UNASUR and the Decline of U.S.

Hegemony in Latin America

Aaron Caffarel

INTL 4003.003 Dr. William Rowe May 9, 2012

Abstract:

This paper will discuss the dynamics of the declining role of the United States of America in Latin American affairs coupled with the new influence of a rapidly growing Brazil and the new supranational organization of UNASUR (Union of South American Nations). Due to the fears of a potential domino effect of Communism sweeping across the world, this region was largely dominated by the United States during the Cold War period. Since the collapse of the Soviet Union, the need of a hemispheric sphere of influence has waned, and a more conciliatory and cooperationist foreign policy has emanated from Washington, D.C. toward the region. This work will analyze the economic and diplomatic implications associated with transitioning from United States hegemony and the dominance of the Organization of American States (OAS) to participation in UNASUR and the potential dominance of Brazil, all through the lens of historiography. It will delve into the true intention of American intervention in the reason, and whether an idealist or realist intention serves as the driving force. The economic analysis will involve nations capacities to compete on the global stage and the potential for emergence of a common market that is largely led by Brazil. While Latin America has traditionally been relegated to the periphery of the global economy, an emergent Brazil may serve as a springboard for the region to enter the global arena as a legitimate competitor.

Key Words: Hegemony, Integration, Modulation, Conjecture

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UNASUR AND THE DECLINE OF U.S. HEGEMONY IN LATIN AMERICA Since the fledgling days of the experimental democracy that would become the United States of America, its citizens have constantly looked beyond the borders to resources that belonged to others. Upon establishing themselves as a nation capable of overcoming the external threats of Great Britain and the internal threats of the Native Americans, Manifest Destiny took root. This reckless, far-fetched, and impossible notion was for the United States to acquire all territory between the Atlantic and Pacific Oceans in order to dominate the mid-latitude region of the continent. The nation would not only accomplish this task, but also would catapult onto the world stage as a superpower by the end of the Second World War. Following this emergence, the United States focused on power projection and on the creation of a sphere of influence rather than the actual acquisition of land. Latin America fell easily under this hegemonic sphere and largely remains so today even following the collapse of the U.S.S.R. and the elimination of the two-superpower world. Many believe the United States to be in a period of decline as the worlds sole superpower. They assert that the economic and political advances of Latin America, the rise of Brazil as a major competitor on the world stage, the insertion of China into the region, and the formation of UNASUR (Union of South American Nations) are converging to evaporate the role of the United States as the general hegemon over Latin America. History of American Involvement in Latin America Initial Economic and Political Projection Since the beginnings of the 20th century, the United States has exerted economic and political dominance over Latin America. In terms of political projection, the United States has issued statements and taken action as far back as the issuance of the Monroe Doctrine and the 1904 Roosevelt Corollary. During the first half of the 20th century, as the United States rose to

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international eminence, power was projected through varied acts of gunboat diplomacy and various interventions that sought to live up to the Monroe Doctrine and its Corollary. The United Fruit Company, a conglomerate of the former Boston Fruit Company and a Minor Keith banana business, wielded significant power in Colombia in the first thirty years of the 20th century. Due to the companys ability to delve into almost every conclave of the production matrix, it was known as El Pulpo, or the Octopus. It owned considerable amounts of land, was one of the leading employers in the nation, and even called in the Colombian army during a particularly devastating strike in 1928 (Meade 2010, 180). This company exemplifies the determination of American companies to utilize Latin America as a resource for cheap labor and raw materials. In Nicaragua, this same company essentially controlled the government. When the Nicaraguan President, Jos Santos Zelaya, impeded the ability of the United Fruit Company to govern to the fullest capacity, then American President, William H. Taft sent in the Marines to depose Zelaya and install a more cooperative puppet. The marines stayed for decades due to the failure to find someone to appease both American commercial interests and Nicaraguan nationalist interests (Martin 2011). Establishment of a Core-Periphery Model By the end of the first half of the 20th century, the United States had fulfilled the basic requirements by to become a core in terms of the global economy. The core-periphery theory exemplifies the dichotomy that exists in the global economy between successful and expanding economies that require materials to continue success and expansion, and those that provide the successful economies with necessary resources (Friedmann 1966, 5-19). The complementary theory of dependency argues that underdeveloped economies serve the function of neo-colonial dependencies of developed economies, in which the developing nations transfer their wealth to

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the developed nations with negligible compensation, profit or general benefit (Choi 2004, 7584). By the middle of the 20th century, Latin America was undoubtedly the periphery to the core of the United States. Both American corporations and the American government took action to promote the economic well-being of the United States and to ensure that the steady rise of power and influence continued unabated. Mostly Realist Political Involvement Post World War II The second half of the century would induce ever increasing participation of the United States in the politics of the region due to the Cold War contrast between the U.S. led-West and the U.S.S.R.-led East (Meade 2010, 193). Throughout the Cold War, the United States produced conflicting actions and rhetoric in regards to Latin America that would mold the region for the future. In John F. Kennedys inaugural speech in January 1961, he promoted an idea called the Alliance for Progress, which was meant to encourage economic development in Latin America in order to further spark democracy and better the chance for social justice. On the surface level, American presidents tended to lace their comments and foreign policy initiatives with traces of idealism. These idealistic principles and notions conveyed that the United States wished to be cooperationist with the regions governments in order to establish a non-zero sum game. The theory of idealism promotes the idea that governments as well as the individuals who run them are inherently good and wish for the betterment of humanity (Clare 2012). While rhetoric spoke of this theory, the actual activities of the United States were very much realist in nature. The theory of realism argues that states are inherently self-centered and only wish to promote their own agendas and to secure that which their people need (Clare 2012). It is clear the United States pursued a realist track in many of the nations activities in the region during the Cold War. Nicaragua and Chile serve as prime examples of these actions (Martin 2011).

