From the FTAA to Chinese Soft Power in Latin America | Latin America & Caribbean |Axisoflogic.com

Argentine soccer legend, Diego Maradona, wearing a | Photo: EFE

Latin America and the Caribbean have left behind the Washington Consensus and have been moving towards a post-liberal scenario.

Military and economic power are examples of hard power, of the power of command that can be employed to induce third parties to change their positions. Hard power can be based on incentives (carrots) or threats (sticks). But there is also an indirect way to exercise power. A country may obtain it desired results in world politics because other countries want to follow is star, admiring its values, emulating its example, desiring its level of prosperity and openness. In this sense, it is as important to maintain a view of world politics and attract third parties as to oblige others to change through threats or the use of military or economic arms. This aspect of power – to achieve that others aspire to what one aspires – is what we call soft power. Rather than coercing, it absorbs third parties.

Joseph Nye, The paradox of North American Power

1944. In a hotel in Bretton Woods (New Hampshire, United States), a year before the end of World War II, the principal powers of the Western World decided on the creation of a new order in the economic, financial and commercial spheres, giving the impulse for the creation of the International Monetary Fund and the World Bank, as well as the utilization of the U.S. dollar as the money of international reference.

1955. In Bandung (Indonesia), 23 Asian and 6 African States that had recently acquired independence through decolonization, held a meeting. They represented 1.5 billion people who only held of 8 percent of world income. These countries of the third world, in addition to condemning colonialism and apartheid that still existed in a good part of Africa and Asia, agreed on a series of principles based on the defense of sovereignty and equality among races and nations, in addition to the defense of the principles of non-aggression, non-interference and peaceful co-existence.

2005. In Mar del Plata (Argentina), the IV Summit of the Americas, where George W. Bush and his proposal of a Free Trade Area of the Americas (FTAA) was defeated by the opposition of Argentina, Brazil, and Venezuela, with the support of Uruguay and Paraguay. The campaign of mobilization of the social movements and Latin American peoples as well as the role of Presidents Nestor Kirchner, Luiz Inacio Lula da Silva and Hugo Chavez were essential in the defeat of the proposal.

2015. In Moscow, taking advantage of the 70th anniversary of the victory over fascism, Russian President Vladimir Putin and the President of the Peoples Republic of China Xi Jinping, signed 32 agreements of cooperation involving economics, trade, energy, infrastructure, science, technology and military affairs, including a high speed train between Moscow and Beijing, planned for 2023. A week later, Xi Jinping visited Brazil and signed trade agreements with President Dilma, amount to US$50 billion, the most important of which was a railway that crosses the Amazon and the Andes to join the Atlantic coast of Brazil with the Pacific via Peru, making a fast track with China possible.

And just over ten years after Bretton Woods a group of nations that defied U.S. hegemony was born and began to trace a new scenario that finished with the bipolarism of the Cold War, ten years after the death and burial of FTAA in Mar del Plata, we are now seeing the birth of a multipolar world in which China, and by extension the BRICS with Brazil anchored in Latin America and the Caribbean, challenge the declining hegemony of the United States.

Thus, as defined by Monica Bruckman and Theotonio Dos Santos the closeness that is given between the emerging powers involved in BRICS, in addition to the impulse in relations between China and Latin America, usher in a new phase of South-South relations, inspired on principles similar to those of the Bandung Declaration.

Soft power with a Chinese flavor
This scenario of multipolarity, partially responsible for the decline of U.S. hegemony, cannot be understood without looking at the incomparable ascent of the Chinese from the beginning of the twenty-first century. This ascent began to develop in the second half of the twentieth century when in 1949 it began to form part of the Security Council of the United Nations, and above all when its economic reforms began in 1978. In 1982, the first special economic zones along the China coast were created, giving place to a mixed economy in special zones of the territory that would configure the Socialist Market Economic System (formally established in 1993); in 1984-1995 the Chinese Government established the Getihu, with private property of small businesses; in 1990 the Stock Market was inaugurated and in 2001 China was incorporated, although with conditions, into the World Trade Organization (WTO); in 2004 there was a constitutional reform to allow private property and by 2006 China was the fourth economy in the world, only surpassed by the triad of the United States, Japan and Germany. Finally in 2010, China also surpassed German and Japan.

