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Russia strengthens ties with Latin America

Date: 2006-09-27

In their everyday lives most Russians come in contact with Latin America when they drink Brazilian coffee and Mexican tequila, and go to the Lenkom Theater to watch the "Juno and Avos" rock opera, a tale of love between a Russian traveler and diplomat Nikolai Rezanov and Spanish girl Conchita in California, which was called New Spain in the early 19th century, and was later renamed Mexico. But few Russians are aware that the Rosticks chain of fast-food restaurants are a Russian-Venezuelan joint venture.

On the political scene, the Israeli-Lebanese conflict, Iran's nuclear fuel program, Russia's intense relations with the Commonwealth of Independent States, the political dialogue with Europe and the United States, and the September visit of the Russian president to Africa seemingly overshadowed relations with Latin and Caribbean countries.

President Vladimir Putin said at a news conference in Mexico in 2004: "Owing to certain events in the early 1990s, we were forced to deal with internal affairs and had no time for Latin America. But today - and this is my deep conviction - Russia has no right to disregard this area of its policy in view of Latin America's potential and growing economic and international weight. We will act consistently in this sphere, working with all countries of the continent."

Latin American and Caribbean countries have a population of nearly 500 million (about 10 percent of the world's total), occupy more than 15 percent of global surface, account for about 8 percent of the global product, and have 20 percent of the world's key mineral resources.

The Russian president's visits to Mexico, Brazil and Chile in 2004, the Moscow visits by the presidents of Venezuela (2004, 2006) and Brazil and Mexico (2005), as well as meetings between Putin and presidents of Brazil and Mexico on the sidelines of the expanded dialogue of the G8 leaders during their 2006 summit in St. Petersburg clearly show that Russia's relations with Latin America do not depend on the global situation.

Russia maintains diplomatic relations with the 33 Latin American and Caribbean countries, as well as with the regional multilateral organizations, such as the Southern Common Market (Mercosur) and the Rio Group, which is a respected and influential political association created to coordinate the foreign policy of regional countries.

Russia has the status of a permanent observer in the Organization of American States and is developing relations with the Andes Community, maintaining political dialogue with the Central American Integration System, the Dominican Republic and the Caribbean Community as well as promoting contacts with the Ibero-American Forum.

Russia also has the observer status at the Latin American Integration Association and the Association of Caribbean States. It believes that the U.N. Security Council, if a decision is made to expand it, should include delegates from Latin America.

The upper house of Russia's parliament is promoting ties with the Latin American parliament and intends to establish contacts with the Andes, Amazon and Central American parliaments and the Inter-Parliamentary Forum of the Americas.

Multilateral economic structures are gradually acquiring functions of political coordinators. Mexico co-founded (the other two founders are the Untied States and Canada) the North American Free Trade Agreement, the world's largest free trade area.

Latin America and the Caribbean, which had disregarded Asia in the past, are now developing relations with it and joining various organizations in the Asia Pacific community. Mexico, Peru and Chile have become members of the Asia Pacific Economic Cooperation, a key regional forum.

In the last few years, Russia has created a new channel of strengthening its political relations with Latin American and Caribbean countries, spotlighting relations with the most influential associations, the Rio Group and the OAS, where it has the status of an observer.

The role of the Latin American and Caribbean countries as a global political and economic center and a key element of the nascent multipolar world is growing. Their firm commitment to international law, the central role of the United Nations, the objective of strengthening multilateral mechanisms for regulating international relations, and initiatives on drafting new laws adjusted to the new realities of the 21st century are promoting the image of Latin American and Caribbean countries as constructive partners. Mexico and Chile as U.N. member states have taken a principled stance on the Iraqi issue, and are supported by the majority of regional countries.

Russia values the concerted stance of Latin Americans in support of the non-proliferation regime. Years of compliance with the Treaty for the Prohibition of Nuclear Weapons in Latin America (Tlatelolco Treaty) have special significance for peace. In a word, Latin America and the Caribbean are a region of international political stability.

The leading centers of power in the world are aware of the region's role. European diplomats are working hard there to promote bilateral ties and relations with the European Union, and Asian countries, primarily China, Japan, South Korea and lately India, are doing the same.

Apart from Russia, the other CIS countries developing relations with Latin America are Ukraine, Armenia and Belarus.

The EU is the leading provider of official development aid and humanitarian programs in Latin America (ahead of the United States) and is the second largest trade partner (after the United States).

