Friday, December 29, 2006

Castro, Chavez and China

Castro, Chavez and China
Why leftist ideology is no impediment for market capitalism in Latin America
Michael Werbowski
Published 2006-12-29 05:43 (KST)

Castro's ill health and the future of the Cuban revolution are material
for much of the media speculation these days. His legacy and the future
of Cuba will be one of the big stories of 2007.

However in hindsight 2006, besides being the year of his sad and
inevitable departure, has been all in all an excellent one for leftist
leaders in Latin America. Nicaragua, Equator, Bolivia, Venezuela have
all electorally shifted and adapted to a greater or lesser degree to
"socialism light": a new 21st century style of socialism geared to the
age of globalization. On a more sobering note, Mexico for its part is
tilting left yet risks being torn asunder by a fiercely polarized
political landscape in the post electoral period.

Chinese Communism with Capitalist Salsa Comes to Latin America

The "new left" in the region is modeled not so much on the old Marxist
hardliners' hackneyed and worn revolutionary rhetoric. It's far more
practical and its guiding principles come not from Moscow as during the
Cold War but from Beijing. The model for growth and progress even under
the red banner of a workers' paradise is a state-run society according
to Chinese capitalism. To the dismay of their more democratic rivals
like India, the Chinese have shown the world that a state planned
economy can be run on capitalist free-market precepts very profitably.

China much like the Soviet Union of yesteryear is today, without doubt a
great military power. Yet unlike the defunct Soviet empire, however,
China is a manufacturing superpower as well. China makes old capitalist
nations (and Latin America's former colonial oppressors) cower with
fright when they compare their growth rates to that of the mighty dragon's.

China for all intents and purposes is the world's factory. With that in
mind, the Communists, "caudillos" and strongmen in Havana and Caracas or
even Managua can only emulate with great eagerness this successful
economic model. China can export its socialism with a free market flavor
to Latin America. In return this region so rich in natural resources
such as petroleum and minerals can return the favor. Chinese oil
companies are already doing business with Cuba by prospecting for oil
off the island's coastline. The U.S on its side, can maintain a
stranglehold over Cuba with its embargo.

But Havana seeks energy self sufficiency and has oil from Venezuela and
investment cash from China to keep its "booming" economy going. For his
part, Hugo Chavez has willingly spurned Washington but not without
courting Chinese business partners beforehand. He obviously prefers to
have China, a more ideologically compatible partner, as his major client
for its oil exports. But geography and distance makes oil exports
eastward expensive.

Chavez, despite his impassioned revolutionary rhetoric, is a "venture
capitalist" at heart; he looks to China for entrepreneurial inspiration.
But on the other hand, he seems to genuinely want to redistribute the
fruits of prosperity (mainly sourced from oil revenues) to his people.
He has so far done this successfully.

Other Latin American leaders recently elected over the course of 2006
might turn away from their rational marketplace in the U.S and Europe to
China as their new client for their oil and gas and mineral exports as
Chavez has done recently. This reorientation or realignment away from
the North American export markets towards markets in China and the Far
East is perhaps one feature of Latin America's 21st-century style of
socialism and one of the most important geo-political phenomena of our

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