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Iran in Latin America

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The Growing Influence of Iran on Latin America's 'New Left' Governments

December 6th 2010

Latin American Topics - Ahmadinejad and Chavez
Hugo Chavez and Mahmoud Ahmadinejad

As concern grows in Washington over the potential threat that Iran poses to the United States and its allies, scant attention has been given to the Islamic Republic’s expanding influence in Latin America. In the past year, a number of events revealed Iran’s increasing links to the region, most of which have been economic in nature, although political gambits have also proved important. While Iran’s increased involvement in Latin America may have the potential to present a threat to U.S. security, such threats may be overstated and not a justified concern.

Despite what those seeking to demonize the Latin American left would have the U.S. public believe, the security implications of an Iranian presence in the region may well be minimal. Rather, the relationship is more likely to challenge Washington’s ability to exert itself abroad.

The deepening of the relationship between Iran and much of Latin America is the product of two converging factors. In recent years, Latin America has witnessed the rise of the “new left,” a political ideology characterized by socialist, nationalist, and anti-imperialist components. Regimes embodying such tendencies currently exist in Nicaragua, Venezuela, Bolivia, and Ecuador. Furthermore, a number of other governments throughout the region exhibit various degrees of sympathy with this new ideology. Iran’s increased presence in the region began largely in the aftermath of Mahmoud Ahmadinejad’s 2005 presidential election.

A tenacious ideologue, the Iranian leader has actively sought to overcome the impasse that emerged in recent decades between Iran and the US under Tehran’s previous theocratic rulers. Ahmadinejad’s confrontational rhetoric is similar to that of other shrill critics of the United States, a number of whom can be found in Latin America. It is thus more or less natural that linkages between Iran and Latin America’s leftist regimes have developed.

The history of Iranian-Latin American relations, as well as the precise characteristics of the current relationship, is crucial to an understanding of Iran’s growing influence in the region. Many have tried to portray Iran’s presence in Latin America as a somewhat crude invasion of the continent, designed to vex the United States without any meaningful consideration being given to constructing a serious, functioning relationship. While this view may be supported by some aspects of the relationship (particularly in the political realm), it is by no means an accurate depiction of the totality of Iranian-Latin American ties.

Iran and Latin America: Building a Long-Term Relationship

Iran has a relatively lengthy history of involvement in Latin America. Venezuela and Iran first established diplomatic relations in 1947. Their relationship deepened throughout the 1970s as Venezuelan President Carlos Andrés Pérez developed close relations with the notoriously autocratic Iranian leader Mohammad Reza Shah Pahlavi. Nicaraguan-Iranian relations date back to the nascent Iranian revolutionary regime’s support of the 1979 Nicaraguan revolution. Iran has also cooperated with Mexico in the energy industry since 1991, if not earlier. Furthermore, Guyana and Suriname have enjoyed close relations with the Middle East since the mid-1990s through their observer roles in the Organization of the Islamic Conference. In the 1980s and 1990s, Argentina regularly exchanged nuclear physicists with Iran, which played a major role in the development of the Islamic Republic’s growing nuclear program.

Today, Iranian-Latin American relations are more comprehensive than they have ever been. Whether through political or economic agreements, virtually every country in Latin America has been affected by Iranian influence in recent years. Between March and May 2010, Brazil rejected a series of demands made by U.S. Secretary of State Hillary Clinton that Brasilia should enforce sanctions mandated by the United Nations against Iran. Brazil instead chose to act as an informal mediator in the clash between Iran and the West over the former’s right to pursue nuclear enrichment. At about the same time, Ecuadorian Vice President Lenín Moreno visited Tehran on a mission to secure financing for the construction of three hydro-electric plants. Another flurry of negotiations occurred last month.

On October 25th, President Hugo Chávez of Venezuela visited President Mahmoud Ahmadinejad in Tehran for the ninth time, chiefly to discuss oil and energy issues. This was immediately followed by a meeting between Ahmadinejad and Bolivian President Evo Morales in which Iran pledged to help Bolivia build its first nuclear reactor. Clearly, most left-leaning Latin American countries have no qualms about engaging with Iran on sensitive issues, regardless of how strongly the U.S. may feel about such engagements.

This increased level of interaction between Iran and Latin America is a reflection of both ideological and pragmatic considerations. Many of the new openings and burgeoning ties have come as a result of Hugo Chávez’ close personal relationship with Ahmadinejad, as the Venezuelan leader has been widely touted as the ideological figurehead of the Latin American new left. This left-leaning ideology is similar to that of the Iranian theocracy insofar as it shares a common antagonistic attitude towards the United States and odium for perceived U.S. imperialism. Consequently, they share the goal of creating an “alternative power structure free of the dominance of the United States.”