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Chile between 1950 and 1964 was a beacon of democracy and hope for the entirety of Latin America. The economy began to fail under the presidency of Eduardo Frei, and Chileans rallied around Salvador Allende, a Socialist who promised reform and prosperity for the nation. Stringent Socialist policies began to be implemented as his administration attacked foreign owned companies and redistributed wealth among the population. The middle and elite classes of the population began to tremble at the possibility of losing their post-colonial way of life they had enjoyed under more capitalist administrations. They therefore turned to the United States for intervention and assistance to restore Chile to what it once was. The Central Intelligence Agency (CIA) then financed opposition movements against the Allende administration. The military, upon receiving assistance from the United States, seized the government and installed Augusto Pinochet to the presidency. The reign of Pinochet exhibits one of the most brutal dictatorships the region, and possibly the world, has ever seen. In Nicaragua, the American Marines were finally able to install a pro-western leader named Anastosio Somoza. Anastosio and his son Tacho, who would succeed him following his assassination, imposed unprecedented brutality and dictatorship in the nation. By the time the Somoza family was overthrown, they had accumulated twenty-five percent of the nations wealth with another ten percent owned by their National Guard commanders. Their government was not only supported via rhetoric by the United States, but was also supported through special military training opportunities at West Point (Martin 2011). These insertions into the sovereignty of Latin American governments certainly do not align with the idealistic rhetoric of John F. Kennedy in 1961. Rather, these calculated actions exhibit extreme examples of realism. The United States, in its quest to best the U.S.S.R. as the worlds sole superpower, intervened where Communism appeared to be gaining momentum. These interventions deposed democratically elected governments and in many cases

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replaced them with cruel dictatorships. While on the surface, the main tenets of the United States world projection were words of idealism promoting democracy and capitalism, the tenets of realism governed the activities and missions undertaken. The idealistic rationalization of the very realistic interventions of the United States broke under the administration of President Jimmy Carter. This administration upheld the idealist rhetoric with action. In 1977, he appointed Andrew Young as an ambassador of good will and sought to curb abuses of human rights wherever they existed, particularly in Latin America. The dictators of the region were disturbed by the tone emanating from Washington, as evidenced by one particular El Salvadoran military officer. He questioned a stationed American general as to why foreign aid from the United States was no longer flowing into the El Salvadoran government. The American general responded that a Republican would soon take office and that all would be restored to normal (Rosenburg 1991, 253). As the American officer suggested, a Republican would indeed shortly succeed Jimmy Carter, and the return of realism in actions such as aid to dictatorships was imminent. Ronald Reagan immediately acted to quell the sparks of socialism that were threatening in El Salvador, Nicaragua and Grenada (Martin 2011). Not long after these events, the United States engaged in a War on Drugs against Manuel Noriega of Panama and Pablo Escobar of Colombia. Thousands of U.S. troops and millions of U.S. dollars poured into this effort with minimal overall effect (Meade 2010, 300-303). Historiographical Analysis of Aforementioned History The reality of the history of American involvement into Latin American politics and economics is not always as finite as it may appear on the surface. This history is largely presented and understood as contrasts of exploiter and those exploited, conqueror and conquered, and several more. The state of the United States involvement in the region is, however, much

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more intricate and complex (Joseph 1998, ix-xv). The historical literature between 1940 and 1980 emanated from American historians who focused on the state and diplomatic and economic ties between nations. Subsequent literature stemmed more from Latin Americans themselves, who focused more on decision-making processes of Latin American governments and people. Modern literature still arises from Latin Americans, and concentrates on theories of postcolonialism and post-modernism. This concentration serves to challenge the historiographical lens of the work American historians that has largely written this generally accepted history (Sheinin 1999). In regards to the effects of the United Fruit Company on Latin American communities, for example, Catherine LeGrand finds that they were not quite as devastating and long lasting as originally presented. During the 1960s, Gabriel Garca Mrquez wrote One Hundred Years of Solitude. In this novel, Mrquez describes a place he calls Macondo, which serves to represent areas the United Fruit Company utilized in its quest for profits and expansion. He says Macondo was in ruins. In the swampy streets there were the remains of furniture, animal skeletons covered with red lilies, the last memories of the hordes of newcomers who had fled Macondo as wildly as they had arrived. The houses that had been built with such haste during the banana fever had been abandoned. The banana company tore down its installations. The wooden houses, the cool terraces for breezy card-playing afternoons, seemed to have been blown away in an anticipation of the prophetic wind that years later would wipe Macondo off the face of the earth (Joseph 1998, 334). This account of the apocalyptic consequence of this banana company on Latin America and its communities helped mold the general global sentiment toward this part of history, and thus shaped the writing of this part of history. LeGrand, who traveled this region as part of her research, found that while life was indeed impacted dramatically by the United Fruit Company and the subsequent banana industry, it was not wholly stamped out. Many of the inhabitants of the most effected areas migrated to other areas, and life continued. Her work additionally finds that many consequences were not a direct result of the company, but rather the new banana