At the present time, China is the second world economic power, with little distance from the United States, and already exceeding them in their GNP adjusted by purchasing power parity (PPP). To give an idea of the growth levels, in 2005 the Chinese GNP was at 72 percent of the United States, in 2011 at 87 percent, and today they are at the point of reaching parity. This has been possible due to extraordinary growth rates of an annual 10 percent which translates so that in the past 30 years its real GNP has been multiplied by 13 times, its GNP per capita by nine times and its real per capita consumption by six times.

China has had five big leaders since its foundation: Mao Zedong, Deng Xiaoping, Jiang Zemin, Hu Jintao and now Xi Jinping, in two stages of approximately 30 years each. Between the foundation of the Peoples Republic in 1949 and the death of Mao in 1976 agriculture and heavy industry were developed, which allowed, with a certain autarky, to guarantee the basic needs of the people based on equality. From 1978, and over the following 30 years of implementation of socialism with Chinese characteristics, or market socialism, China took off economically under the impulse of light industry and technology and at the cost of an increase of inequality between the countryside and the city, as well as between the coast and the interior, creating new social classes.

It is during the second half of the last 30 years that China adapted itself to the notion of soft power, worked out in 1990 by Josep S. Nye in his book Bound to Lead. The Changing Nature of American Power and developed in The Paradox of American Power. Why the World's Only Superpower Can't Go It Alone (1992) and above all The Means to Success in World Politics (2004). Works translated to Chinese and adapted to Chinese characteristics.

Nye contends that soft power has three pillars: culture, foreign relations and political values. From coercion in the military and economic context that exercises hard power; soft power is based on seduction and persuasion. If hard power concentrates on structure, we can say that soft power is something super structural that concentrates on the construction of ideology.

To understand soft power with Chinese characteristics, we must think of two key concepts in international relations of the Asian giant – peaceful development and a harmonious world.

The pacific development theory was denominated in a first moment as peaceful ascension and consists of 5 points enumerated by the Prime Minister Wen Jiabao:

Attempt to take advantage of world peace to promote the development of China and safeguard world peace through Chinese development;
This will be based on the self-strengthening of China and its independent and arduous labor;
This can only be done by continuing with the policy of openness and an active series of economic and commercial interchanges at the international level;
This will take several generations; and
There will be no attempt to obstruct the route of any other country or to threaten any other country, nor will it be at the expense of any country in particular.

However, they soon substituted the notion of ascension for development in order to not generate tensions with other powers of the new world which were being established and that could be understood as a threat to the status quo. Development as a clear gamble to consolidate its role of a power without threatening the role of any other, especially of United States, in a logic of non-confrontation, although it will extend its influence in Africa, Asia and Latin America. This deepening of the doctrine can be found in the book of the Chinese government, China's Path to Peaceful Development.

At the same time, policy of a harmonious world involves thinking of a peaceful and secure world, based on respect for international legality and the sovereignty of countries, where there will exist a peaceful co-existence of different civilizations and technical cooperation for development, especially for countries of the South.

These two elements, peaceful development and a harmonious world mark the base of Chinese soft power, which looks to exercise a sphere of influence with its foreign policy and international cooperation, above all South-South, and its economic success. Probably the only obstacle to be encountered will be the criminalization that the West imposes on anything that is not its model of liberal bourgeois democracy, but the Chinese Communist Party (CCP) adopts a model of consultative democracy in which a technical-meritocracy administers power in the name of the people and in permanent consultation with the same, maintaining a stability on the basis of economic growth which is not found in the greater part of the West.

The Indo-Russian-Triangle
But the soft power with Chinese characteristics cannot be seen in the area of international relations without Russia and India, who help to establish the new multi-polar order.

The alliance between the three nations is very solid, based on economic, political and military cooperation, which makes possible enormous internal markets for the excess of production of each country.

