How Chavez Eats and Keeps His Cake

The Times is a new daily news venture edited by Ray Hartley, who consistently provides some of the best commentary on where South Africa is headed. They asked me to do a three-part series on the changing global power balance and its implications. This is part three, in which I explain why regimes that are militantly at odds with the U.S. — think Chavez in Venezuela, or even the Islamic Republic of Iran — are able to routinely defy Washington because they have something to offer that Washington needs. (Oil, in the case of Venezuela, and in Tehran’s case, the prospect of stability in Iraq). And what that tells us is that for a host of more powerful and less ideologically committed regimes in the developing world — from Turkey to Brazil, Indonesia to South Africa — there is an unprecedented opportunity to advance their own interest by refraining from aligning themselves with any single bloc, but instead cutting deals with various power centers.

It seems rather odd, by today’s standards, that the United States once cared enough to (at least covertly) seek to shape political outcomes in Australia or East Timor. Even more bizarre, and horrific, the idea that it would sacrifice 50,000 of its own fighting men and kill more than a million Vietnamese in a war whose strategic rationale was based around such strategic objectives as preventing the Soviet Union from having access a deep-water port in the Pacific. The Soviets got Cam Ranh Bay, and it didn’t make any difference to the global strategic equation. And the Vietnamese Communist Party regime is today counted
by Washington as a friend and a good trade and investment opportunity. The Cold War, however, had cast the world in binary terms. “Non-alignment,” as far as Washington was concerned (and Moscow, too) was simply a euphemism for siding with the Soviet camp, and no corner of the planet was exempt from the superpower contest.

Despite its ideological patina, the contest between Washington and Moscow set little store by the domestic political arrangements of potential allies. India, the world’s largest democracy, was closer to the Soviet Union, while generations of Pakistani military dictators have been coddled by Washington. Henry Kissinger forged an anti-Soviet alliance against Moscow with communist China, and in the Reagan years the U.S. even supported the Khmer Rouge in Cambodia because the government that ousted it — and put an end to the killing fields — had been installed by Soviet-aligned Vietnam. Vicious thugs and
kleptocrats all over the world were sustained by their alliance with either Washington or Moscow.

Even the apartheid regime in South Africa could count on the support of the Reagan Administration, because Pretoria was a reliable ally against the Soviets — even willing to commit its own forces in support of U.S. covert action to prevent the Soviet-aligned MPLA from taking power in Angola. The ANC, in Washington’s view, was little more than a cat’s paw for Moscow.

The collapse of the Berlin Wall changed everything, of course; that much quickly became clear in South Africa. The apartheid regime got the message that it could no longer count on U.S. support, and the regime began negotiating with the ANC, suddenly deemed kosher by Washington. The ANC took power in a post-Cold War moment, where abiding by the “Washington Consensus” on free markets and social spending was the only game in
town for a government needing to attract foreign investment to fuel an economic development program.

But the very spread of unbridled capitalism, so vigorously promoted by Washington and enabled by the end of the Cold War, has also brought on a decline in U.S. strategic influence. China’s breakneck-speed growth, for example, has breathed new vigor into commodity markets that had seemed to be dying a slow death at the end of the 1980s.
Industrialization requires energy, metals, timber, fibers, minerals, new food supplies to growing cities, and more. Suddenly commodity exporters found their struggling
export economies of Africa and Latin America, buoyed by new customers with boundless appetites. Had oil remained at around $20 a barrel, Russia would be the same basket
case it was during the Yeltsin era; Venezuela would be nothing like the regional power player in Latin America, while Iran’s regime would collapse at home; and U.S. banks would not be helped through their credit crisis by massive injection of investment from the sovereign funds of the Gulf states.

The principle factor pushing up oil prices up over the past five years has been the demand generated by expanding industrialization, and growth in industrial output has both fueled not only by the spendthrift habits of American consumers, but also by the growing consumer demand generated by economic growth in those industrializing countries where the middle class is rapidly expanding. As global stock markets have teetered in recent weeks, the buzzword in financial capitals has been “decoupling” — the idea that the worst consequences of the U.S. recession, which would traditionally have taken the whole
capitalist world down with it, may be offset by the growing strength of domestic markets in China, India and other “emerging” countries.

The reordering of the global economic picture over the past decade has opened opportunities for countries of the south, both economic and political, which simply didn’t exist previously.

Today, editorialists in the U.S. sniff that African governments are being given too many opportunities to buck Western tutelage on good governance (and on limiting social spending) because China is offering massive loans and investments without the conditions typically attached by Western lenders.

This expanding sense of economic possibility — as well as the declining ability of the West to impose its writ through the application of military force that has been so visible in Iraq,
Afghanistan and Lebanon — has also changed the geopolitical game. When the U.S. demanded support for its position on Iraq at the United Nations Security Council, it made clear to Chile, for example, that a coveted trade deal was at stake if the Chileans refused to back Washington. Same thing with Mexico’s coveted immigration law changes in the U.S. To no avail. Longtime allies defied the U.S. and got away with it, signaling the onset of a geopolitical era in which the nations of the south face unprecedented economic and political choice. It’s no longer a case of choosing between the U.S. or some rival power
bloc. Why not both?

Venezuela’s President Hugo Chavez may dedicate himself to challenging Washington’s influence everywhere he finds it in Latin America, but he also sells the U.S. almost two thirds of the oil he exports to finance his revolution. Today, the smart mid-level emerging country has growing relations not only with the U.S. but also with China, Russia, the European Union and some of the oil states of the Middle East, as well as with Brazil, India,
Turkey and a host of similarly placed nations. Open for business with all, beholden to none.