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economy as a whole and the unintentional injection of American cultural norms. Because of the introduction of cash, for example, men began to purchase dance partners and political operatives were able to buy votes in local elections. These practices amongst other injections of American economic and political culture largely laid the groundwork for the future corrupt governments of Latin America (Joseph 1998, 333-358). This commentary does not suggest that the United Fruit Company was not cruel to the indigenous population or that it did not yield negative economic or political benefit to the peoples of Latin America. It does, however, make the assertion that the development of the region cannot be over-simplified into having a singular cause such as the practices of the United Fruit Company. This development is a complex function of multiple factors, mostly involving the introduction of norms and practices prevalent in American society and the subsequent application of these norms and practices to mold into Latin American life. Thus, the creation of a unique system and environment for politics and economics in Latin America occurred. During the same time One Hundred Years of Solitude was written, new theories such as the core-periphery and dependency theories were also emerging in academia. Scholars of Latin America immediately applied these very structuralist theories to the history of the impacts of American insertions into the region (Joseph 1998, 333-358). Thus, the grand oversimplification of the development of Latin America began. The decisions of political leaders that dictate the course of history are in many works analyzed through the current political perspective. Since the 1930s, historians such as Julius William Pratt have sought to analyze these decision-making processes, especially those regarding foreign policy, through the public political climate of the time. Due to the fact that the majority of American politicians are constantly in a state of running for re-election, it is logical to deduce that foreign policy decisions were crafted in order to be palatable to the American

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public. Thus, in order to understand the motivations of several Presidents of the United States and other political leaders to insert the nation into Latin American affairs, one must understand the public opinion of the time (Elming 2011, 2-4). The foreign policy agendas of U.S. Presidents during the Cold War were able to be carried out due to the publics fear of an encroaching U.S.S.R., and the desire for American global supremacy. Thus, the public condoned actions that sought to curb this encroachment through any means. These activities, including the support of overtly dictatorial regimes that violated human and political rights and the insertion of American resources of capital, men and infrastructure into these regimes nations would likely not take place in American politics today. No matter the decade or historiographical lens, much of the historical literature concerning American involvement involves discussion on the ever-evolving notion of imperialism, and whether or not the United States has engaged in it. The evolution of the concept of modern imperialism can be segmented into three stages. The first stage was articulated by historians like Julius Pratt prior to World War II, and involves the establishment of an empire motivated by political and diplomatic factors. William A. Williams and the revisionists of the 1960s added an economic component to the equation, and suggested that both politics and economics motivated the desire for an imperial expansion. Finally, scholars including Emily Rosenburg added the final element of culture. Politics, diplomacy, territorial ambitions, the economy and culture could all be utilized in an analysis of the historical actions of American political leaders and their pursuit of a potential American empire (Elming 2011, 12-13). Present Day Political and Economic Involvement Since the collapse of the Soviet Union in 1989, the United States has reigned as the worlds sole superpower. Due to the lack of competition, the need and desire for the

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establishment of specified spheres of influence has evaporated. Thus, attention on Latin America and other former satellite nations of the West has waned. Many describe this new attitude toward the region as benign neglect; intervention into the political and economic zones of the governments has virtually disappeared, and the desire of Washington is to maintain open trade relations for the American economy. Many of the institutions established by the United States, including the Organization of American States (OAS) and the Inter-American Defense Board (IADB) no longer wield significant influence in the region. As the junior senator from Florida, Marco Rubio, states, I also believe that in many respects the United States and its confusing policy toward the region has often created a vacuum that has allowed us to lose market-share in many of these strategic partners that we have in the region, that at a time when other nations around the world are recognizing the promise of Latin America, the promises of the Western Hemisphere, and are more than eager to fill it, while we look elsewhere or nowhere at all (U.S. Congress Feb. 17, 2012). Dysfunction of OAS and IADB According to John A. Cope of the Institute for National Strategic Studies within the National Defense University, the Inter-American Defense Board is practically dysfunctional due to an outdated military structure and lingering anxiety on the part of OAS member states concerning the usage of military forces (Cope 2010, 1). According to analysis prepared by Alex Snchez, the OAS and IADB are ineffective not due to an inability on the part of the United States to effectively support the organizations in question, but rather the tradition of the United States to pursue unilateral goals under the auspices of the organizations, and without the multilateral efforts of the nations involved (Snchez 2008). Ineffectiveness of Foreign Aid Anna Castrillo provides analysis of the effectiveness of U.S. foreign aid into Latin America in the pursuance of U.S. foreign policy objectives in the region. As members of

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Congress declare in various hearings in Washington, America must continue to foster democratic values by building institutions that support those values (U.S. Congress Feb. 17, 2012). The United States has issued foreign aid initiatives in the region since the 1940s, although the full efforts of these programs were not put forth until the 1960s with the rise of Communism and the Cold War. The amount of worldwide aid in 2008 reached an all-time high of $119.8 billion. Despite this massive amount of money pouring into the region, pervasive issues still abound and restrict the ability of certain nations economies to grow and benefit from this aid. Castrillos thesis finds that crony capitalism that runs rampant throughout Latin America causes many of these issues. Without a government capable of true accountability and transparency, the money distributed likely finds its way into the hands of the elite. This misdistribution of foreign aid encourages heightened levels of inequality and poverty. Out of the top fifteen countries exhibiting the highest levels of inequality, Latin America houses ten (Castrillo 2011, 1-5). With the opposite ends of the wealth spectrum pulling in two directions, the middle class teeters on the verge of collapse. A weak middle class inhibits the successful execution of democracy and the promotion of social justice (Gasiorowski 2010). Thus, in many of the regions weak governments, foreign aid from the United States is not achieving its goal in the promotion of democratic values. Castrillo states that [a]s we can see from the results, foreign aid in the region almost has a nonexistent influence on economic growth rates (Castrillo 2011, 38). Due to the ineffectiveness of aid distributed by the United States, the credibility of American foreign policy objectives can be called into question.

