. And they’ve been working progressively to reduce the presence and the violence that these groups carry out against Colombia, that in itself is a very different conversation.
But one of the by-products of that is that instead of having these large you know cartels that the Colombian government was going after in the 80’s and 90’s and all of these other larger rebel groups, these groups used to be able to compete with Mexico, they used to be able to be the same size, be the same strength. And they used to be able to engage in business on equal footing and now that’s no longer the case. A lot of these groups because of the crackdown have fractured, they’ve seen people go to jail, some of them have decided to give up arms. So, you’re seeing much smaller groups operating in Colombia.
And the Mexicans were very business savvy and recognized that a power void was starting to emerge and that there was going to be, an opportunity for them. So, these smaller groups don’t have the power in numbers to do mass exports the way the Mexican cartels do. And so, they basically got very smart, starting sending down recruiters to get local groups to work underneath them and you know business manager type persons to say hey we’re going to finance your operations. We’re going to lease this farmland, we’re going to buy this farmland and you’re going to help us work it. You’re going to help us control local populations. You’re going to help do the processing in the laboratories because you’ve already been doing this. And they’ve even gone so far as to you know hire engineers for agriculture, they’ve hired engineers for chemical processing.
And So now all of a sudden you see the quality of cocaine purity has improved, the yield for crop has improved and that’s not an accident. This was a very conscientious effort by the Mexican cartels to gain better control of their supply chain and improve not only the control of the supply chain but the quality of the product that they’re producing as well.
Cole Altom: Yeah and that kind of touches on kind of a larger point and you can elaborate at length hopefully better than I can. But again, this kind of comes back down to like why do we at GPF like care about this? If this is just like some gang warfare stuff like does that really like move the needle globally? And I think you can make the case that it does, right? Because you talked about the auto-defense groups which are essentially like militias that operate and exist like outside the purview of the federal government of these countries.
You’ve got these franchises being born and they’re looking to these people for economic opportunity and employment and they kind of like run these places and they can do that because there are these like fringe places in Mexico and Colombia where it’s just hard for any like national government to exert power, to extend its power. And so, they can kind of, the point is when you’ve got like multiple nodes of power in a country, that’s like really important especially for a country that as like near and dear to the United States as Mexico, yeah?
Allison Fedirka: Exactly, so you’ve got multiple power players some which you can directly negotiate with such as the governments. Others that are challenging the power of the government that make it very difficult to control what’s going on. And you have not to mention all of Central America, which lies between Colombia and Mexico and the United States. So, you’ll see these countries, some of them do have laboratories for producing cocaine or serve as stop over points of transit. So that whole region can potentially get involved and is already to a degree involved in this type of activity.
We even saw at the end of January, a crackdown on seizures and arrests for drug related activity resulted in a car bomb going off in Ecuador, which is something that Ecuador had never seen before. And it was related to a FARC dissident group that is tied to a Mexican cartel so we’re starting to see some spill over already. The shared border of Venezuela and Colombia has already seen this for several years now. So, it has not reached the point of you know necessarily a failed state by any means. We’re not even close to that.
But the potential for problems you know within Colombia, within Mexico, spilling over to neighboring states, is something that becomes very difficult and something to be mindful of because also you have the United States involved. We’ve got President Trump going down to Colombia in April. We have NAFTA negotiations still going on. And we’ve seen the U.S. government link different types of issues to these broader, bi-lateral relationship issues. And so, the future of some of these trade deals and some of these bi-lateral relations are now going to start getting linked to these issues as well and as part of the larger bi-lateral issue of the relationship, it makes sense.
So, it becomes very complex, very fast because it’s not isolated anymore. And once it’s not isolated, it can touch on a wide variety of things and any time you have issues that could change the way the U.S. relates to other countries, we pay attention. That’s not to say that it will fundamentally change anything, but more often than not in this region, the status quo of relationships is pretty structured so anytime we can see something that will challenge the way the U.S. interacts with the region, it’s significant.
Cole Altom: Let’s talk about the FARC then. Go back to Colombia, and apologies for not clarifying earlier, that’s the Revolutionary Armed Forces of Colombia. Talk about their history a little bit, talk about their demobilization if you would indulge me.
Allison Fedirka: So, this is a really interesting group. It is, it has morphed over time. It started out in the 1950s in Colombia as a very ideological group that was…
Cole Altom: And what was the ideology?
Allison Fedirka: Imagine you know we’re looking at the Cold War type scenario that was emerging around the gold, globe, excuse me. So, we have people who were very much into to local rights, they’re against you know government. A left-wing type view if you will of how to deal with things. Over time, they grew and had some more extreme approaches in how to deal with the government. There was a very bloody period in Colombia in the 1950s and it basically continued up until you know about 2012 to various degrees.