From a practical standpoint, both Iran and Latin America have much to gain from each other. By establishing positive relations with a growing number of Latin American countries, Iran hopes to secure allies to counterbalance the U.S.-led bloc of countries that have taken increasingly robust measures to restrict its outreach. Presumably, the Iranian regime would like to see the same sort of opposition to sanctions against their country, as already exist against the Cuban embargo. In addition to ideological factors, economic concerns are also key motivators in the closer relations between Iran and Latin America. The rich mineral and agricultural resources present in Latin America are especially attractive to Iran given the sanctions that Tehran faces. Iran is also already becoming an important source of financial credit and technicians for the region.

Following the Money: Iran’s Economic Stake in Latin America

Due to the multifaceted and, at times, covert nature of the Iranian-Latin American relationship, it is difficult to pinpoint with any great accuracy, macro-level data concerning bilateral trade and investment. However, some figures do help to illuminate just how extensive the relationship is. Iran transacted more than 2.5 billion USD in trade with Latin America in 2009, mostly consisting of imports. Brazil, Argentina, and Ecuador are Iran’s top commercial partners in the region, while Ecuador and Peru are the two leading importers of Iranian goods.

The largest recipients of Iranian funds have been members of the Bolivarian Alliance for the Peoples of our America (ALBA), the regional trade and integration organization. As of 2007, Iran had announced 19 projects on its docket scheduled for Nicaragua. Iran is thought to have been a major contributor to Venezuela’s nuclear energy research and development. By 2010, it had, according to Iranian-owned news source PressTV, carried out over 80 projects in Venezuela. This includes the creation in 2007 of a 2 billion USD fund to jointly sponsor projects throughout the region.20 In 2007, Iran invested 1.5 billion USD in various Bolivian industries. Since 2008, Iran has loaned La Paz at least 780 million USD. In 2009 Iran extended a credit line to Ecuador worth 40 million USD. Moreover, between 2007 and 2008, trade between Ecuador jumped from 6 million USD to an astounding 168 million USD. Ahmadinejad also promised to invest 200 million USD in Ecuador in years to come. In 2009, Iran’s credit line to Cuba was boosted to 500 million USD.

Other Latin American countries have been the subject of Iranian influence as well, albeit to a lesser extent. Tehran did roughly 1.2 billion USD in trade with Argentina in 2008, and 8.2 million USD with Chile between January-May 2010. Brazil and Iran conducted roughly 1.26 billion USD in trade in 2008, an 88 percent jump from 2007. In 2009, the two countries established a trade goal of 25 billion USD. Between 2008 and 2009, Iran convened a series of meetings with Mexico to discuss how the two states could expand upon their current 50 million USD in annual trade. This is, at best, a rough sketch of the perimeters of Iranian influence in Latin America. This does not include the scores of trade agreements, memoranda of understanding, and other private or confidential agreements that have been signed. Altogether, these figures signify that Iran’s economic presence is not only deeply embedded in the region but also expanding.

Iran’s Broken Promises

The vast majority of Iranian-Latin American economic arrangements are uncontroversial in nature, such as the recent establishment of a joint Venezuelan-Iranian auto manufacturer. Nonetheless, some Iranian economic exercises in Latin America have been more worrisome for the U.S. because of its belief that there are grounds for concern over Iran’s apparent use of Latin American financial institutions to evade punitive international sanctions called for by the United Nations. For example, the Venezuelan International Development Bank is owned in its entirety by the Iranian Toseyeh Saderat Bank. All members of the International Development Bank’s board of trustees are Iranian citizens. In addition to being a means for Iran to circumvent international sanctions, the bank also has been implicated in funding Washington-designated terrorist organizations such as Hamas and Hezbollah.

The effort and resources spent on creating this network of coordination and cooperation have raised the ire of critics in both Iran and Latin America. Ahmadinejad’s opponents have argued that Iran’s massive investments in the region are unnecessarily risky and provocative given the area’s historic political instability and the United States’ perception of these initiatives as threatening. Furthermore, Latin American relations with Iran have proven divisive in the Western Hemisphere. Some states, including Venezuela, are ardent supporters of Iran’s presence. Others, such as Brazil, are prepared to collaborate with Iran but are far less enthusiastic backers of the Ahmadinejad government.

Incoming Brazilian President, Dilma Rousseff, has suggested that under her government, Brazil will maintain friendly relations with Iran, though she may have put their relationship at risk by condemning Iran’s decision to sentence a woman to death by stoning this year as “barbaric.” Rousseff has indicated that she would like to use Brazil’s relations with Iran to “influence” the Islamic Republic’s behavior. On the other hand, there are some nations, such as Argentina, that are outright suspicious of the Iranian presence in the region. This has produced several low-level regional feuds; for instance, Brazil and Argentina rejected Venezuela’s request for aid to construct nuclear reactors until Iran was no longer involved in the project.

