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Net Assessment of South America

April 28, 2016 The region stands out due to its relative stability, while much of Eurasia faces crises.

Net Assessment

|September 20, 2017

The Americas describe the giant vertical land mass and islands that cover the Western Hemisphere between the Pacific and Atlantic oceans. As we re-examined our framework, the decision was made to address the Western Hemisphere as North America and South America. Given its geography, politics and economy, Mexico is firmly tied in to North America. From a geopolitical viewpoint, what makes South America stand out as a distinct region is not a common Latin cultural link, but rather that the continent behaves like a large island. Massive oceans and seas surrounding the continent physically separate it at great distances from other regions in the world.

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Impact of Colonial Past

South America as we know it today has its origins with the colonization of the region by European settlers – primarily from Spain and Portugal. While colonialism is not unique to South America, the governments and social structures established during the colonial era laid the foundation for the region’s future development. The American colonies were resource rich lands whose wealth was promptly shipped back over to Europe. The basic colonial production systems, transport routes and emphasis on raw material exports shaped the economic development of the region for centuries to come. To this day, many countries in the region depend heavily on raw material exports for revenue. While the economies in all of these countries have slowed due to the current exporters’ crisis, Venezuela’s and Ecuador’s economies have been hit the hardest thus far. Though initially identified as a very vulnerable country in the exporters’ crisis, Chile has so far managed to avoid economic crisis.

Colonialism also left its mark on society and government by placing an emphasis on social stratification and hierarchy. While some movement and mixing between classes did occur, in general there was a clear demarcation between wealthy land owners, merchants, government officials and the workers that served as physical labor. Government decisions and administration were in the hands of a select group of people, which helped develop a very hierarchical system. These characteristics influenced the formation of regional governments, which are still very bureaucratic. Modern elites in the region are a combination of government officials and wealthy business people. While such features may not be unique to South America, they remain essential to understanding how governments in the region operate.

In the 1810s and 1820s, a wave of independence swept through the region, ending colonial rule. The push for independence came just after the French invasion of Spain and fall of the Central Junta, the Spanish body that held power in these countries, during the Napoleonic Wars. Spain’s power was in decline and the previous revolutions – American and French – had already set precedence for successful colonial independence movements. However, acquiring independence did not guarantee South America freedom from meddling foreign powers. In pursuit of its national imperative to eliminate any threat to the U.S. by any power in the Western Hemisphere, the United States worked in the 19th and 20th centuries to position itself as the hemispheric leader of the Americas. This started with the Monroe Doctrine in 1823 through which the U.S. tried to discourage further European colonization of the Americas. This was followed by the Roosevelt Corollary in 1904 that discouraged European nations from seizure or intervention related to debt payments by South American countries. Washington’s intervention ranged in severity from serving as an arbitrator between Argentina and Paraguay after the Triple Alliance War to lending support to right-wing dictatorships in the region.

Brazil as Potential Regional Leader

South America has struggled to produce a regional leader, in part because no single country embodies the necessary characteristics to assume such a role, even though some countries have large populations, land and natural resource deposits. The Andes Mountains and Amazon rainforest physically divide the continent making it nearly impossible to have dual access to both the Atlantic and Pacific oceans. With the exception of Colombia, no South American country has access to both the Atlantic and Pacific oceans. In the case of Colombia, mountainous topography runs straight across the country, making internal logistics and transportation very difficult. This undermines the advantages of having dual coast access. For these reasons, no South American country has fully been able to assume the role of regional leader for an extended period in modern times.

Brazil is often regarded as the up and coming regional leader for South America. This is mostly due to its massive size in terms of land, population, natural resources and economy. It is also in a geographic position to be able to project its power beyond the region, namely across the south Atlantic to western Africa. This is one of the few areas in the world that is not heavily patrolled by the U.S. or other geopolitical power contenders. Brazil has pioneered South American relations with African countries and currently carries out development work, investment projects and security talks with multiple African nations.

