Tuesday, June 06, 2006


I believe it was Mario Vargas Llosa, the famous Peruvian writer, who, while attending a literary gathering in Madrid, said; “In literature, reality is a lie and fiction is the truth”.

This quote came to my mind while writing a comment on a very interesting Venezuelan blog (link on this page) and before I knew it, I had written a full and very long article.

I have indicated before that the future of America will not be found in far away lands. The future of America is here and now, and it is called Latin America. A region that we have neglected for far too long and that we have treated with very little respect

Regardless of what we do today (Immigration laws, fences, etc.), the United States of our children will be a little country, a little salsa and a little blues.

Therefore, it is time to wake up, drop the "Know nothings" attitude and start working to make the best out of it.

The following article belongs to the realm of fiction and, since literature and politics are twin brothers, I will leave up to you to decide how truthful it might be. Enjoy!

After reading many comments about Chavez I have concluded that people give him far too much credit. Maybe we should try to explain Chavez from a new and different angle.

It is most likely that in the coming years the world will reach what has been called the "Peak Oil" breaking point. This is, the point were the growth rate of oil consumption outpaces the growth rate of oil reserves. In economics this point is also known as the point of inflection.

The most conservative annalists, including Dick Cheney, Vice-President of the United States, have acknowledged that this will create a 3% annual demand/supply gap in the oil trade.

We should remember that the oil crisis in the 70’s was generated by a temporary and speculative demand/supply gap of 5% and that this was enough to send oil prices up 400% and the world economy into a tail spin.

Moderate and liberal annalists believe that this gap will be more like 7% the first and 10% the latter though there are some that have utter the figure of 13%. This is, 7%, 10% or 13% every year from “Peak oil” forward.

Of course you do not have to be a brain surgeon to realize that, when, rather if, this happens, the consequences of even the moderate predictions to the world economy are going to be mind boggling. This also begins to give us an insight as to why is the United States spending over 300 billion Dollars in Iraq.

Fidel Castro, whom I do not know and therefore can not objectively give an opinion about how intelligent he might be, seems to be at least pretty street wise and very politically savvy. He certainly is aware of the catastrophic consequences that “Peak Oil” could bring to the Cuban economy.

I am sure Fidel Castro has also realized that Chavez fits perfectly into that very spicy Latin American say, full of popular wisdom, that reads; “nada es mas peligroso que un bruto que piensa” (nothing is more dangerous that a thick who thinks).


In his recent visit to England, Chavez was quoted by the British press as saying that while flying to London he decided to give Fidel Castro a surprise call from his presidential plane and that Castro reacted to the call by saying; “only you and Bush can do that”.

This would be nothing else than a typical Latin American private joke between Presidents if Chavez had not mentioned it to the press. Indeed, this was not a joke. It was an intentional comment by Fidel Castro to prep up Chavez who, amazingly enough, believes this comment to be true and therefore, feels compelled to share it with the press.

Fidel Castro’s comment to Chavez is the psychological equivalent of the treat we give pets to make them happy when we want them to learn tricks. With this kind of comment Castro preps up Chavez and makes him feel good while giving him pointers to perform political tricks.

Fidel Castro may not be bright but he certainly is not stupid. He knows that, at this point in his life, all he can look forward to is watching powerless “el ocaso de una utopia” (the sunset of a utopia). He also knows that there is an eager puppy president with major intellectual, ideological and educational limitations sitting in millions of barrels of oil that he needs.

“Peak oil” is not a threat of the future. “Peak oil” is upon us already and it will happen in a matter of very few years.

Castro has been left with no other option but to go about making this puppy believe he can be a Latin American leader, the likes of Bolivar, so he can secure a steady flow of cheap oil for Cuba. Meanwhile, he is negotiating a long term solution to Cuba’s energy problem by signing agreements with China to drill in the Florida straights. Not an drilling agreement with PDVSA but with China.