A collateral concern for Latin Americans seeking to cooperate with Iran has been the charge that Tehran is inconsistent in following through with its promises. As observed by Douglas Farah, formerly of the New York Times and a contributor to the Wilson Center’s 2008 report on Iranian-Latin American relations:

The Bolivarian revolution claims as principles equality, secularism, socialism, women’s rights, and mass participation in governing. These are directly opposed to the goals of creating a theocracy where women’s rights are denied, democratic participation is circumscribed by religious dictates and theologians set social and economic policy based on their interpretation of Koran, rather than the writing of Simón Bolívar. This lack of a more broad-based set of shared values helps explain Iran’s behavior in the region. One explanation can be found by looking at Iran’s promised economic aid, often undelivered, and its promises of diplomatic relations, which are promptly fulfilled.

Tehran’s critics insist that a good portion of the billions of dollars in proffered aid and infrastructure projects have simply failed to materialize.34 This has been particularly problematic for Nicaragua, which relies more heavily on foreign assistance than most other states in the region.

An Unlikely Threat: Iranian Political Involvement in Latin America

Some of Iran’s political initiatives in Latin America are little more than symbolic gestures, with few or no tangible payoffs. Examples include Iran’s observer status in ALBA, Daniel Ortega, honoring Ahmadinejad with a Medal of Honor, and Iran erecting a statue of South America’s favorite proto-socialist Simón Bolívar, as determined by President Chávez.

Some aspects of Iran’s infiltration of Latin America, however, have caused considerable anxiety in the United States. In recent years, the U.S. has been obsessively preoccupied with the possibility of another terrorist attack. Some analysts in Washington have gone so far as to suggest that Iranian-backed terrorists may now have a state sponsor in what the United States considers its “backyard.” While allegations of a growing Iranian military presence in Latin America—particularly in Venezuela—remain largely unsubstantiated, they have, however, managed to influence foreign perceptions.

In an April 2010 report, the U.S. Department of Defense implied that Iran has deployed some elements of its “Qods Force,” a paramilitary arm of the Iranian Revolutionary Guard, in Venezuela. Farah also raised a number of allegations concerning military aspects of the Iranian presence in Latin America. Specifically, he argued that Iran kept members of the Qods forces in its embassies throughout the region (in Cuba, Venezuela, Nicaragua, Colombia, Mexico, Chile, Uruguay, Argentina, Brazil, and Ecuador).

Another allegation he has made is that Iran has been giving 30-to-90 day courses on “intelligence training, crowd control, and counterintelligence” to Venezuelan, Nicaraguan, Ecuadorian, and Bolivian officials. He also claims that members of Hezbollah have begun to cooperate with the Revolutionary Armed Forces of Colombia (FARC), the guerilla organization implicated in the country’s massive cocaine industry, and Euskadi Ta Askatasuna, the Basque separatist organization. This particular allegation seems to have been at least partially legitimized by the 2008 arrest of three suspected Hezbollah members accused of laundering Colombian drug money and funneling it into their organization.

Iranian-backed terrorists have conducted acts of mayhem in the hemisphere before. Most notably, Hezbollah, which has been definitely connected to two notorious attacks in Buenos Aires against the Jewish embassy and a Jewish community center during the 1990s that left over 100 dead and 200 injured. Therefore, it is the demonstrably the case that, at least under certain circumstances, Iran may be willing to commit acts of terror in the Americas.

However, it is important to remember that most accusations concerning the Iranian presence in Latin America remain nothing more than unsubstantiated allegations. Moreover, it has to be understood that Hezbollah and the Iranian Revolutionary Guard operate as both military and political institutions. Thus, even if it were possible to conclusively demonstrate that Hezbollah or the Qods Force had a physical presence in Venezuela, it would not necessarily indicate that their function was militaristic in nature. Allegations such as those noted above have frequently been used by right-leaning politicians both in the U.S. and in Latin America for the sole purpose of creating fear and stirring up hatred against leftists. It is likely that, at least to some degree, such allegations are exaggerations being made in order to demonize Venezuela and other leftist governments. In reality, the Iranian-Bolivarian relationship is far more rhetorical than military-strategic in nature, and the likelihood of a military threat against the U.S. originating from Iran via Latin America’s leftist regimes is highly unlikely.