Russia, with the nationalist government of Vladimir Putin, but with the Communist Party (PCFR) as the second force with about 20 percent of the votes, shares with China the leadership of the non-western world. The PCFR has a political horizon that looks as much to the socialism of the twenty-first century in Latin America as to the socialism of the Chinese market. The Russian Federation moves in the terrain of economic integration with the creation of Euroasian Economic Union (EEU) established in January 2015 which includes Russia, Belorussia, Kazakhstan, Armenia and Kirgizstan, and has the objective of creating in ten years an internal common market similar to the European Union for the free circulation of capital, merchandise and workers.

For its part India, since the coming to power of the nationalist Narendra Modi (to whom the United States refused a visa a few years ago) and in spite of some territorial conflicts that both parties maintain, has come closer to China, evidenced in the visits of Xi Jinping to India in September of 2014 and of Modi to China in May of 2015. At the same time, they have reinforced their military cooperation with Russia, having recently purchased 200 multifunctional helicopters Ka226T at the cost of US$467 million.

In addition, Russia and China have worked together on the design of the new Silk Route, a corridor of transportation, energy and commerce between Asia and Europe that will unite India, Bangladesh, Myanmar and China as well as another corridor between Russia and India through Central Asia which will connect China with Europe.

China, Russia and India will also take part in the Asian Bank of Investment in Infrastructure (BAII), set up by China with India as a founding member since 2014 and incorporating Russia in 2015. The Bank already has 57 members including several countries that are members of NATO such as the United Kingdom, Germany and Italy, leaving out only the United States and Japan from among the big powers of the G8. This now becomes the principal reference of the new international financial architecture, a counterweight to the International Monetary Fund (IMF) and the World Bank (WB).

BRICS
China, Russia and India, with South Africa and Brazil as gateways to Africa and South America make up BRICS, a term created in 2001 by the head of Global Economic Investigation of Goldman Sachs, Jim O'Neill. A little later, in 2003, Goldman Sachs published a report where a perspective of this group of emerging powers was made.

BRICS, at the present time, represents 3 billion people, 46 percent of world population, occupying 29 percent of its territory with 25 percent of world GNP and representing 20 percent of global investments. In addition, they possess huge reserves of fossil fuels (Russia) and minerals (Russia, China and Brazil) in addition to being large producers of food. They are also among the countries with major international reserves (China in first place with more than US$4 trillion).

BRICS began to function as a bloc in the year 2006 when, at the initiative of Putin and taking advantage of the General Assembly of the United Nations in New York, there was a first ministerial meeting of the foreign ministers from Russia, China, India and Brazil. A a bit later on May 2009, there was the first meeting of the bloc in Russia with presidents Medvedev, Lula, Jintao and the First Minister of India, Manmohan Singh.

The area of military cooperation is one of the most advanced among the BRICS countries. Russia's advanced technological capacity is combined with the Chinese levels of production, above all in combat aircraft, warships and anti-aircraft defense systems. And while there are agreements in all principal areas of technical military cooperation, Russia’s Vice President of the Academy of Geopolitical Problems, Konstantin Sívkov, points out that it is necessary to widen this through common projects for the development of systems of armament, advancing in strategic cooperation, common exercises, common preparation of personnel and plans for military action in emergency situations, coalition bases in determined zones of responsibility, following the example of NATO or the Warsaw Pact.

In technology, BRICS are also moving in the development of BRICS cable, a system of interconnection through optic fiber oceanic cable, with an extension of 34 thousand kilometers and a capacity of 12.8 tetra bits per second that will connect Russia and Brazil passing through China, India and South Africa. BRICS cable will guarantee sovereignty in communications, especially in internet, achieving technological sovereignty in communication and protection from U.S. espionage.

In economic, trade and financial affairs BRICS have also moved forward. China has proposed to BRICS the creation of a common market in trade and economics with a mechanism of monetary agreements (genesis of common currency in the long term?). The basis of this common economic and trade policy will be the New Development Bank of BRICS (NDB BRICS), officially established on July 2014 in the Fortaleza Summit with an initial capital of US$200 billion. It will be based in Shanghai.