Castro knows that Chavez is a political mutt that stands no chance against pure breeds the likes of Lula, Uribe, Bachelet, Kirchner, Garcia and Calderon, but, he needs to buy time. He therefore has agreed, most likely reluctantly, to play a last Geopolitical game. A game he knows is a lost cause but a game that might give Cuba enough time to escape the effects of ‘Peak oil”.

From there on, every move is strictly “Geopolitics 101”.

First step: Make sure Chavez gets a firm grip on Venezuela to guarantee the steady flow of cheap oil. The problem is that Chavez is a man of limited skills and intellect; that is why he talks so much and writes so little. Castro knows Chavez can’t be trusted to be successful even with this simple task and that is why there are so many Cuban doctors, communication experts, teachers, advisors, etc. in Venezuela today

I think though, that Castro and Chavez have underestimated the Venezuelan people and I will write a comment in this regard next time.

Second step: Build the puppet. To do this you need a cause and either a friend or foe to provide stature. Chavez fixation with Bolivar was perfect for this purpose and that is how the Bolivarian revolution cause was born. It matters little that from an ideological stand point this cause has absolutely no substance. As long as the slogans are good, who cares if it is “un arroz con mango” (a rice and mango dish).

As for stature, Chavez has no friend (political, intellectual or economic) that could provide him with stature and therefore the logical choice was to pick the biggest foe possible. The importance of a leader is measured by both who are his friends and enemies.

The President of the United States was the absolute logical choice for this, though, I must say, the added benefit of an alienated world due to the George Bush policies was not in their plans.

Third step: Plausible denial-ability. Cover the tracks so Cuba is not perceived as the ultimate beneficiary of this inevitable political blunder and especially of the oil give away. Chavez egomaniac personality and his lust for showmanship made it easy to sell him the idea that he should launch a cheap oil initiative in the Caribbean to make him look good and build a following within the region. And so, the “oil for love” initiative was born.

The smart way to disguise outrageous bilateral benefits is to make them multilateral and therefore available to others.

Fourth step: Build a critical mass. You can't be a leader if you have no followers and Chavez doesn’t have the political skills and/or ideological pedigree to lure any major Latin American country to his Bolivarian revolution.

He will have to buy some key small countries to help him exercise pressure in order to bring the big dogs to the negotiation table.

Mexico is a very important piece in this game but oil alone is not going to cut it with this country. This is why the “oil for love” initiative has been expanded to Central America. Also, this is why Chavez has announced that he is pulling out of the G3 group (Mexico, Colombia and Venezuela).

In geopolitical terms, Central America is Mexico’s area of influence and Venezuela has made a move to step into that area. On the other hand Central America is trapped between a sword and a hard surface because they are highly dependant on oil imports.

It is not likely that any of the Mexico presidential candidates would eventually agree to walk under Chavez shade and it is even less likely, given the strong ties of Mexico and the United States, that Mexico would agree to join the so called Bolivarian revolution. Nevertheless, in face of Mexico’s immigration problems in the South border, Mexico might be willing to let go the region if Venezuela stirs up conflicts in those countries.

If Calderon is elected president of Mexico though, things will get rough, because he is not likely to give up any of Mexico’s influence in the region.

Panama is a different story. Panama is in Colombia’s area of influence and, though a small country, it is a very important piece in the game. Pulling out of the Andean Pact was a move to put pressure on Colombia as opposed to the other members (Ecuador, Peru and Bolivia). Colombia’s trade with Venezuela is very strong and certainly most important to the Colombian economy. Uribe, on the other hand, is a very pragmatic politician and though there is no chance he would join the Bolivarian revolution, he might be willing to let go Panama to secure his trading rights with Venezuela. Uribe’s statesmanship will be tested during his second term. Colombia is also dependent on foreign oil and I would not be surprised if he starts to build closer ties both with Mexico and Ecuador as a contingency plan.

