Iran, Russia, China beat a path to Latin America's door

Recent visits to Latin America by China's Hu Jintao and Russia'a Dmitry Medvedev underscore how sometime US rivals are competing for business and geopolitical influence in the US's backyard.

By , Staff writer , Correspondent

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    President Luiz Inácio Lula da Silva (l.) of Brazil shook hands with Chinese President Hu Jintao during his visit to Brazil earlier this month. Russia and Iran are also competing for political and business interests in Latin America.
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Latin America suddenly finds itself with many suitors.

In the same week, Chinese President Hu Jintao was in Brazil hammering out investment deals and Russian President Dmitry Medvedev was in Argentina, taking the first such trip by a Russian head of state before going on to Brazil for a meeting of emerging world economies known collectively as the BRIC (Brazil, Russia, India, China) countries.

And if that weren't enough, after inking a major military deal with Brazil, US Secretary of Defense Robert Gates set off on his own Latin American tour, strengthening ties with allies and referencing the budding friendship between Iran's president, Mahmoud Ahmadinejad, and the region.

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Latin America is now one of the most popular belles of the global economic ball, with countries vying for its commodities and friendship. Many say the new attention is a good thing. It has helped buoy several economies even during the worst of the global financial crisis.

But there are growing questions as to whether China's huge appetite for soy and iron ore, Russia's vigorous sale of weapons, or Iran's search for allies in the Western Hemisphere is ultimately good for the region – and whether the United States is missing out.

"One dynamic we are beginning to see is resource competition between China and other external powers in the region, when we are used to the US telling everyone to keep their hands off of Latin America," says Evan Ellis, a professor of national security at the National Defense University in Washington. "There is new engagement in the region, and the emergence of competition between multiple outside players."

China, Russia lead race

Leading the race for commodities is China. On this visit, and on a previous trip to Brazil in 2004, President Hu sought to secure access to raw materials critical to China's growth. (Hu was also supposed to visit Venezuela and Chile but cut his trip short after a major earthquake in China.) China became Brazil's No. 1 trading partner in 2009, taking the spot from the US, with trade between the two surging from $6.7 billion in 2003 to $36.1 billion last year, according to Brazilian government figures.

Meanwhile, Mr. Medvedev's visit to Argentina to discuss deals on nuclear energy, space, and transportation, among other things, came as Russia boosts arms sales to Venezuela and others in the region. Earlier this month, Russian Prime Minister Vlad­imir Putin was in Venezuela to discuss a series of deals that could top $5 billion.

And as Russia and China compete over markets, Iran's Mr. Ahmadinejad is finding a welcome platform in several countries in Latin America. His friendship with Brazil's President Luiz Inácio Lula da Silva, who will visit Tehran in May, is particularly important to Ahmadinejad since the South American giant supports Iran's nuclear program.

Geopolitical threat to US?

Secretary of Defense Gates sought to play down fears on a trip that included Peru, Colombia, and Barbados. Gates said Iran's friendships in the region are only for show. "There is an element of distracting their own populations from the difficulties that they have by … trying to strut around the world stage," he was quoted as saying on the US Defense Department website.

But if such alliances in Latin America don't represent a geopolitical threat to the US, they may highlight a lost opportunity for US business. "Domestic politics, historical baggage, and sensitivities between Latin America and the US really stand in the way of the US taking advantage of opportunities in the region," says Michael Shifter, the president of the Inter-American Dialogue in Washington. As the US is stuck on issues such as energy, immigration, and trade, "China and Russia are completely unburdened by domestic political constraints."

Still, if the US is missing out, is all the attention good for Latin America?

Economic growth engine

Countries are buying arms to modernize armies at the right price from Russia, but some worry about the destabilizing effect of an "arms race" in Latin America. In terms of markets, says Christopher Sabatini, editor in chief of Amer­icas Quarterly in New York, Latin America's partnerships around the globe kept it afloat during the recent economic crisis.

"The attention is good because it provides an engine of economic growth," he says. The region overall is expected to grow by 4 percent this year, he says, and "a large part of that has to do with China's rebound."

But Mr. Sabatini and others say questions are emerging over whether this is simply the economic imperialism – exploiting nations for cheap commodities – that the US was condemned for in the last century. "China, in the name of being a leader of the third-world movement, is saying, 'Hey, we're helping you out by buying your commodities,' and then they are selling back ever-higher-value manufactured goods," says Mr. Ellis. It boosts economies in the short term, but keeps them vulnerable should commodity prices drop.

Rodrigo Maciel, executive secretary of the Brazil-China Business Council, says that Brazil must wake up to the idea that China has a massive internal market that is, so far, not being tapped.

"We only sell primary goods, but that is because Brazil doesn't have a strategy for China; we don't see it as a consumer market," Mr. Maciel says. "We need to learn more."

Related stories:

The rise of China and the fall of the US's Monroe Doctrine ("Hands off South America, Europe!"), in particular, have given the region new global importance. But are its new partners simply the latest economic imperialists?

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