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Entry of Alternative Potential Hegemons, Brazil and China Brazil Prior to 1990 The decline in attention on the part of the United States, along with the dysfunction of its surrogate institutions and the ineffectiveness of foreign aid to the region have allowed for others to assert themselves more aggressively than before. The nation of Brazil has stunned many economic forecasters and political scientists by emerging onto the world stage as a potential competitor for regional and global eminence. Since the establishment of the Portuguese colony on the western side of the line drawn by the Treaty of Tordesillas, Brazil has been unique. Besides the obvious characteristics of Portuguese being the spoken language and the conquering nation being Portugal rather than Spain, Brazil also benefits from the unique facets of an impressive economic and strategic location within the continent, a lack of formidable threats against its territorial sovereignty, and a notion of exceptionalism among Latin Americans. While the notion of exceptionalism is normally reserved for the United States, Brazil also lays claim to this tenet as a driving, nationalistic force. Because of this characteristic, many view Brazil as much more comparable to the United States than to her Latin American neighbors (Einaudi 2011, 1). For decades, Brazilian leaders and citizens await the day that their nation will break into the elite group of nations vying for supremacy on the global arena. Carlos de Meira Mattos, the Armed Forces Deputy Chief of Staff stated during his tenure that, We possess all the conditions that enable us to aspire to a place among the worlds great powers (Brands 2010, 6). During the 20th century, Brazil sought to serve as a loyal ally during World War II by being the only Latin American nation to deploy troops to the Italian front. The authoritarian administrations during the latter half of the century sought to break from the dichotomy of the dueling spheres of the U.S.S.R. and the U.S. by forming their own aura of influence through

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power projection into Africa and other third world arenas. She sought to ward off threats of Communism within the region to gain international notoriety. Despite such ambition and capacity for success, dreams outpaced reality. The authoritarian dictatorships prior to 1985 ruined Brazilian credibility abroad and the economy experienced hyperinflation and high levels of debt burden that drained her people. These difficulties have hindered Brazilian progress toward achieving the dream of global supremacy (Brands 2010, 1-7). Thus, by the 1990s, very few would have predicted the miraculous return to economic power that has occurred to date. The Rise of Brazil However, beginning in the 1990s, Brazilian leaders began the process of turning the economy around. From the very beginning, the massive inflation rate was brought under control. The economy is also distinct from its neighbors in that it is much less dependent on exports. With high levels of diversification, the internal market of Brazil with a growing middle class with an appetite for more has driven the economy onward. Several industries within the nation are now leading globally, including the JBS-Friboi company, which has surpassed Tyson Foods in meat packing (Einaudi 2011, 4). In terms of global food security, Brazil already disseminates the largest amount of protein foods. According to Luigi Einaudi, the only reason the food industry is not more lucrative is due to American and European protectionism. This economy is also distinctive in that it exhibits potential for both the production of raw materials through mining in several Brazilian states, and the capacity for industrial output, with the third largest producer of jets in the world. Levels of foreign direct investment have also increased by almost four hundred percent since 2000 (Einaudi 2011, 3-5). With a strong economy built on sound foundations, Brazil is able to project power abroad politically.

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Brazils Strategic Objectives The end goal of Brazil is to achieve a level of systemic impact, which is the ability to shape the global order in meaningful ways [through] the inexorable accumulation of geopolitical weight, but through the resourcefulness of its strategy and diplomacy (Brands 2010, 3). The nation seeks to break from the traditional hegemony of the United States and to serve as an alternative regional leader. Brands argues that President Lula, who served as president from 2002 until 2010, focused his strategy on that which is common for middle powers or those nations not yet at the level of the United States in terms of economic, political and military might and projection. This strategy involves a strict adherence to multilateralism, as the middle power itself does not have the ability yet to engage in unilateralism and coalition building on both the regional and global scale (Brands 2010, 4). On the surface level, Brazil appears to be moving rapidly toward this goal of systemic impact through leading new efforts at regional integration with the successful formation of UNASUR (Union of South American Nations) and the CSD (Conselho Sul-Americano de Defesa/South American Defense Council) (Snchez 2008). Though promising, the effectiveness of the strategy utilized by Brazil is being hindered regionally on several fronts. Firstly, many among the political elite of the nation do not wish to yield political sovereignty and economic benefits to other nations (Brands 2010, 2). Secondly, and partially as a result of that factor, many governments do not wish to succumb to Brazilian leadership due to their preconceived notions of superiority. Colombia, the most supportive ally of the United States in the region, and Venezuela, the socialist alternative to both, also desire to be the recognized regional leaders (Brands 2010, 37). There has also existed a consistent rivalry between Brazil and Argentina that discourages integration (Einaudi 2011, 1). Both Colombia and Argentina have opposed the Brazilian quest to gain a permanent seat on the United Nations