With all these moves, Chavez has done the ground work to make a group of reluctant but highly pressured Ivy League countries join him in his so called Bolivarian revolution. This doesn’t make any difference from a political and even Geopolitical stand point but the puppy president is now going to have a cheering crowd to make him feel happy (another psychological treat).

As for Ecuador, I have to say that I am amazed at how masterfully they are playing the game. Ecuador knows the US is in Colombia for the long run and that Ecuador stands to gain from that relationship.

Recently they signed a number of oil trade agreements with Venezuela but indicated that this is as far as they are willing to go.

Quietly and very business like they have reclaimed ownership of the oil industry and are negotiating better terms with the oil companies. Most likely, the outcome of these negotiations will provide Ecuador with much needed additional revenue and more important, badly needed additional US investment in their oil industry. After all, Colombia is an ally and when “Peak oil” hits, Ecuador will be entrusted with covering Colombia’s back.

While the Bolivarian revolution has now managed to have some cheerleaders and even a groupie in Bolivia, it needs the big dogs if it wants to have any credibility.

Evo Morales land slide election in Bolivia was a lucky punch. While he was a strong contender in the Bolivia election, no one though he could win by such a large margin. Chavez could not have asked for a more naïve and clueless president though.

He has moved fast and used Bolivia to put pressure on Argentina and Brazil who, in a joint venture with Spain, were the largest investors and operators in the Bolivian oil/gas industry. Bolivia is rich in natural gas and this resource is both critical and vital for Brazil, Argentina and Chile.

Both Lula from Brazil and Kirchner from Argentina had shown some interest in Chavez before. Their interest though was to use him themselves to put pressure on the United States and not to follow him. After the Bolivia fiasco, I am sure they now realize that Castro has a tight grip on the mutt and that he is not ready to share his puppy.

There is an old say in Peru that reads; “God is Peruvian” and that might very well be true. It was not until recently that Peru found substantial reserves of natural gas in Cuzco to make the country self sufficient from an energy stand point and to allow them to sail through “Peak oil” unharmed. The reserves are not big enough to tempt Brazil, Argentina and Chile but they are certainly good enough for Peru.

This was an election year in Peru and Chavez had his sight placed on a retired army lieutenant called Humala who has the same limitations he has. A “wannabe” politician (“Ignorance is certainly daring”) who happens to be as naïve and clueless as Morales in Bolivia. The front runner in that election was a conservative lady, Lourdes Flores, who provided an excellent platform to pit up the poor against the rich and get Humala elected.

Latin American politics are unpredictable and at a wink of an eye conditions can change dramatically. In the Peruvian race, a candidate considered “un golpe” ( a long shot) suddenly started to grow in the polls and knocked out the front runner to take second place in the general election and the right to go up against Humala, who came in first, in a run-off election.

Chavez went bananas and rightly so. He had openly supported Humala and poured significant money into his campaign and now was facing the possibility that the next president of Peru could be, none else, than Alan Garcia.

Alan Garcia is a very smart politician and he is also very good at training pets. During the campaign, he made some comments about Chavez to the press, that he was certain would bring the feisty Venezuelan into the race. Chavez took the bait and started attacking and insulting both the current president of Peru and Alan Garcia without realizing that by doing so he was undermining Humala’s chances to get elected.

Peruvians, though grateful to Bolivar, like to say that the last “Aventurero llanero” (Adventurer from the low lands of Venezuela) who passed through that country ended up splitting the country in two; Peru and Bolivia. Before that, Bolivia was known as “Alto Peru” and was part of the Peruvian territory; hence, the stronger the attacks from Chavez against Alan Garcia the higher the support from the people for this candidate.

Things got so bad for Humala due to Chavez attacks, that he had to come out and publicly ask Chavez to shut up. By then the damage had already been done and Humala was history.

Chavez has declared that if Alan Garcia is elected president of Peru he will cut diplomatic ties with that country and I believe he will do exactly that. The problem is that this desperate move is just too little and certainly too late.