However, Brazil faces its own constraints. It is geographically closed in from most of South America by the Amazon rainforest and, therefore, does not have direct access to the Pacific Ocean. The country also faces the physical challenge of connecting and securing national territory. Brazil’s core is the triangle formed by Rio de Janeiro, São Paulo and Belo Horizonte. To encourage growth, three regions – the South, the Center-West and the Northeast – must have strong social, infrastructural and economic ties to this core in the Southeast. While the South is firmly connected to the core, the Center-West and Northeast are still works-in-progress in terms of infrastructure, economic development and, to a lesser extent, border security. The North region (i.e., the Amazon) stands as a bit of an outlier and can only be incorporated after the other three. Brazil must first fulfill these internal geopolitical imperatives and then consciously decide to assert itself before being able to exercise strong, stable regional leadership. While the country appeared to be on the path toward regional leadership in early 2000s, the current economic and political crises prevent it from assuming this role at this time.

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Argentina as a Regional Counterweight

Argentina is the historic geopolitical rival of Brazil and serves as a counterweight to Brazilian influence in the region. This has its roots in the fact that Brazil was colonized by the Portuguese and Argentina by the Spanish. During the initial period of colonization, the control of the borderlands between the two nations changed hands multiple times. This dynamic is also the reason Bolivia, Paraguay and Uruguay are often referred to as buffer states between Brazil and Argentina. Furthermore, these buffer states historically have used this regional rivalry to play the countries off one another and get better terms during negotiations. While Argentina is smaller than Brazil in land mass and population, the country also possesses vast amounts of natural resources, fertile lands, developing industry and space for population growth. And like Brazil, the country does not have access to the Pacific Coast because of the Andes along Argentina’s western border.

For the last 15 years, Argentina has not been strong enough to serve as a viable regional counterweight to Brazil. However, this appears to be changing. The economic reforms being brought in by current Argentine President Mauricio Macri have created an opportunity for Argentina to recover its economy, attract investment and build its geopolitical weight. In particular, this shift in government has also paved the way for the U.S. and Argentina to strengthen bilateral relations, which had been rather negative and neglected by both sides prior to Macri’s administration.

Transitioning Away from Dictatorships

The key to understanding the behavior of South American governments and their interaction with the general populace is to remember the strong presence of military dictatorships and social revolutions that occurred throughout the region in the 20th century. Almost all of these countries experienced the rule of a military dictatorship in the 20th century, some of which did not end until as late as the 1980s. While the vast majority of these countries broke free from colonial rule in the first half of the 19th century, the current government systems are actually very young and relatively inexperienced democracies.

As such, governments and people in the region are “drawing up” their respective social contracts, for which there is no one-size-fits-all template. There is a deluge of expectations and demands being put on the governments. Many of these demands are related to government social programs, including housing, subsidies (food, energy, transportation), child welfare payments and others. Sometimes, governments have the financial ability to meet these demands; other times, a more austere approach is necessary. Often, when the latter is the case, protests will break out. Societies are also struggling to find a balance between personal and civic responsibilities and expectations for state services, many of which have become a burden on public budgets, may need to shift. This is playing out right now. Many countries in the region find themselves needing to cut back on public spending, as public revenue falls along with commodity prices, and as a result must also deal with tensions created in the general populace.

Furthermore, the present is a momentous point in the region’s history. The start of the 21st century marked the point when the first post-dictatorship generation reached adulthood. These youth and young adults are in the unique position of only living through elected governments and not dictatorships. These citizens were raised in an environment where they were encouraged to make demands on their governments and carry out social protests. Not to discredit those who came before them, but this generation will be instrumental in articulating the terms of developing social contracts because they already have a democratic system in place with which they can work.