We saw them morph over time as the Cold War ended. A lot of the political impetus behind them kind of started to die out, the ideology started to die out and you saw them turn into more of a drug trafficking narco-terrorist group if you will. And since then they have got into a lot of illicit activities, not just necessarily drug trafficking, but money laundering, illegal mining, a variety of things.
They have always and to some degree, attacked or impacted the local populations sometimes more severely than others. And you also had these contingents of auto-defense groups then emerging later on in time saying well we need to keep our people safe, we want to fight against the FARC and it was a lot of different groups, all fighting for different causes, all getting involved in black market activities. All of them with firearms and creating a lot of violence in Colombia. Then you had the cartels and eventually we ended up getting governments in Colombia that started to work with the United States with some of their anti-drug measures and then also to crack down on these groups, slowly but surely.
So, in the mid-2000s, we saw the auto-defense groups negotiate an agreement with the Colombian government. The past few years we’ve seen the FARC negotiate an agreement with the Colombian government. Now the Colombian government is in the very initial phases negotiating an agreement with ELN, which would mark arguably the last major rebel group that the Colombian government has to negotiate with.
So, it’s been decades of violence and illicit criminal activity that the Colombian government has been attacking and trying to solve. And with these figurehead groups, they have succeeded. And now it’s going to shift and become a question to these smaller organized crime groups that are remnants of these larger groups or spinoffs of these larger groups that didn’t fall underneath those umbrella agreements.
Cole Altom: Yeah and a lot of that, you know the success of those things will probably depend on how you, you know how you bring amnesty, how do you bring these people back into the political fold now that they’ve been outside of that for so long. And that’s probably a conversation for a later day. But… ok please yeah, no.
Allison Fedirka: I was going to say May would be a good time, Colombia has the Presidential elections then. That would be a good time for that conversation.
Cole Altom: Alright, I will mark it down right now. When I say like indulge me and I appreciate that because one of the things, speaking only for myself, one of the things I like about Latin America and about South America is that it still does have these like I call them Cold War hangovers, where it’s like the Cold War is over, like we know it’s all over, but it’s still like the residue is still there because you still do have like a lot of populists and like Leftists for whatever that means, like governments and things like that.
So, it would be remiss of me not to talk about the like most obvious and probably the most painful Cold War hangover which is Cuba, yeah?
Allison Fedirka: Yes.
Cole Altom: You want to talk a little bit about Cuba, what’s going on there. And I think lost in this too, it would be nice to remind people like why Cuba matters to begin with.
Allison Fedrika: Right, so just to touch on this idea of a Cold War hangover. When we think about geopolitical trends, they’re mid-term, they’re long-term. So, the fall of the Soviet Union marks the beginning of the U.S. rise to power as being really the uncontested global super power. That’s still playing out. The U.S. has not completely figured out what that means. They’re still working on how they’re going to interact with every region and get their different strategies. The rest of the world is still figuring out how they’re planning to deal with that as well.
So, this is very easily observed in a place like Cuba but by no means exclusive to just Cuba. And the reason why it’s so easily observed in Cuba is because we have the same regime in place that we did back in the beginning of the Cold War, which is the Castro regime. It is expected that in April that Raul Castro will step down from power and that his number two will replace him.
And that is the end of what would be the Castro family, however not the end of the Communist party rule in Cuba. We saw Raul take some measures to try to kind of open up and modernize a little bit of the Cuban economy with things like collective groups for employment and trying to head some large economic projects that would increase investment. They have had varying degrees of success to minimal success.
There are still huge economic issues in Cuba. The embargo is a huge issue. There’s a drought that’s causing problems. There’s production issues, there’s you know investment issues. The government has stopped publishing official economic figures for over a year now. And that’s not news, that’s really nothing new. This is something that has been in place in Cuba for quite a long time now.
And the reason that we care is you know lot of our people are going to remember the Bay of Pigs where if you look at where Cuba sits, it sits right in the Gulf of Mexico. It is very close to the United States and any type of maritime traffic we have coming in and out of the Gulf of Mexico, be it from Mexico, be it from the United States or the Port of New Orleans or an oilfield off of Texas, those waters are valuable for transit, valuable for oil production and vulnerable to Cuba in that if you control Cuba, you can help control some of these maritime traffic routes.