I am not going to mention any of the accusations that have been raised against Alan Garcia because I learned long ago that, in politics, both in the US and Latin America, it is very easy to use the press to make accusations and very difficult to prove a negative (I did not do it). So, unless convicted, which also rarely happens to a politician both in the US and Latin America, I will limit myself to be critical about his political decisions and the consequences.

Further, for all intent and purposes, it matters little what Alan Garcia might have done in the past. What matters is what he is going to do now.

Alan Garcia knows now that the geopolitical game is not a soccer game were everyone is screaming to each other for the ball and making fancy plays to make the gallery roar. He knows it is a game played in a peaceful setting, by smart people and that every player has 40 minutes to think about their next move and the probable consequences of such move further down the game. Garcia may not have changed, but he certainly has learned.

Chavez is right in being scared of Alan Garcia. He should be very scared. In a single election, Chavez nemesis has been born and the initiative in the Latin American geopolitical game has changed sides.

Alan Garcia is a seasoned, vicious and relentless politician. He is young, willing and certainly able to go up against Chavez and Castro. He is a pure breed with impeccable ideological credentials since he is the political heir of Victor Raul Haya de La Torre, a Peruvian intellectual who founded the APRA party; one of the oldest socialist movements in Latin America and a party with a historic and undisputed commitment to democracy.

As for stature, Alan Garcia has all the right connections.

He literally loves Colombia and believes it to be his second country. His ties to this country, as well as those of the APRA party, run very deep. He was exiled in Colombia during the government of Fujimori as was Haya de la Torre long ago before him. Uribe may be a little too conservative for his taste but they are both pragmatic politicians and will get along fantastically well.

As for Brazil, Lula da Silva is one of Alan Garcia’s oldest friends. He knows Lula since his days as a union leader and ideologically they are indeed look-alikes.

Alan Garcia’s relationship with Argentina and for that matter, the relationship of every Peruvian with Argentina, is one of brotherhood. Peruvians consider themselves forever in debt to Argentina and especially to Don Jose de San Martin, the Argentinean general that liberated Peru from Spain. Further, Alan Garcia is married to an Argentinean, Pilar Nores, who is highly regarded as a lady among ladies both in Peru and Argentina.

Since the Pacific war the relationship between Peru and Chile has always been rocky. Nevertheless, if there is a politician that can bring these countries together that is Alan Garcia. The APRA party has deep roots in Chile. Many of their leaders were exiled at one point or another in Chile and married Chilean ladies. Also, from an ideological standpoint, Garcia and Bachelet, Chile’s president, certainly think in the same wavelength.

Mexico is the only weak spot for Garcia but he knows that country well. Ties between the APRA party and Mexico are also strong. After all, it was in Mexico that Haya de la Torre wrote the founding manifest of the APRA party. If Garcia is able to pull Calderon/Obrador away from the demanding Mexico/US relations and pay attention to Latin America they will be on the way to a great relationship. I have the feeling that either Calderon or Obrador will indeed give Latin America a higher priority in Mexican foreign policy.

Any way, Chavez days are counted. Alan Garcia will have a major impact in his Bolivarian revolution and most likely even in his political future inside Venezuela. On the other side, Garcia knows he is a young gun and that in politics there are rules. He will act as the point man for the other presidents while they remain behind the curtain and will certainly not step into anyone’s turf and/or move them out of the picture.

The United States in turn will have to reach out to him and that is going to take some fine work. Fine work indeed, because, for some ridiculous reason that I do not understand, the US has always been scared of the word socialism.

In the Peruvian election we were supportive of the conservative candidate and that was a mistake. Not a big mistake but certainly a mistake.

The US is good at playing geopolitical games but we definitely have a clumsy style and that is why every move we make is so expensive.

The British in turn are the real masters of the game. They have over 500 years of experience and as a matter of fact I think it was them who invented it.