Experiences in the 20th century have also led to a region-wide opposition to any military governments and external intervention. In addition to constructing a domestic image and social contract, South American countries also find themselves in the process of constructing an international identity to prove to the world that they are legitimate and should be taken seriously. There is strong regional support for solving disputes internally and without extra-regional players, especially the U.S. In recent years, former presidents of countries in the region, the OAS and the Union of South American Nations (UNASUR) have become the mediators of choice in South America. Most recently, OAS has been called on by the Venezuelan National Assembly to help counter President Nicolás Maduro’s authoritarian approach to governance.

Moreover, the fear of regime overthrow has evolved into a regional movement among governments to support one another and be very wary of impeachments, fearing this could set a precedent. Simply put, impeachment in many ways can be understood as democracy’s version of a coup in that it can topple a government. Since the fall of military governments in the region, armed forces have been sidelined from most political processes and underfunded. For this reason, impeachment – not the military – is the greatest threat to a government. If one leader is impeached, citizens in other countries may question the legitimacy of their own leaders. Furthermore, impeachment can bring into question the legitimacy of the following government and democratic processes. This argument is currently being used by Brazilian President Dilma Rousseff to help discourage her impeachment trial and possible conviction. It is also the same principle being used by the Venezuelan National Assembly to justify the inclusion of regional institutions in its efforts to remove Maduro from office.

South America’s Place in the World

South America is physically far removed from major trade routes in the Northern Hemisphere. The Panama Canal has helped bring trade routes closer to South America, but the fact remains that the continent is rather isolated from Europe and Asia. While the ramifications of major geopolitical events affect the global system, some areas are more affected than others. South America remains very physically separated from the chaos of Eurasia, which is plagued with unrest and economic crises. Therefore, South America generally has little influence in Eurasia’s events, even though it often feels the consequences of the fallout. In an attempt to gain more influence in geopolitics, South American countries have consciously sought out ways to insert themselves more in the international system – finding ways they can participate and weigh in on global issues.

The idea of geopolitical insertion is a constant in the region’s foreign policies. The regional integration groups – including the Caribbean Community and Common Market, the Community of South American and Caribbean States, the Southern Interior Construction Association, UNASUR, Mercosur and the Pacific Alliance – serve as instruments for these governments to gain more weight that they can use in international affairs. Larger countries will also make it a point to develop an area of expertise through which they can insert themselves into international issues: for example, Argentina with nuclear energy, Peru with climate change, Chile with mining, Brazil with deep-water oil drilling. Such expertise obviously has useful domestic applications but also provides an outlet for the country to further integrate itself into the international system.

Foreign investments and commodity leverage also provide South America with an opening to make connections with the rest of the world. In recent years, China has been instrumental in funding major infrastructure projects in the region, including power plants, hydroelectric dams and railways. In return, China secures access to raw materials produced in South America and, to a lesser extent, markets for manufactured goods. These investments have been key in countries like Argentina, Venezuela and Brazil, which are often viewed by traditional investors as risky or destinations that are difficult to operate in. India is also attracting the attention of South America as a country that is capable of providing investment, has a high demand for raw materials and produces desired goods like pharmaceuticals. Brazil has also worked on developing commodity trade ties with Middle Eastern countries, particularly in terms of Halal food projects. In return, Brazil gets investments as well as a new market for its manufactured goods. Mining and hydrocarbon production have also attracted a wide range of international investors, including those from the U.S. and Canada. These initial investment and business ties can be a springboard for South American countries to further develop their ties with states outside the region.

However, this separation from the rest of the world has helped foster a certain degree of regional stability. To be fair, the region does have its own internal stability issues; drug trafficking, conflicts with indigenous groups and corruption are all significant problems. However, it currently does not face the kind of threats that many Eurasian countries must confront, such as invasion by a foreign military or assault by an Islamic State-like terrorist group. The region’s internal economic and political crises appear to be less severe and more manageable than the mounting pressures on European countries. At a time when most of the world – especially Eurasia – finds itself in chaos, South America currently stands out from the rest of the world for its relative stability.

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