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Security Council, evidence that neither is secure with yielding to Brazil (Brands 2010, 37). Thus, while the Brazilian economy is edging into the top tier of global economies, and while many efforts have been made to project power, Brazils neighbors will likely serve as a heavy deterrent toward the realization of this goal. The Insertion of China With the current vacuum of a superpower present in the region, China has also made significant moves to invest in and to establish a presence in Latin America, both commercially and militarily. The Peoples Republic of China, in its first policy paper analyzing Chinese interests in Latin America, declared that it sought mutual visits by defense and military officials of the two sides [as well as] personnel exchanges (Ellis 2011, 1). In Chinas pursuit for global dominance, its leaders must find and harness access to raw materials to continue to support the massive industrial apparatus, secure a reliable source of food, and establish and protect markets for Chinese exports. Latin America serves as a perfect region for all objectives (Ellis 2011, 4). These objectives all revolve around sustaining the Chinese economy as it drains its own resources concomitant with the continued desire for more industrial output. In terms of greater military engagement in the region, China has maintained a delicate balance of establishing a presence while not invoking the attention of the United States as a potential threat so close to home. According to Evan Ellis, China hopes to accomplish the following objectives with military projection: 1. Building good will, understanding, and political leverage; 2. Creating the tools to protect PRC interests in-country; 3. Selling Chinese products and moving up the valueadded chain; 4. Positioning the PRC strategically in the region; and 5. Reassuring the United States (Evans 2011, 5). These actions on the part of the Chinese seek to employ a new example

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of neo-colonialism by establishing the nation of China as another core to which the peripheral Latin America would yield economically. The effects of this new military projection into Latin America will not be seen in the immediate future as it relates to the current stature of the United States and her foreign policy and security objectives. This injection of Chinese economic and military projection is in the early stages of development, and is similar in nature to the early stages of American involvement with the beginnings of the United Fruit Company. Assuming that Latin American nations will accept Chinese injection as they did with American injection, which is questionable, a number of issues could feasibly appear in the future. If the region or various nations within the region are to destabilize, China may feel pressured to intervene in order to protect her investments. In the event that arms sold to the regions governments fall into the hands of extra-governmental movements hostile to the United States, China could inadvertently become a target of criticism and hostility by the United States. Finally, and most obviously, a deterioration of relations between the United States and China would force the United States to take a greater look at Chinese motivations in the region and would rally remaining support. In the event of said deterioration of relations, Latin America could very well become the center stage for the next Cold War (Ellis 2011, 41-43). Latin American Integration Attempts The goal of acquiring a truly functional militaristic institution of mutual defense for the hemisphere that does not include American leadership has been present in Latin American history since the early 19th century. In 1810, Don Juan Egaa drew up a Plan de Defensa General de toda de Amrica, or a plan for the general defense of the Americas. As Jos Balseiro writes in his novel, The Americas look at Each Other, Egaa llama a una Amrica unida por

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el compromiso de todos los gobiernos constituidos, para contribuir con armas, dinero y hombres, en caso de la ms ligera intencin de ataque o sedicin originada en Europa1 (GriffithsSpielman 2009, 105). The description of this plan exemplifies the desire for collective security with the member nations contributing arms, money and troops in the event of an exterior invasion or attack. Approximately fifteen years after Don Juan Egaa designed his plan, Simn Bolvar, the liberating hero of Latin America, espoused a similar plea for a mutual defense institution. Both plans failed to generate enough attention or political will on the part of the potential member states to even attempt the construction of an institution. This theme of rhetoric with no corresponding actio1n occurs again and again throughout the modern history of the region. It was not until the United States stepped in that more concrete actions took root in the formation of such an institution. In 1938, the Lima Declaration was issued from the Eighth International Conference of American States. This declaration stated that in the event of an external attack on any member nation, all American republics would commit to lend their mutual support, whether it is direct or indirect. The Lima Declaration served as the origins of the InterAmerican Defense Board (IADB). From the beginnings of the IADB, it lacked the actual ability or authority to implement or enforce resolutions to any given continental threat. The Board merely served as an institution to study the matter and to pass along recommendations to other entities. While there were recommendations by Mexico and Colombia to create a Permanent Military Agency that incorporated all defense ministers of the American republics, the United States struck down the notion. Thus, the IADB remains largely the same today: an institution

Egaa calls for a united America through the governments of all constituted governments, in order to contribute with arms, money and men, in the event of the most light intention of attack or sedition originated in Europe.

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with lofty rhetoric and purpose with virtually no capacity to act on said rhetoric and purpose (Griffiths-Spielman 2009, 105-112). Some of the greatest evidence suggesting the decline of American leadership in Latin America through surrogate institutions like the OAS and the IADB lies in the constant issuance of proposals for new institutions of integration. Venezuela has proposed a multitude of new institutions, including the Bolivarian Alternative for the Americas (ALBA), the Trade Treaty of the Peoples (TCP), the Bank of the South, and the South Atlantic Treaty Organization (OTAS). Brazil has proposed and succeeded in forming the UNASUR and the CDS. Ecuador has proposed the Organization of Latin American States. (Varas 2008, 2) The multitude of proposals reflects negatively on the effectiveness of the OAS and the desire of several Latin American nations to find structures and institutions that mold to their needs and objectives, rather than to those of the United States. According to Augusto Varas, The USA is a dysfunctional actor in this space, with a poor record in Latin America. US interventionist, protectionist, unilateralist and coercive policies have not earned it much sympathy in the region (Varas 2008, 5). Further evidence of American influence in Latin America is found in the failure to launch the Free Trade Area of the Americas. (FTAA) The effort began in 1994 with the first Summit of the Americas. At this meeting, all participants signed a declaration to agree to begin negotiations on this Free Trade Area of the Americas within the next few years. Subsequent summits yielded negative results, however, as interest in the initiative gradually declined amidst popular discontent. At the latest attempt to secure negotiations on this free trade zone in Trinidad and Tobago in 2009, prominent Latin American nations including Venezuela and Brazil refused to sign (Feinburg 2009). This level of open disagreement with the United States in regards to regional integration and increased lack of respect has set the tone for the future of the nation in