Throughout history they have accomplished amazing things and have always either created or managed to continue to have influence through some of the most enduring conflicts in the world. More importantly, they have always managed to do so without having to pay and even making a profit.The US in contrast is far away from this level of proficiency.

Most Cubans in Miami are under the impression that Fidel Castro is a problem that the US doesn’t have the guts to face. Others, particularly in Latin America and certainly the puppy president, think that he is larger than life and brilliant because after challenging the US he is still in power.

Both arguments are flat wrong. Fidel Castro exists because we want him to exist. Castro works for us; he is our puppy. We have been able to constrain him to a maze similar to the one used for hamsters and, though reluctantly, we get him to do what we want by opening or closing little political doors. The best about this is that we are not paying for it. As I said before, we are a clumsy but we are also fast learners.

In this case, he is doing exactly what we want him to do and has been able to lure the puppy president to serve our interests. In the Latin American geopolitical game we, like Castro, also need to cover our tracks so that it is not obvious that we are the ultimate beneficiary of the things to come. Maybe the word need here is a little too strong for what we mean. In fact, it is more like, we want to do it, so that political wounds inflicted in the process can heel sooner.

Castro is doing a terrific job by making the puppy believe he can be a regional leader and having him stir things up in Latin America. We, in turn, have already started the propaganda machine to back his efforts by saying that Chavez is destabilizing the region and a threat to democracy.

When “Peak oil” hits the fan every country is going to run for cover. The world is going to enter into a political time gap. A sort of political time/space continium were no rules apply and, every major power will use that cover to do whatever is necessary to secure access to the energy resources they need.

When we first moved into Iraq we were selfish and wanted Iraq for ourselves and our British partner. That generated a reaction from some of our allies and that is why Germany, France and Russia opposed us. Since then, we have agreed to share Iraq with France and Germany and that is why these countries have come around and are now backing our efforts in that conflict. China and Russia, in turn, want Iran for themselves and that is why they are not willing to allow us make a move on that country. That is a work in progress though and we might very well end up killing two birds with one stone. Get control over the oil and over China’s disturbing economic growth. It is amazing how the WMD excuse has served us for that purpose.

Chavez, in a spark of coherence, likes to say that we are going to make a move on Venezuela. That is no news! We do not spend the money we spend on arms to sit back and see our country collapse. He is wrong though, when he pompously declares that we are going to invade Venezuela in order to kill him. That, as the British would say, is pure rubbish. We couldn’t care less about him. We are clumsy but not stupid.

We are just going to take control of all the oil fields and installations in a swift operation backed by overwhelming power, secure the area pretty much like we have in Guantanamo and create a comfortable buffer zone to fight any opposition. We will of course render the Venezuelan armed forces useless and leave the rest of the country for Venezuelans to deal with. Most of Venezuela will not even notice that we are there.

The way we see it, It really doesn’t matter how many rifles Chavez wants to give to the people because we are not going to chase them. His Bolivarian resistance on the other hand will have a tough time trying to survive without money. No oil; no money.

Do not read me wrong, we are not going to steal Venezuela’s oil; we are just going to secure it until we feel that our interests are not in jeopardy. Of course we will pay, whoever takes over the government, a reasonable price for the oil we take. Until the “Peak oil” crisis is over though, we will have, kind of a Panama Canal arrangement, with Venezuela and eventually we will just leave and continue with what has always been a mutually beneficial and friendly relationship.

This is the reason why Fidel Castro knows from the beginning that the whole Bolivarian revolution is going to be a political blunder. He knows that this travesty is as strong as its weakest link. That link is, having control over the Venezuelan oil and, for the US, taking control is indeed a gimme.

During the crisis, Mexico will take care of Central America and the Caribbean, Ecuador, with our help and investment, will look after Colombia and the major countries in the South part of Latin America will be faced with having to take a very tough decision.

Most Peruvians have always been wary about Chile’s military capacity and they are certainly worried now that we are selling them last generation F-16’s. There is nothing to worry about though.