Washington should, however, have an element of concern about the Iranian presence in Latin America for a number of reasons. These include the development of an “Axis of Oil” or an “Axis of Authoritarianism,” both of which could be seen as being in opposition to Washington’s domestic and global interests. These two categories refer to blocs of countries that have a vested interest in checking U.S. hegemony. The “Axis of Oil” thesis focuses on how states like Venezuela and Iran could use their oil production and membership in the OPEC oil cartel as leverage in negotiations with the U.S.  Washington’s proponents of the “Axis of Authoritarianism” thesis cite a complex web of brotherhood, linking authoritarian regimes across the globe, including Russia, China, Iran, and Venezuela (which they often cite as an authoritarian state, despite the dubious justification behind such a claim). While the relations between leftist governments in Latin America and Iran may seem to represent “balancing” in the traditional security sense, there is also an ideological component to these new ties insomuch as they also represent a collective rejection of the liberal norms and values espoused by the West.

Should either of these theories prove even remotely accurate, it would greatly complicate the United States’ ability to exert effective leverage against these states, since conflict with any one of them individually could prompt a response from the entire axis. One clear example of this actually occurring was Venezuela’s support for Hezbollah during the Israel-Hezbollah war. Of course, should such an axis come to exist as a concrete alliance, the superficiality of their common interests would likely prevent reliable coordination between its members from becoming too profound. Nonetheless, it goes without saying that an enemy with international allies is always more difficult to combat than an isolated one.

What the U.S. Must (Not) Do

Given the complications that the Iranian influence in Latin America presents for policymakers in Washington, it is important to consider carefully the United States’ options for addressing the new reality taking shape. In his article on Venezuelan-Iranian relations, Heritage Foundation scholar Ray Walser offers a number of flawed policy prescriptions for the Obama administration. These include supporting opposition elements in Venezuela, applying sanctions against Caracas, similar to those imposed on Iran, developing better monitoring of the alleged terrorist presence in the region, disrupting Venezuelan oil supplies, and increasing U.S. support for regional allies.

This Cold War-inspired response, which is typical of the way many American conservatives view the Iranian-Latin American relationship, would almost certainly be the most counterproductive of Washington’s range of options. This is because the Iranian-Bolivarian relationship is largely grounded in a shared opposition to American intervention and the thrust of its diplomacy. As Farah argues, Nicaraguan President Daniel] Ortega has declared the Iranian and Nicaraguan revolutions are "twin revolutions, with the same objectives of justice, liberty, sovereignty and peace … despite the aggressions of the imperialist policies." Ahmadinejad couched the alliances as part of "a large anti-imperialist movement that has emerged in the region."

Any response to Latin American initiatives that focuses on outside intervention in the region can only serve to lend credibility to Iranian and Bolivarian claims of neo-imperialism on the part of the United States. The wounds of U.S. intervention in Latin America are still very fresh in a number of countries and, thus, any attempt to strong-arm Latin American leaders into shunning Iran would likely be condemned as overt intervention. Such a role could also further reduce the narrowing opportunity for meaningful and constructive U.S.-Latin American engagement.

There may well be no effective short-term U.S. response to the Iranian-Bolivarian initiatives now taking place. As New America Foundation scholar Flynt Leverett argues: U.S. policymakers need to remember that, even for a global hegemon, to govern is to choose. Washington cannot continue to disregard the impact of its foreign policy choices on the interests of key energy-producing states like Russia, Venezuela and Iran if it expects these states not to use their market power in ways that run counter to U.S. preferences.To some degree, the U.S. must acknowledge that its disregard for established norms of international sovereignty during and since the Cold War have produced a significant ideological backlash in Latin America. As a result, if the United States wishes to minimize any threat that the Iran-Latin America relationship could pose, its best option is to break from its own interventionist mentality, and adopt a more cooperative and respectful approach toward foreign relations.

Should Washington take norms of international behavior more seriously in the future, states like Venezuela and Iran will have less ground on which to criticize the United States. Should the U.S. demonstrate a continued lack of regard for national sovereignty, it will largely legitimize the perception of Iran and a number of Latin American states that Washington, in fact, is an imperial power. As a result, those states will surely, as any state would under similar conditions, seek to protect themselves from the U.S.

In the short-term, the U.S. is going to have to accept that it is powerless to discourage or contain expanding Iranian-Latin American relations. Only a long-term solution can be effective. The U.S. will almost certainly be challenged in the future by an axis of states that stand in opposition to its hegemony. However, a hasty, intervention-centric response will only serve to exacerbate this situation. Given that perceived threats against U.S. security interests arising out of the Iranian-Latin American relationship are unrealistic, this state of affairs should be tolerable and certainly does not warrant the risks associated with a reckless response on the part of the United States, which was a prominent feature of the “bad old days” of overtly antagonistic U.S.-Latin American relations.

Geoff LeGrand is an analyst for the Council on Hemispheric Affairs, from where this article is adapted.


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