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the region, and becomes more significant due to the political and economic advances of Latin America over the last few decades. The Economic State of Latin America Latin America has entered into a period of stunning economic and political growth. With Brazil at the forefront, the region as a whole averaged gross domestic product growth of 5.6% in 2010, with Brazils gross domestic product growing by 7.5% in the same year (Crandall 2011, 84). More and more governments are also progressing into democratic institutions of governance with societies and populations pulsating with newly found freedom and success. While Latin America has consistently been shown various methods of governance and structure by the United States and the European Union, the governments of Latin America are now willing to flaunt their successes and to create their own structures and institutions. The dramatic increase in the level of remittances and foreign direct investment (FDI) over the last decade, coupled with the ease of capital mobility in the current system of financial globalization, has allowed for the region to benefit on many levels (Garca Fuentes 2009, 2; Kim 2011) Remittances and foreign direct investment (FDI) into Latin American economies have played a large role in the development of those economies. A remittance is a transfer of money by a foreign worker to his or her state of origin. According to Pablo Antonio Garca Fuentes, a doctoral student in the Department of Agricultural Economics and Agribusiness at Louisiana State University, they are one of the largest capital inflows to developing countries that increase the amount of disposable money for spending on consumption, housing, education and small business formation (Garca Fuentes 2009, 2). The amount of remittances toward developing countries increased by approximately five hundred percent between 1980 and 2003, and served as the second most lucrative form of external revenue by 2003. By 2007, the amount

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of remittances flowing into Latin America and the Caribbean reached $53 billion, the highest for any developing region (Garca Fuentes 2009, 47). Garca Fuentes argues that an increased amount of remittances also increases the markets for certain goods and services. Following this logic further, an increased market for certain goods produced by multinational corporations would yield greater foreign direct investment into these nations exhibiting higher markets. This doctoral student found that remittances correlate to positive economic growth following the aforementioned logic only if the nation in question exhibits a minimal threshold of gross domestic product per capita (Garca Fuentes 2009, 93-94). Thus, remittances produce positive effects on the economy when a sizable portion of the population remains above the poverty level. In these nations, those receiving remittances are encouraged to spend that extra money on luxuries not normally within grasp. In nations exhibiting high levels of poverty, however, those receiving remittances likely utilize that extra money to simply survive, which does not promote economic growth and prosperity overall. FDI into Latin America has also dramatically increased over the last few decades. FDI can be defined as the expenditures incurred by a company in one state into another state in order to either expand the current operations or buy competing companies. Unlike remittances, FDI is almost always associated with positive economic growth. If the host countrys market is greater in size, the probability that a multinational corporation will choose to invest in that particular host country also becomes greater due to a higher likelihood of increased profits (Garca Fuentes 2009, 46-47). Brazil, for example, attracted a great amount of FDI due to the privatization of economic sectors that were previously state controlled. The multinational corporations were thus able to pour capital into Brazils immense economy and market. The nation particularly attracted FDI in the years following 2004, due to increases in the internal market for more goods (Garca Fuentes 2009, 51).

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The increases of foreign direct investment and remittances are especially significant in todays world of eased financial globalization. According to the unholy trinity of the Mundell Fleming model, only two of the three policy goals described are able to be realized at once. These policy goals include exchange rate stability, national monetary policy autonomy, and capital mobility. The world economy has evolved heavily since the mid-19th century, and has exhibited three different sets of two policies since that time. In the Bretton Woods System between the end of World War II and the Nixon administration, the global economy exhibited a fixed exchange rate, an autonomous monetary policy, yet no capital mobility. Following the realignment of this system, however, the world economy now operates with capital mobility, autonomous monetary policies, and a floating exchange rate (Kim 2011). Due to this specific type of financial globalization, the level of FDI and remittances has been able to skyrocket to the overall benefit of Latin America. Political State of Latin America Bolivia: A Test for UNASUR The disastrous state of affairs in Bolivia toward the end of 2008 may shed light on what is in store for UNASUR. The nation underwent a massive crisis of state, in which the government fought against various autonomous regions for both territorial and economic rights to production ownership. The overall social contract inherent in all functioning democracies was placed under fire. A social contract involves the agreement of individual citizens of any given society to accept the sovereignty of the state in order to protect all citizens and to promote a sense of responsibility among the citizens to maintain the integrity of this contract (Tedesco 2008, 1). Massive protests racked the nation as her people struggled to accept the sovereignty of the state of Bolivia. UNASUR immediately held an emergency conference on September 15,