There was a moment at the end of the Cold War when it seemed that unbridled U.S. hegemony would define the next era. But that moment has passed. “Non-alignment,” or rather multiple alignments, have become the norm in a world without superpower blocs.

This entry was posted in Situation Report. Bookmark the permalink.

7 Responses to How Chavez Eats and Keeps His Cake

  1. liberatemeiexinferis says:

    Hugo Chavez should be given credit for taking the oil revenues and investing in the the common peoples education, health, basic food supplies by keeping inflation in check…most poor class Venezuelans admire and root for him with the same intensity that the elite richer Venezuelans detest him…but good for the people of least he invests in his people and has put in country as a major force to be reckoned with in Lat Am.

    Having said….he is destroying the word left wing by inching closer to demagoguery everyday..that whole vote thing..where he wanted to be President for insulting and shameful for left wingers..this isnt what we fought for…and as much as I understand his anger at the US for trying to overthrow him…this 24 hr rant against the US only shows him to be the oaf that doesnt understand that 50% of Americans dont agree with Bush policies.

  2. gary says:

    i have liked chavez since he said he could smell the sulpher after a bush speech at the u.n.

  3. Spyguy says:

    Friendly Competition is good for everyone on the earth, even if it makes egotistical Americans very uncomfortable.

    It is time for the US to completely re-think its place in the world.

    I think if that happens, Americans will realize that there is no reason for the US to meddle in so many other places on the earth. As a result the US military will get a lot smaller and the US might even be able to work itself out of debt before its economy collapses.

  4. Pat S. says:

    “It is time for the US to completely re-think its place in the world. I think if that happens, Americans will realize that there is no reason for the US to meddle in so many other places on the earth. As a result the US military will get a lot smaller and the US might even be able to work itself out of debt before its economy collapses.”

    Unlikely to happen anytime soon. I don’t hear any of the presidential candidates calling for a smaller military — quite the opposite — nor do I hear them addressing Americans’ lack of personal-saving ethic, with the latter being perhaps a greater problem than the former as it keeps the United States in ever-deeper debt to China. It’s starting to seem more and more like America’s consumer economy is China’s plaything: they’re content to watch us spend ourselves silly on flat-screens and poorly-thought-out wars for now, but will have few qualms about calling that debt back once other markets grow up enough to become a substitute.

    The other thing that bothers me about the growing economies outside the West is that 19th-century Europe and 20th-century America unwittingly set a potentially disastrous example for how to grow an industrial economy: pollute all you want as long as you get that paper at the end of the day. (China’s environment is bearing the brunt of this policy right now.) It’s not like the U.S. has great moral standing to tell other nations how not to build up their economies, but planetary resource strain doesn’t discriminate between political systems or national senses of entitlement.

  5. Realist says:


    “Americans will realize that there is no reason for the US to meddle in so many other places on the earth. As a result the US military will get a lot smaller and the US might even be able to work itself out of debt before its economy collapses.”

    hit the nail on its head. The reason why that path is right in the US’s best interest can be found in Joseph Tainter’s 1990 book “The Collapse of Complex Societies”. Short of time, I will quote from a 2004 review by someone else:

    Tainter’s grand unifying theory to explain the fact that every complex civilisation the world has ever seen has collapsed is: as societies become more complex, the costs of meeting new challenges increase, until there comes a point where extra resources devoted to meeting new challenges produce diminishing and then negative returns. At this point, societies become less complex (they collapse into simpler societies).

    Complexity, writes Tainter, describes a variety of characteristics in a number of societies– many differentiated social roles, a large class of administrators not involved in the production of primary resources, energy devoted to different kinds of communication, centralised government, etc. Societies become more complex in order to solve problems. Herein, however, lies the rub. Since, as Tainter writes, the “number of challenges with which the Universe can confront a society is, for practical purposes, infinite,” complex societies need to keep on increasing their level of complexity in order to survive new challenges. Tainter’s thesis is that these “investments in aditional complexity” produce fewer and fewer returns with time, i.e. as the society gets MORE complex to confront newer challenges, the returns on these increases in complexity diminish. Eventually, the costs of maintaining garrisons (as the Romans found) is so high that both home and occupied populations revolt, and welcome the invaders with their simpler way of life and their lower taxes. Or, agricultural challenges (a massive drought, or degradation of soils) are so great that the society cannot muster the energy reserves to deal with them.

    Tainter’s book examines the Maya, Chacoan and Roman collapses in terms of his theory of diminishing marginal returns on investments in complexity. This is the fascinating part of the book; the disturbing sections are Chapter Four and the final chapter. In Chapter 4, Tainter musters a massive array of statistics that show that modern society has been facing diminishing returns on investments in complexity. There is a very simple reason for this: we solve the easiest problems first. Take oil, for example. In 1950, spending the energy equivalent of one barrel of oil in searching for more oil yielded 100 barrels in discovered oil. Now, the same investment yields 5. The per-dollar return on R&D investment has dropped for fifty years. … When a new challenge comes, Tainter argues, society will eventually be unable to muster the necessary resources to deal with the crisis, and will revert– in a painful and unhappy way– to a much simpler way of life.

    In his final chapter, Tainter describes the modern world’s “arms race of complexity” and makes some uncomfortable suggestions about our own future. In an age where, for example, the U.S. invasion of Iraq has yielded net negative returns on investment even for the invaders (where’s that cheap oil?), … the historical focus of Tainter’s work starts to become eerily prescient.

  6. Dag says:

    Is there a way to become a content writer for the site?

  7. hey says:

    I know this web site offers quality dependent articles and other material, is there any other web page which presents such information in quality?|

Leave a Reply

Your email address will not be published. Required fields are marked *