So, the U.S. has had an interest in this since you know the Spanish-American War, where you know we have the Rough Riders going into Cuba and helping the Cubans kick the Spaniards out of the island. And you can say oh sure like they wanted independence, they’re all against monarchies and colonization. But after that, Cuba became very closely allied with the United States and was essentially treated like a territory of the United States if you will. The U.S. had huge commercial control over Cuba and a huge influence over their political system and the whole reason behind that was because that gave the United States security. That gave them guaranteed assurance that they could control those maritime routes of who came in, who came out and extra security on that end.
Fast forward to now, the United States Navy is now much more developed. It’s arguably the strongest Navy in the world and I know that some people and some of our listeners do debate that and that’s a debate for a different podcast. So, it’s a relic, its strategic value has not diminished. The ability of other countries to come in and challenge the United States by influencing Cuba or projecting power from Cuba or setting up military installations to try to challenge the United States from Cuba, that’s no longer happening.
So, it’s somewhat dormant in the sense that there’s very little threat that can be projected to the United States from Cuba at this point in time, which also means the U.S. isn’t really doing much with Cuba at this point in time either because it doesn’t have to. So, it has a lot of other issues that are more pressing and more important and so long as there’s nobody challenging U.S. influence or interests in the Gulf of Mexico, it can really just sit there as long as Washington wants and they don’t have to worry about anything.
Cole Altom: Yeah, it’s a good point and like there’s also no benefactor really helping Cuba all that much anymore, right? Because it’s you know so China is gone not really but I guess the most obvious one, it’s probably its closest ally throughout these decades has been Venezuela. And Venezuela can’t really do anything, Venezuela can’t really help itself right now let alone like help out Cuba. I guess talk about, let’s talk about what a, frankly what a mess Venezuela is.
I mean that’s a hard truth to say but it’s like I don’t even know where to begin to unravel this. Like they don’t have any money, like they don’t have like food stuffs and stocks and staples on their shelves, like they’re running out of toilet paper and beer. Like that’s a recipe like for disaster. So, I guess talk a little bit about like Venezuela’s fall from grace if we can do that in a very short amount of time we have to actually do that.
Allison Fedirka: Yeah it will be difficult to do it justice in a short amount of time but basically you know we have a country where the economic development was very dependent on oil, the inflow of U.S. dollars for government revenue depended heavily on oil, I think it’s something about 96% of U.S. dollars that the Venezuelan government had, comes from oil. And then you had also a government coming in when Chavez came to power that was a very, what’s the word I’m looking for, populist orientated government where they used a lot of government funds to kind of help boost the lower classes, help try to develop the economy, help raise the standard of living of a lot of different people.
When you’re trying to build a middle class or grow your economy or help people out, there are ways to do that sustainably and obviously in the case of Venezuela that has not been the way it was executed. So, you have a country that’s very dependent on importing food, it can’t produce enough food on its own. You have a country that’s very dependent on oil and you have a country whose population was increasing its dependency on government programs for their quality of life. When you start seeing your income go down or in the case of Venezuela especially after oil prices crashed, that was what kept everything together.
So as soon as oil prices crashed, everything else just has a domino effect going on down. If you don’t have U.S. dollars, you can’t buy imports, which means you’re going to have troubling importing food for your population. If you don’t have money coming in from oil, then you’re going to have less revenue for government programs. And it has really just has been a downward spiral for the last five plus years for the Venezuelan government and for the Venezuelan people.
I personally believe we are reaching a bottoming out point. I have said that before. It’s really difficult because geopolitical studies give us the ability to predict trends and longer-term issues and so we can say that the situation is not sustainable but it’s very difficult to pinpoint exactly when that worst of the worst days is ahead of time. We’ll probably recognize it for example when it does happen. But knowing exactly when that will be is a very difficult thing to predict.
Cole Altom: Yeah and I’ll definitely get your back on this one. It is hard and I can’t tell you as an editor how many times we’ve you know we’ve talked about, we’ve written a piece something along the lines of like something’s got to give in Venezuela or like this is really it, like this is the boiling point and we are not alone. A lot of people have done that. It’s just really funny how like it is true something’s got to give at some point but like I don’t know when.
Allison Fedirka: Right. And it’s really unclear when that will be. You know last year we saw incidents of local security forces you know actively carrying out small scale rebellions which kind of made us think ok this is the moment, this is when we’re going to have some type of civil military union to cause a change in government which has historically been the case in Venezuela. And that was no longer the case.
We had at one point you know the government in gridlock because the opposition controlled the legislature and then the government was able to successfully set up a parallel legislature. We are now reaching a point where there was rounds of dialogue where we thought maybe there would be a negotiated solution, that has not occurred. And all of the while, the local population has been extremely resilient to being able to tolerate these situations and to keep on going.