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2008. This meeting occurred only three days following massive killings reported in the region of Pando. The rapidity of action stunned many world and regional leaders, as they had not yet responded to the crisis. The Chilean head of the OAS condemned the immediate action taken, as UNASUR did not consult the OAS before moving to act. This condemnation exhibits the pangs of transitioning from one supranational organization to another, and highlights the question of how closely the OAS and UNASUR will collaborate (Snchez 2008). The Foreign Policy of and Amongst the United States, Brazil and Colombia The relationships between the United States and Brazil, the United States and Colombia and Colombia and Brazil will likely play a large role in the future course of events of the region and in the ability of Brazil and Colombia to project themselves as a potential superpower in future. Once a staunch ally of the United States globally, Brazil has now distanced herself from American rhetoric on many issues. Ever since the administration of Jimmy Carter that denounced Brazilian human rights and potential nuclear abuses, relations between the two nations have never been the same. Following the collapse of the Soviet Union and the end of the Cold War, Brazilian political leaders have firmly believed that the United States stood in their way of global eminence. Thus, there are several instances in which Brazil has publicly broken with the United States on foreign policy (Einaudi 2011, 9). Firstly, the creation of UNASUR serves to replace the American-led OAS as the multilateral institution of regional integration. Secondly, Brazilian foreign policy has exhibited a much friendlier tone toward Iran and the issues revolving around their nuclear activities than the United States would ever emanate. It is likely that Brazilian leaders believe they have a deeper understanding of the qualms of Iran due to their experience with American disapproval of nuclear activities. This foreign policy stance has elicited wide criticism at home and abroad, and most certainly from the United States, who questions the

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capacity of Brazil to maintain a semblance of order on the global stage (Einaudi 2011, 9). It is clear, despite certain foreign policy hiccups that Brazil is to remain a prominent player both within Latin America and on the global arena as well. In terms of Colombia, the United States has long viewed this nation as her foremost ally in the region. However, many indications have pointed to a deterioration of this relationship in recent years. The United States has provided the nation with enormous amounts of foreign aid, which currently stands at $500 million annually (Crandall 2011, 85). Despite this large level of assistance, Colombian leaders no longer serve as American surrogates. In August 2010, a Venezuelan drug lord was caught in Colombia. Despite the call for extradition by the United States, Colombian law enforcement sent the drug lord to Venezuela to await trial. This nation, along with several others, is also not welcoming of Brazilian leadership. Colombia serves as an interesting juncture of diplomacy in balancing relations with both the United States and Brazil. While she will certainly not rid herself of all American assistance and influence, a strategy involving a balance of less dependence on Washington and more autonomy in regional affairs will likely play out. The foreign policy dynamics that are exhibited currently along with those that will be present in the future between the United States, Brazil, and the rest of the region can be analyzed through the four levels of analysis of the individual, the state, organizations and the system (Schafer 2009). Within the United States on the individual level, President Obama has displayed more of an appreciation for greater usages of multilateralism than his predecessor, as evidenced by the multilateral effort in the overthrow of General Gaddafi in Libya. In 2002 under the administration of President Bush, for example, Latin American nations became highly skeptical that the United States had been involved in a unilateral attempt to overthrow Hugo Chvez of Venezuela. President Obamas public attitude toward the region, exemplified by his desire for

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the United States to serve as but one actor on the regional stage, not its director (Sabatini and Marczak 2010), is largely idealist in nature and seeks partnerships rather than economic servants. On the state level, the United States is currently recovering from a severe economic meltdown that has leveled and recently reversed course. The president will likely pursue initiatives and measures that serve to boost the American economy to encourage an increased accumulation of wealth, a growth of industry, and the creation of jobs. In terms of the organizational level, a variety of factors all come into play. The improvement of the economy via Latin America could assist the organization of his re-election in November tremendously as the economy weighs heavily on many Americans minds. The Department of Defense most likely desires an increased interaction with the region in order to ward off potential threats to homeland security so close to home, especially due to the insertion of the Chinese military into Latin America. There is additionally an immense population of Latinos present in the United States that would prefer the idealist flare of Obamas rhetoric. On the system level, the Obama administration will engage in what Christopher Sabatini refers to as a tango in navigating between the idealist desires for partnership and the realist necessity of economic growth (Sabatini and Marczak 2010). The course of navigation for this tango will be determined by the potential impact of foreign policy decisions on the overall standing of the United States in the region. An over-insertion would likely yield a backfiring effect with the further retreat of Latin American nations from U.S. leadership and toward anti-American movements, such as those that have and will form under the leadership of Hugo Chvez and Venezuela. Over-insertions into Latin America throughout history have already yielded negative sentiments, and their continuation would only serve to further transform those sentiments into more egregious actions.

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An under-insertion, however, does not satisfy the goals set forth on the individual, organizational or state level, and also leaves the region to fend with its own issues (Sabatini and Marczak 2010). For Brazil, the individual goals of former President Luiz Incio Lula de Silva prior to 2010 and the state goals largely coalesced seamlessly. President Lula, since the beginning of his administration in 2002, pursued policies to solidify and continue economic development in the nation by adapting the national economy to ensure its success on the global stage with all its intricacies of the World Bank and the International Monetary Fund. His charisma helped buoy the Brazilian state toward international prominence. By ensuring that the state is able to handle the facets of and compete in the global economy, President Lula moved Brazil forward in her ultimate goal of global power (Brand 2010, 2-3). Competing organizations within Brazil are also prevalent. The economic and industrial sector desires the materials needed to maintain and even expand current levels of growth. This need may translate into the acquisition of these materials through other Latin American nations, and possibly establishing a new core in Brazil with the rest of the region remaining peripheral. The organization of the elite class is unwilling to yield political control and sovereignty over to those they view as inferior. The organization of defense desires the functionality of a collective security apparatus in order to project power. On the system level, Brazil exudes her own flavor of exceptionalism that increasingly spurns both the United States and Latin American neighbors. The foreign policy of the current president, Dilma Rousseff, will have to navigate the overwhelming sense of Brazilian superiority with the necessity of assuring Latin American nations that the nation is welcoming enough to lead and guide them out of the global periphery. In addition to abating the concerns of her neighbors, Brazil also has desperately needed to improve her image abroad following the prior decades of authoritarian rule and economic instability (Brands 2010, 1-8; Einaudi 2011, 1-16).

