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Toni Solo: Varieties Of Imperial Decline

Varieties of imperial decline : rearguard success, strategic defeat.

By Toni Solo

"from 1920 to 1960, Venezuela was the leading world exporter of oil and here, through our Caribbean sea passed thousands of boats loaded with oil: but they left nothing to benefit the peoples of the Caribbean, the sister peoples of Latin America. Today revolutionary Venezuela places this wealth, above all, at the disposal of our sister peoples of the Caribbean and of Latin America: not for the North American empire." Hugo Chavez Frias, from closing words at Fourth Petrocaribe Summit.

Returning to Europe after some time away is like visiting an unloved relative falling into dementia. It may be unwelcome, but one sheds no tears. The persistent optimism of Western Bloc political and financial leaders is bizarre. For example Brian Cowen, Ireland's Finance Minister presented a budget recently based on projected inflation through 2008 of a little over 2% and growth in gross domestic product at 3%. Subsequently, Ireland's Economic and Social Research Institute's latest quarterly economic commentary reckoned growth at nearer 2% and inflation at over 3%.

But as this decade's credit boom slumps into bust, service-skewed economies like those in the US, Britain and Ireland are likely to be hit much harder than these forecasts suppose. Most people, businesses and households, more or less heavily in debt, will cut back hard on non-essential spending. That will probably create a vicious downward spiral as increasing numbers of people are made unemployed and overall consumer demand drops correspondingly. At the same time, creeping inflation will make everything dearer for people to buy. The full effects of all these processes are unlikely to work themselves out until late 2009 at the earliest.

Rich-country economists read their tarot card statistics blinkered by arrays of crystal-ball maybe-maybe-not data. But for millions of households in Asia, Africa and Latin America facing significant drops in family remittances as rich country economies go belly-up through 2008, real life stares them brutally in the face. For low-income families and communities in Africa, Asia or Latin America the effects of the coming recession will be far more devastating than for people in Europe and the US. Countries bullied into US-style trade-in-your-sovereignty pacts or EU-style Europeans-only-let's Party Agreements with the globalization devil will find their souls quickly ripped apart as the funny-money credit boom collapses into dwarf-star stagflation or a recessionary black hole.

For example, Mexico's small and medium farm economy will be annihilated through 2008 as North American Free Trade Agreement agricultural teaser clauses expire and trade terms re-set dramatically in favour of big US agri-business. These are the same mechanisms used by the derivative paper hucksters and structured investment artful dodgers who set up the current debacle in the global financial system. The agony in Mexico's agricultural economy is likely to be compounded by fierce military repression deployed to crush rural resistance. The unfolding catastrophe will provide a vivid, manifold justification of the ALBA (Bolivarian Alternative for the Americas) regional integration process led by Venezuela and Cuba.

ALBA visits Cienfuegos

With one very important difference, the final declaration (1) of the recent Fourth Petrocaribe summit at Cienfuegos in Cuba echoes the Coal and Steel Agreement that led to the formation of the European Economic Community, now the European Union. The main difference in this Latin American regional integration initiative is that so far the driving ideological force has been socialist-inspired solidarity rather than imperialist-country consolidation of capital and infrastructure. The Cienfuegos declaration stresses the interconnectedness of energy cooperation with social and economic development for vulnerable developing country economies.

Instead of focusing exclusively on the economic benefits of the agreement, the declaration stresses the need to use resulting financial benefits for literacy, healthcare, education and housing. The agreement takes in the macro-economic effects of dramatically improving participating countries' cash flow, thus reducing the need to incur unsustainable foreign and internal debt. The declaration also makes clear the anti-imperialist raison d'etre of Petrocaribe by stating solidarity with the Bolivian government in the face of current US and European backed opposition efforts to destabilise the country and break it up.

The US government and its European allies may have had some successes as they mount their various rearguard actions attempting to defeat, stymie or co-opt moves towards unity and integration in Latin America. For the moment they are relying on local allies to destabilise the ALBA country governments and ALBA sympathisers like the government of Rafael Correa in Ecuador. They co-ordinate those destabilisation efforts with their allies in the global corporate media and the powerful multinationals determined to dominate access to Latin American resources and markets.