So, the next really big event that we’re going to watch closely to see if some type of breaking you know event occurs or it could tip the balance is going to be the upcoming elections that have been scheduled tentatively for May. I say tentatively because they’ve been changed multiple times before. May is now the new date for these elections and a lot depends on how they go.
It’s unclear if the opposition will even participate in these elections. In the past, we’ve seen them withdraw from official political processes because they don’t have any confidence in the electoral process. They don’t have any confidence in the electoral courts or recognizing election results or anything like that. So, if they don’t participate in the elections, that’s going to be an issue. We have seen a lot of the opposition leaders at different regional events or on their own kind of reaching out to different governments in South America, talking to people on the sidelines with Chilean government officials, Colombian government officials, Mexican government officials, Argentine officials.
So, there is a regional awareness and dialogue going on. There’s another OAS meeting coming up where this type of dialogue will continue. I don’t think that will be the point where there’s any solution found but there will definitely be backroom conversations of ok what’s going on, how are we going to respond? And everyone’s preparing for something to happen. And the elections I think are the next time marked event where everyone’s going to be watching very closely in Venezuela in terms of is this going to be the moment where we see some type of change taking shape.
Cole Altom: So that probably is a good time to transition to something else and we’re just about out of time so I want to make sure I do ask you this and it does relate to that point you just made. Like South America is not Europe which is an obvious thing to say but South America is not even Central America, it is not North America. Everybody has different geographies and different demography’s, they have like different political systems. All these different things, which is just to say that at GPF, we don’t think about Europe the same way we think about Africa and we don’t think about Australia the same way we think about Southeast Asia, even though they are close together.
So how do you think about South America when you think about South America? Like what’s, if you could sum it up, like what characterizes its interactions with the world and its sort of general behavior?
Allison Fedirka: So, the location is, it’s located mostly in the Southern Hemisphere, you have parts of you know Ecuador, Brazil and Venezuela and Colombia that are located just above the equator or above the equator. But the vast majority of the land mass and the population live below the equator and the Southern Hemisphere and this fundamentally changes the way it interacts because roughly three quarters of the entire world’s population is north of the equator.
So, this means too, that when you have the Atlantic and the Pacific Ocean on either side of you, you are not even connected to other land masses. You have large you know distances you need to cover by boat or by plane to get to your next closest neighbor or trading partner. You know a flight from Texas to Sao Paulo is like nine or ten hours. It’s not a close location by any means. And that is important to keep in mind because as the world developed trade routes, everything was focused on the Northern Hemisphere. And with the majority of the land and the population in the Northern Hemisphere, a lot of your conflict is going to revolve around the Northern Hemisphere.
So South America is fundamentally challenged because it naturally sits just outside of what everybody else is doing. It is a huge producer of commodities which is something that everybody in the world needs and so that is a very helpful connection for the entire region you know what type of commodity may change with the country. But all of these countries have you know metals or grains or other types of useful products that everyone in the world is going to want to buy. And so that is a fantastic link for these countries.
They also know that they’re not gonna be the size of the United States, they’re not going to be the size of China. Brazil is a very large country but again it still has to overcome distance just like anybody else. So, we’re seeing you know lots of trade blocs, I shouldn’t say lots but there’s two main trade blocs that have formed in South America now as these countries try to get power in numbers and try to find ways to link themselves with the rest of the world. So, trade is an obvious way, commodities an obvious way.
And there’s also just this train of thought in South America of this idea of insertion, where when you’re on the outside and you see what everybody else is doing, you need to come up with ways for you to insert yourself in what’s going on in the rest of the world. Where can you contribute, how can you contribute and how can you get included in something or make yourself more relevant to discussions that perhaps people wouldn’t normally have thought of including you in the first place?
So, there’s only so much you can do with that but these countries do think of these things. If you look at Peru, Peru will be very proactive with anything about climate change and used that as a foothold to get into some global discussions. If you look at Argentina, they used their nuclear energy capabilities, especially the promotion of Pacific means as a way to get involved in global discussions on things.
So, it is not a perfect solution by any means, these countries will never be Poland, where they’re flanked by Germany and Russia, which are going to be regional and world powers that are constantly you know finding itself at the intersection of military conflict or political conflict or what have you. But that is where these countries stand and the reality that they go through every day as opposed to say the United States or China or Russia or some of these other places.
Cole Altom: Well I think we’re just about out of time but I want to thank you for taking the time to join me today and let me pick your brain about some of these things. Again, it’s helpful for me and I think it’s helpful for some of our listeners to like understand exactly why we look at things the way we do. But it was a pleasure as always.
Allison Fedrika: Likewise, always fun.
Cole Altom: Yeah ok, that was Allison Fedirka, I’m Cole Altom, thanks a lot for joining us. Bye.