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While the previous analysis of the foreign policy of Brazil and the United States included the utilization of the positivist theories of realism and idealism, the post-positive theory of constructivism is additionally useful in said analysis (Schafer 2008). The positivist theories imply that the events that occur on the international level are inevitable due to inherent characteristics that are unyielding. Constructivism, on the other hand, analyzes states and other entities and their actions through the lens of social constructions. The characteristics of the United States are derived directly as a result of social constructions that formed due to a variety of historical events. The events of World War II and the subsequent social constructions serve as quintessential examples. Due to the non-existence of actual combat on American territory, the social construction concerning the pursuit of war is drastically different than those found in Europe or Russia. Americans felt invincible, victorious, and deserving of the status of a superpower. Thus, the United States embarked on several feats of militarism in order to prove this self-constructed sense of invincibility and power. This construction translated into other foreign policy decisions as well, particularly in regard to those concerning Latin America. The United States sought to maintain the continued existence of the core-periphery model in the region due to the social constructions concerning capitalism. In this construction of the traditional capitalist system, there are winners and losers and those that deserve economic prosperity and those that do not. This general notion is applied to the global scale as capitalism is emerging as the global system of economics. Because of this construction imbued into the society, the United States exhibits very few qualms upon relegating various economies to the global periphery. The Political Future of Latin America In terms of the overall state of affairs in Latin America, an aura of uncertainty and

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possibility pervades. Several differing options lie before the region to pursue. The continuation of American-led efforts of integration is highly unlikely. While the current structure of UNASUR and CSD appears highly promising, the establishment of an opposing bloc consisting of more socialist governments and led by Venezuela is not outside the realm of possibility. According to Russell Crandall, the United States must adapt to the new realities of this post-hegemonic era, lest it see its influence diminish even further. It must demonstrate an ability to quietly engage and lead when appropriatean approach that will allow Washington to remain actively involved in the regions affairs without acting as though it is trying to maintain its legacy of hegemony. Given how accustomed the United States is to dominating the region, this project will be harder than it sounds (Crandall 2011, 85). No matter the course chosen and agreed upon by all, if such a course is ever to be fully agreed upon by all parties, the hope that Latin American nations themselves will have the capacity to direct their own future remains possible. An Uncertain Future of Non-polarity The United States of America has declined in hegemonic status over the region of Latin America due to a policy of benign negligence, inherent frustrations with American leadership among the regions nations, numerous attempts at regional integration that do not include the United States, the dysfunction and ineffectiveness of surrogate organizations and foreign aid, the political, economic and militaristic insertion of Brazil and China into the region, and the recent formation of UNASUR and CSD. Oscar Guardiola-Rivera provides a fascinating perspective on the future of globalization with specific regard to the rise of Latin America through his novel What if Latin America Ruled the World? Guardiola-Rivera argues that a war is brewing due to the continued effects of globalization, and that Latin America will likely serve as center stage for this conflict. With major industrial economies expanding at enormous rates, including those of Brazil, Russia, India and China, the necessity of acquiring new markets for raw materials

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expands as well. On the global scale, Latin America has consistently lost to other world powers or regions and has even helped to provide for the victories of those other world powers and regions (Guardiola-Rivera 2010, 1-5). These nations have been relegated to the periphery of the global economy, with the purpose of providing the core of the global economy with the resources it needs to continue to be the core (Rowe 2012). If the region continues to advance politically and economically, the possibility exists that its nations will not allow for the continuation and reintroduction of ever-new forms of colonialism and neo-colonialism due to lessons learned through history. Brazil exhibits the necessary aspects of a world-class economy, but thus far lacks the diplomatic ability to coalesce a fully integrated movement around her leadership and economic potential. Latin America has consistently lost due to deficiencies in the robustness of the middle class, necessary infrastructure, political stability, governmental structure, and a functional supranational institution of integration. If Brazil were to devote the necessary energy and resources to reverse these deficiencies and to convince her neighbors of the value of Brazilian leadership, then Latin America may truly emerge as a global contender. The future holds hope and possibility for this region of the world to consolidate economically, diplomatically, militarily, and politically in order to present a unified front and message to the rest of the world that it is fully capable of managing its own affairs, and that it deserves a prominent seat at the table of global affairs alongside the United States, the European Union, and China. The political reality of the global arena has evolved dramatically over time from the bipolar world order of the dominance of the United States and the Soviet Union during the Cold War era to one of non-polarity. In this state of non-polarity, a multitude of nationstates, supranational institutions, non-governmental organizations, global monetary organizations and even individual cities or states within nations exude power and prominence that disallows

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any one entity or group of entities to fully lay claim to world dominance. It is in this current political reality that several of the worlds powers are vying for prominence to establish themselves as a potential pole in the event the world is to shift into a more multipolar state, with a greater consolidation of power (Haas 2008, 44-46). It is the hope and dream of Latin America to establish itself as one of these poles in order to finally win on the global stage.

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