Re-inaugurating the oil refinery at Cienfuegos - at a cost of US$166m - during the Petrocaribe summit there, was a great symbolic moment for the ALBA integration process. It linked ALBA's contemporary socialist-inspired vision of solidarity based trade and economic cooperation with Cuba's liberation from US neo-colonial rule. The Camilo Cienfuegos refinery had to be mothballed during the early 1990s because the US blockade made it impossible for Cuba to find partners to operate it. As Rafael Ramirez, Venezuela's Energy Minister, noted during the new inauguration, the reactivation of the refinery breaks wide open the US government's economic blockade of nearly 50 years. (2)

US backyard - getting smaller all the time

When Honduran Defence Minister Aristides Mejía signed ALBA's Petrocaribe initiative in Cienfuegos, Honduras became Petrocaribe's 17th member. Ever since Nicaragua joined ALBA in January 2007 it has only been a question of time before Honduras signed up too one way or another. Guatemala is not far behind. Increased foreign debt is all the US government and the European Union have to offer impoverished Central American and Caribbean countries almost completely dependent on oil imports. Aristides Mejía pointed out that Honduras joined Petrocaribe after experiencing the hostility of the big multinational oil companies to Honduran government attempts at stabilizing domestic fuel prices. (3)

Petrocaribe now supplies 53,000 barrels of oil per day to the economies of its member countries. Since its inception it has delivered oil products totalling 43 million barrels. Honduras joins Antigua and Barbuda, Bahamas, Cuba, Belize, Dominica, Grenada, Guyana, Jamaica, Dominican Republic, St Kitts and Nevis, Santa Lucia, St. Vincent and the Grenadines, Surinam, Haiti, Nicaragua y Venezuela. During the summit Rafael Ramirez, cited the huge disporportion between eastern Caribbean countries consuming just 10,000 barrels a day and the United States guzzling 20 million barrels a day to explain Petrocaribe's importance as a means of correcting energy market distortions caused by US over-consumption.(4)

Guatemala is another Central American country struggling to cope with problems caused by the fall in the value of the US dollar and surging oil prices. Shortly after his election in November 2007 President Alvaro Colom confirmed his intention to strengthen links with Cuba saying, "There is plenty of synergy between both States following the re-establishment of relations". Then, early in December, Colom confirmed his interest in bringing Guatemala into Petrocaribe.(5)

The willingness of Central American leaders to embrace Cuban medical aid and Venezuelan energy support is in tune with a reconfiguration of the region's economic and trade options. Costa Rica recently dumped relations with Taiwan in order to open diplomatic and trade relations with China. Perhaps of equal interest are the openings that ALBA is creating towards Africa and west Asian countries like Iran.

Building South-South cooperation

Currently Iran's trade with Latin America is something over US$2bn per year. For 2008 trade is projected to grow to US$4bn a year. The Iranian Foreign Ministry's Director for the Americas, Ahmad Sobhani recently remarked, "Despite the distance between us and Latin America, we see many points in common, the challenges are also shared since both geographic zones are oppressed by the imperialists and relations could be mutually beneficial." Sobhani was explaining Iran's intention of working closely with ALBA for more political and trade cooperation between Iran and Latin America.

Cuba has enjoyed close relations with Angola and South Africa since Angolan and Cuban forces defeated the apartheid regime's invasion of Angola in the late 1980s. But it is Venezuela's determination to work with countries like Angola and Nigeria inside the Organization of Petroleum Exporting Countries that gives the ALBA countries leverage beyond their individual potential. On November 18th in 2007 Angola's President Dos Santos met with both Hugo Chavez and Nigeria's Umaru Musa Yar'Adua in Riyadh in meetings outside the main meeting of OPEC ministers.

At that meeting in Riyadh, Angola sided with Saudi Arabia against Venezuela and Iran in refusing to discuss OPEC pegging of oil to the dollar. But both Angola and Nigeria are exploring how to diversify their international reserves out of dollars.(6) It seems unlikely that OPEC will be able to resist pressure to cut loose from the dollar through 2008 unless it claws back losses against the Euro to regain a Euro exchange rate of under 1.40.

Another area in which OPEC member countries like Nigeria, Angola, Venezuela, Iran and now Ecuador are likely to make their presence felt is in the uses of the multi-billion dollar OPEC Fund for International Development. In July 2006 both President Chavez of Venezuela and President Ahmadinejad attended the African Union summit of 53 African leaders that year. Venezuela will host the Second Africa-South America Summit in November 2008. At a preparatory meeting for that event, then Chairman of the African Union Commission Alpha Oumar Konaré declared:

"Today we should remember here the historical leadership that in the 20th century directed Africa towards its Independence, towards its liberation. Today we would have to remember here how that leadership rose in the midst of great difficulties and how often that leadership, almost in all its opportunities, was harassed by the empires... Today we should remember the great Patrice Lumumba, to Julius Nyerere, Amilcar Cabral, to Nasser, Thomas Sankara, to Samora Machel and to the great Nelson Mandela." (7)

South-South openings relating to ALBA countries stretch across the Pacific as well as the Atlantic. Vietnam and Cuba are now ready to start the second phase of the ambitious 3000km Ho Chi Minh highway project, running the length of Vietnam as far as the border with China. These external cooperation initiatives will eventually connect with inward Latin American integration initiatives like Bancosur, formally established on December 9th 2007 with the aim of freeing Latin America from the international financial institutions.