On one side, Chile has realized that the best way to go about Peru is by doing business. It is cheaper, mutually beneficial and the potential is huge. On the other side, a military adventure in Peru would be costly, can end up bankrupting Chile and further, it would trigger another 100 years of uncertainty. Uncertainty is bad for business because, in time, all countries have up and downs and you never know when the other part is going to strike back. Chile still needs to be more liberal when it comes to Peruvian investment but they are on the way of ironing up these issues.

On the other side, we would not let that happen. The US has always been close to Peru and historically, though we have gone through some rough spots, our relationship has been excellent. Peru is not a country with expansion delusions and has always managed to take care of its domestic problems without affecting his neighbors. It is a trust worthy country that believes in fair play and further, it is the largest recipient of US aid in the world.

When “Peak oil” hits though, Argentina, Brazil and Chile will have to switch into survival mode. The only energy resources left will be the ones in Bolivia and therefore they will have to make their move. Evo Morales, following Chavez feverish advice, has already badly damaged the relationship of Bolivia with both Argentina and Brazil and as for Chile, Bolivia doesn’t even have diplomatic relations with that country.

Chile is willing, ready and able to spear head the move to take control over the oil and gas fields in Bolivia since, out of the three countries, Chile is the most energy dependent. Argentina and Brazil will act accordingly and back Chile 100% in this operation.

Though Peru has strong historical ties to Bolivia, they will not make the same mistake they made 100 years ago by backing Bolivia against Chile in the Pacific War. This time, they will most likely join Brazil, Argentina and Chile in their survival endeavor and stand to benefit from a closer alliance with these countries.

Bolivia in turn will have very little say in these events. The Santa Cruz province, which accounts for a substantial part of the Bolivian GDP and territory, has already indicated that they want to separate from Bolivia. El Beni, which is also a very large province, would follow suit if Santa Cruz moves ahead in this direction. Both provinces share a long border with Brazil and from en economic stand point their ties to Brazil are stronger than with the rest of Bolivia.

A “Peak oil” scenario might force these provinces to contemplate the possibility of becoming a new State of Brazil and this country might feel compelled to oblige.

Under those circumstances Bolivia’s economic feasibility as an independent country would be in serious jeopardy and it could rapidly break into pieces with the Pando, La Paz and Cochabamba provinces looking to establish closer ties with Peru and the Oruro and Potosi provinces moving towards Chile. Tarija and Chuquisaca would most likely build ties with Argentina since they already have very strong economic relations.

Evo Morales will go down in history as an inept politician who fell for Chavez comical Bolivarian revolution and brought about the destruction of Bolivia. Chavez on the other hand, could end up in Jamaica writing, or I should say dictating, his memoirs. One thing is for sure, he will not be found in the hills of Venezuela with a gun in his hand.

As traumatic as this might seem, in the long run, this might be better for Bolivia. Historically, regional sentiment in Bolivia, split along the lines of the three main ethnic groups (Aymara, Colla and Camba), has run stronger than national sentiment. This has made Bolivia a very difficult country to govern and the country with more presidents in the world; a real Guinness book record.

Also, it could be good for Argentina, Brazil, Peru and Chile. For the first time in history those countries will share something special with the United States. They would be accomplices in embracing the policy of survival of the fittest and reshaping the Geopolitical map of Latin America to suit their interests.

To lead, you have to be able to endure the moral quandary of harsh decisions and, in politics, it doesn’t get harsher that this. Guilt though, can be liberating and a very powerful force. Once you break with idealism it is easier to deal with reality.

Believe it or not, this could very well be the missing foundation for a new era in Latin America/US cooperation; the key stone for a broad economic and political alliance in the Continent.

As I finish writing, I can not help but remember the following words from Confucius; “may you live in interesting times”. “Peak oil’ has certainly the potential to make our times very darn interesting.

How about that for a new and different angle?

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