Latin America and the Caribbean
The implementation of BRICS in Latin America is not defined as of yet, due to the slow process of regional political integration and the problems that Brazil is now facing, from being a regional sub-power with diplomatic relations in Central and South America, has had to fall back due to internal problems with the government of Dilma Rousseff.

Meanwhile, China itself has taken the lead in Latin America, opening communication with ALBA, UNASUR and CELAC, and above all exercising an unprecedented economic diplomacy. One datum says it all: the volume of trade between Latin America and China has increased 1193 percent in the first ten years of the twenty-first century (2000-2010) and in 2010 alone, Chinese loans for development projects in different countries of Our America were superior to those of the World Bank (BM) or the Inter-American Development Bank (IDB). At the same time it is important to single out one of the most important financial projects, with Chinese capital, the new Nicaraguan Canal, a serious competitor to the Panama Canal, and a project with a cost estimated at US$50 billion.

Meanwhile, Latin America and the Caribbean look with sympathy at the soft power with Chinese characteristics since the Peoples Republic of China provides loans at low interest rates and does not intervene in the internal affairs of the country, as well as boosting other references in the international system in its search for multi-polarity and thus contributing to provide the geopolitical picture with a South-South outlook.

Obviously China as the first consumer of energy in the world, and as is claimed in its Document on Policy toward Latin America and the Caribbean has great interest in a region that has some of the principal reserves of raw materials, minerals, biodiversity and water in the world, and the countries of Latin America should look for a balance between the obtainment of Chinese investment and loans in order to develop the country and bring the population out of poverty, and the need to industrialize and develop technologies with a view to the long term. It means we must look to a balance between the immediate needs of the present situation and the strategic look on the long term through South-South cooperation.

Sixty years after Bandung, both in Latin America and the Caribbean and in China, there is a search for hybrid ways of thinking on the economy, policy and society, between socialism and a capitalism of the national-popular state. As in Bandung, between these two zones of the world respect for sovereignty and the principal of non-interference in the internal affairs of each country, in addition to the defense of the resolution of conflicts through peaceful means.

Latin America and the Caribbean have left behind the Washington Consensus and its tools like the FTAA, and have been moving towards a post-liberal scenario based both on a Bolivarian Consensus as well as a Consensus of Beijing, which have as common and principal traits a strong State that exercises a basic role in the design and planning of the economy and the redistribution of wealth on the basis of sovereignty over natural resources, and a new diplomacy that looks more to the South than to the North. With different rhythms, intensities, and some processes with more depth than others, are the characteristics of a changing epoch in Our America.

The post-liberal horizon faces advances, tensions and challenges, as well as backward steps that characterize the processes of change in Latin America, the flows and reverses of revolutionary processes as well as reforms. But this horizon also faces instruments for Latin American disintegration such as TISA (Trade in Services Agreement) the Pacific Alliance, a recharged FTAA which, in spite of a claim that it pretends to facilitate the integration and not reinforce continental divisions, has among its objectives removing itself from the threatening shade of Brazil in order to promote a regional integration more favorable to trade than MERCOSUR and to counter any residual influence of ALBA.

BRICS, as François Houtart has affirmed, is anti-hegemonic but not anti-systemic, to break the hegemony of the United States and help to consolidate a new multi-polar world, should be a necessary first step for a post-neoliberal scenario in a good part of Latin America and the Caribbean, that could be changed into something more, amplifying its limits to allow us to see a post-capitalist horizon. And in this chess match that is being played right now in the South in general and in Our America in particular, between flows and counter-flows, China and its soft power should be fundamental allies to build the epochal challenge.

Katu Arkonada is postgraduate in Public Politics. Ex consultant of the Strategic Planning Vice-minister; Constitutional Development Juridical Unit of Vice-presidency; and Bolivian Foreign Affairs Ministry. Member of the executive secretary of the Network in Defense of Humanity

Article published in the book Del no al ALCA a UNASUR: Diez años después de Mar del Plata, Juan Manuel Karg, Agustín Lewit (coords.), CCC-REDH, 2015.

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