Last year, a business delegation from the Rio de Janerio state, SE Brazil, visited Russia. In August 2006, the Russian Chamber of Commerce and Industry received a delegation from the central provinces of Argentine. This fall, Moscow will host a Russian-Mexican business forum, which should boost bilateral economic cooperation.

The share of the region's countries in Russian foreign trade is 4 percent, which is comparable to the share of the United States and Canada (6 percent). The annual trade is about $6 billion, which is much lower than the two sides want. There are several reasons for this, notably problems and limitations rooted in the peripheral economic development of Latin American and Caribbean countries, as well as contradictions and paradoxes of their integration into global processes. At the same time, major industrial and financial centers are developing in the region, the share of whose industries in export has reached nearly two-thirds.

Problems in trade and economic relations with the region's countries are partially due to the drawbacks of Russia's economic system and its inadequate integration in the global economic structures. Russia's cooperation with the Latin American and Caribbean countries is hindered by the weakness of its lending and banking sectors, inadequate mechanism for supporting non-commodities exports, and lack of professional knowledge about the region's countries in the Russian business community. Even though they have competitive products, Russian suppliers often lose contracts because of drawbacks in the organization of technical maintenance, supply of spare parts, logistics and marketing strategy.

Part of responsibility lies with the Latin American and Caribbean countries, unstable situation on the market of some regional countries, and insufficient commitment of local partners to carrying out long-term projects and maintaining payments discipline. There are also some psychological barriers.

Like Russian exporters, Latin American suppliers do not know enough about the specifics of working on the Russian market. This is why there are so many intermediaries in Russian-Latin American trade.

The development of trade and economic ties is hindered by the fact that Latin American countries do not see Russia as a market economy (only Brazil and Colombia have officially recognized its status), and by the use of anti-dumping measures against Russian commodities, primarily ferrous metals and products and mineral fertilizers (Mexico, Argentine, Peru and Venezuela).

The Russian business community is showing a growing interest in the region's power generation, oil and gas production, automobile and machine building, metallurgy, banking, fishing, cooperation in high technologies, as well as peaceful space exploration and the nuclear energy. Russia has signed a contract on the delivery of equipment for a hydropower plant in Brazil, won a tender for the supply of hydro turbines and generators to a hydropower plant in Mexico, and is implementing a five-year contract for the operation of a hydropower plant in Colombia.

Russian oil companies are working in South American countries. Russia is negotiating with Venezuela and Mexico as the region's main oil producers in order to ensure stability on the oil market. The Russian government also hopes to develop dialogue with Mercosur, taking into account the importance of gas for the energy systems of the member countries.

As a supplier of arms to Latin American and Caribbean countries, Russia aims to prevent the accumulation of destabilizing arsenals capable of disrupting the balance of forces in the region.

Russia is developing contacts with the emergencies structures in the region, trying to create a regional disaster response center in Central America.

Festivals of Ibero-American culture held in Russia are strengthening cultural ties with Latin American and Caribbean countries, Spain and Portugal.

The first Russian settlements in Latin America and the Caribbean were founded by Old Believers, who had crossed the ocean to settle in Bolivia, Brazil and Uruguay. Russian officers fought in the army of Simon Bolivar, one of South America's greatest generals, and for the independence of Paraguay in the 19th century. Russian trailblazers and Cossacks went to Alaska and crossed North America to settle in California.

There are about 300,000-350,000 ethnic Russians in Central and South America. The Russian government is promoting the influence of the Russian Orthodox Church there. There are alumni associations of Soviet and Russian universities in Bolivia, Venezuela, the Dominican Republic, Mexico, Costa Rica, Nicaragua, Panama, Peru, Uruguay, Chile, Ecuador and Jamaica. Thanks to them, there are Russian friendship associations and societies and Russian language and culture centers in many regional countries. They organize the visits of public officials, tours by actors and exhibitions of Russian artists.

Although cultural ties have become largely commercialized, old traditions of cultural cooperation are being gradually revived. Festivals of Ibero-American culture are held in Russia, and art exhibitions, weeks of Russian filmmaking and days of Russian culture in the region's countries. Brazil has opened the world's only schools of the Russian Bolshoi Theater (Joenville) and Tchaikovsky music schools (Fortalesa) with the assistance of the Moscow Conservatory.

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