Rearguard class attrition

As these moves gain momentum one can see the political and ideological fields of conflict changing. Latin America's long struggle to throw off the dead seigneurial hand of US and European domination is complicated now by confusion and ambivalence among local middle classes and business classes about where their best interests lie. This is reflected, for example, in Nicaragua, where former Contra leader banker Jaime Morales works hard as Vice-President to get the best out of commercial relations with countries committed to "free markets" as well as supporting Daniel Ortega's decision to join ALBA led by Venezuela and Cuba.

Morales' pragmatic ambivalence is becoming more and more typical among his counterparts throughout Latin America. The willingness of the Zelaya government in Honduras and the Colom government in Guatemala to join Petrocaribe may well be pure pragmatisim. But Petrocaribe and the wider ALBA project are already showing advantages and benefits well beyond the reach of the miserable, one-dimensional "free trade", debt-plus-aid, anti-development model propounded by the United States and its G7 allies. ALBA countries' geographical reach makes nonsense of traditional Latin American diplomacy and geo-strategic planning, forcing even their local enemies to re-think regional strategy.

Still, in the course of the long strategic defeat they are suffering, the United States and the European Union and their allies can claim some rearguard successes. In 2006 they had Felipe Calderon's fraudulent electoral win in Mexico, Alan Garcia's dodgy defeat of Ollanta Humala in Peru and Alvaro Uribe's narco-terror-based presidential win in Colombia. In 2007, US and EU proxies scraped a win against the Chavez government's proposed constitutional reforms in the December 2nd referendum in Venezuela. Prior to that, US allies in Costa Rica squeezed out a suspiciously tight win in the referendum on the Central American Free Trade Agreement.

But the separatist inspired disruption of Bolivia's constituent assembly failed to prevent the handover of the country's new constitution by the December 15th deadline. Nor has the local oligarchy been able to rally effectively so far against the recently installed constituent assembly in Ecuador. For the US and its allies, win-some-lose-some has become win-a-few-mostly-lose-'em. Their tactics, especially with death-squad terror veteran John Negroponte in the State Department, are likely to become more vicious as the potential scale of their strategic defeat grows clearer and the temptation to double or quits grows stronger.

Dan Feder of Narco News has written about increasing terror activity by Colombian government proxy paramilitaries in Venezuela's border areas. (8) The US government backed separatist movement in Bolivia's eastern provinces has used violent paramilitary gangs to attack supporters of the government of Evo Morales and also members of the constituent assembly trying to comply with the deadline for Bolivia's new constitution. The December 2nd referendum on Venezuela's constitutional reform was also marked by violent incidents provoked by the US government funded opposition.

Dynamic younger ALBA leaders like Hugo Chavez, Evo Morales and their Cuban and Nicaraguan counterparts can count on the international experience and savvy of older leaders like Fidel Castro and Daniel Ortega. All are ably supported by thinkers and diplomats at least as subtle - often more so - than anyone on Negroponte's team. ALBA's socialist-inspired drive for integration will likely see the region through the worst of the coming economic storms despite US and EU efforts to exploit ensuing crises to their advantage.

The moral dimension of things pits the altruism of ALBA's humanitarian vision and practice against the greed-driven, mass murdering frauds of the Bush regime and their European allies. The Cuban and Venezuelan led Mision Milagro medical programme recently notched up one million patients. ALBA's grass roots literacy and education programmes are enabling hundreds of thousands of people to read and write and advance their studies. By contrast, between them, the US and European governments have destroyed millions of lives in Iraq and Afghanistan and deploy a full spectrum assault on Palestinians in Gaza in violation of their commitments as members of the United Nations.

The next two years of economic upheaval and fierce political turmoil will be a decisive period for Latin America finally to clinch autonomy from the grip of decrepit but still vicious US and European imperialism. But Brazilian and other regional elites in league with new foreign capital from China and India are marrying those new elements to their traditional relationships with US and European corporate power. The emerging pattern of struggle for the region's peoples will be much the same as it has been for 500 years - fighting to ensure their countries' enormous natural resources benefit themselves and their children rather than people on the far side of the world.



Note 1. Full text of the Declaration of the Fourth Petrocaribe Summit

The heads of State and government leaders of the Petrocaribe member countries, meeting at Cienfuegos, Cuba on December 21st 2007,

Recognising that thanks to Venezuela's generous strategic initiative, Petrocaribe is now a real and effective project, clearly in the process of execution as a sign of the spirit of solidarity, cooperation and integration that have inspired it;

Underlining the nefarious consequences of the unequal international economic order that, among other things, has a negative impact on the prices of basic foodstuffs, including hydrocarbons and highlighting the duty to protect developing countries from the damage caused by more expensive fuels;

Recognising the serious impact of the United States' dollar's devaluation on the growth of an international price spiral for oil;

Emphasising that, exactly when the bill for purchasing oil is undergoing larger increases, the Caribbean countries can count on a scheme which more and more guarantees necessary supplies on fair and sustainable terms;

Taking note that Petrocaribe has shown itself to be more than simply a trade mechanism for fuel supply and that it now constitutes a strategic programme for energy security that also contemplates cooperation to ensure savings and efficiency in the energy generation, transmission and consumption, which has been widely shown by the experiences of various Caribbean countries in energy cooperation;

Underlining that initiatives of a social character benefiting the most impoverished sectors of participating nations have begun to show successful results and will carry on being a central objective of Petrocaribe and that the programmes of literacy, healthcare, education and housing are worthy examples of the fair use and solidarity that can result from high incomes received by exporters of energy resources under current conditions and of the savings generated by those importing countries that participate in the scheme;

Underlining, too, that through Petrocaribe and under the integrationist principles of the Bolivarian Alternative for the Peoples of Our America, the Caribbean nations have continued building an efficient sub-regional energy matrix that contemplates setting up new capacity for refining, storing and transporting oil, of import-export and processing infrastructure for natural gas and for the training and preparation of human resources for the energy industry:

1. We express our conviction that the agreements reached within the Petrocaribe framework form an important tool to ensure energy security and that way to contribute decisively to promoting the sustainable social and economic development of participating countries.

2. We ratify the commitment to contribute to the common energy security, as well as the development and greater integration of the countries of Central America and the Caribbean making sovereign use of energy resources.

3. We emphasise that Petrocaribe is a model for cooperation among developing countries guided by principles of solidarity and special differentiated treatment for countries lacking natural energy resources.

4. We note the significant contribution of the agreements signed in the Petrocaribe framework to soften the effects of high and growing hydrocarbon costs for economies dependent on importing them.

5. We recognise the positive social impact in our countries of programmes financed by the ALBA Caribbean Fund as a complementary arm of Petrocaribe's energy projects.

6. We are proving to our satifaction the sustained progress to accomplish agreements reached since the first Petrocaribe Summit and we welcome the first steps in the creation of the infrastructure required to carry out commitments that have been undertaken. In this context we commit ourselves to take the necessary measures to accelerate their due progress.

7. We repeat the need to continue investing economic resources, saved by the financing of 40% of the oil bill, in projects with high social content that promote poverty reduction for our peoples.

8. We recognise that the process of energy integration involves as the main actors, the State, companies in the sector and the whole society so as to achieve an equilibrium between the interests of countries, the needs of peoples and the efficiency of the sector.

9. We voice our support for the national and popular processes developing in Latin America in defence of sovereignty and natural resources and very particularly our solidarity with the government of Bolivia faced with attempts to subvert Bolivia's democratic process and break up the country.

10. We are determined to promote energy savings and efficiency and the development of renewable energies so as in this way to contribute to energy security, to promote universal access to energy and the conservation of the environment.

11. We accept with satisfaction the resolution adopted by the Third Meeting of the Petrocaribe Council of Ministers celebrated within the framework of this Fourth Summit.

12. We are determined likewise to continue promoting Petrocaribe and developing within it new initiatives contributing ever more decisively and palpably to the social and economic development of our nations and the wellbeing of our peoples.

13. We agree to celebrate the Fifth and Sixth Petrocaribe Summits in St. Kitts and Nevis and in Belize respectively

Cienfuegos, Cuba, December 21st 2007

Note 2.
"Refinería de Cienfuegos, un día histórico", Juan Diego Nusa Peñalver, AIN, for, 21/12/2007.

Note 3.
"Honduras entra a Petrocaribe y agradece a Chávez ayuda petrolera" AFP, in, 22-12-2007

Note 4.
"Honduras ingresa en Petrocaribe", Presidential Press Office, in , 22-12-2007

Note 5.
"Presidente electo de Guatemala destaca vínculos con Cuba", Carmen Esquivel, Prensa latina, 5-12-2007
"Colom Reaffirms Guatemala's Interest in Petrocaribe", Prensa Latina, 8-12-2007

Note 6.
"Saudi Arabia Not Alone in Defending Dollar in OPEC (Update1)", Anchalee Worrachate and Zainab Fattah, 17 -11-2007

Note 7.
"Venezuela Hosts Preparatory Meeting for Second Africa-South America Summit", Kiraz Janicke,, 19-7-2007

Note 8.
"Colombia's New Generation of Paramilitaries Operates on Both Sides of Venezuelan Border", Dan Feder,, 19-12-2007

toni solo is based in Central America - see


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