Hard Power Drained, Soft Power Ignored
A referendum was held in Venezuela which would make changes to the Constitution in that country. The Presidential term of office would be extended, and changes would allow Chavez to remain in office indefinitely, assuming he could be re-elected. Recent news indicates that the proposed changes have not been ratified, in a close vote.
An article by Robin Hahnel from MRZine provides a fuller explanation of the changes proposed by Chavez and the connotations of the referendum.
The mainstream media narrative has been flaming Chavez. It's as if Cointelpro, the CIA infiltration of US media during the Cold War, was back in control of our supposedly unbiased media. Stephen Lendman's article on Venezuela, "Coup D'Etat Rumblings in Venezeula", explains the covert efforts of our government to overthrow Chavez. This despite the clear popular mandate the populist firebrand leader carries.
Perception management is a crucial game in geopolitics. In most cases, propaganda is subtle, but for some reason efforts at subtlety are dropped when dealing with the Empire's backyard in Latin America. Perhaps it's the idea that we control our Hemisphere--with Iraq taking the level of hubris it did, on the other side of the world, it's perhaps no wonder Cuba and Venezuela make the Empire boil in rage. How dare Chavez nationalize his oil industry! How dare Chavez not take our money! Well, Chavez has been content to sell to the Yanquitos, but he's now threatening to stop exports of oil.
Chavez is trying to move away from the dollar, and a partial sale of Citgo, the US distribution outlet owned by Venezuela, is in the works. The deal would relinquish ownership over several refineries and many stations, and comes alongside a threat by Chavez to stop Venezuela exports of crude to the US (the refineries process the crude--Venezuela's oil is the heavier type). Thousands of jobs could be at stake if Citgo isn't sold and Venezuelan oil dries up.
Some might remember Chavez's gift of heating oil to lower income Americans in New England not too long ago.
Chavez clearly understands the game of perception management, which is really political scheming through the media. Yet the media in Venezuela can be quite anti-Chavez, yet manage to continue to broadcast. So even without a State-owned media monopoly, Chavez can mobilize a popular base which has been marginalized and under-represented for decades under more despotic leadership in the past.
Is Chavez a dictator? Our media has framed the referendum as if Chavez were seeking appointment for life. Chavez has apparently turned the referendum into a plebiscite on his popularity, which is a crafty bit of perception management considering he is not facing re-election.
Under constant pressure from Right wing critics inside and outside the country, Chavez must know his popularity is his best insurance against a coup. Knowing the US and the corporatist interests it represents would dearly love a regime change, Chavez is under constant threat. Because of Iraq, gunboat diplomacy might not be too effective; as a matter of fact a US-led attack could backfire and unite Venezuelans behind Chavez, who's largely considered anti-American (although Chavez's anti-Americanism may simply reflect his opinion of Bush and the neocons.)
Interestingly, military options have been taken off the table by the Iraq and Afghan quagmires. Tough-talking Bush simply can't take military action against Chavez, should it digress into a protracted guerrila war. A broad US covert action to end Chavez's rule clearly persists--an intercepted CIA memo outlining the effort was recently made public in Venezuela. {See the Petras article in Counterpunch.}The US could support anti-Chavez elements in the country, but little more.
The US's closest ally is in neighboring Colombia. Utilizing Colombian armed forces would be tantamount to starting a whole new front as Venezualan allies come to their aid--not necessarily in Latin America but perhaps even in the Middle East. Threatening to a war with more than two participants invites an arms race. Weaker nations have no choice but to form alliances to protect themselves from aggression by neighbors with superior military strength.
Many of the US' problems in dealing with Chavez arise frm the abandonment of soft power in favor of using hard power, which can be defined as deploying military force and projecting State power regardless of its appeal to the host country. While hard power may allow for easy regime change, decisive victories can't be assured.
Hard power also tends to push out soft power, which is more cultural and economic, and may require multinational cooperation. The effectiveness of soft power is measured by its receptivity and staying power. Hard to measure, soft power comes in many shapes and sizes, and its impact can be measured in terms of personal interconnectedness, shared cultural values, and economic interdependence.
In Venezuela's case, the US has insufficient hard power at its disposal. Using military force would not be prudent at this juncture, even if the resources were available. The US has simply used to much hard power up in Iraq to
Shunning Multilateralism
Before the war, diplomacy with Iraq was viewed by neocons to be a means by which Saddam could avoid accountability. Looking back, we see that he had nothing to hide. The multinational organizations the UN and IAEA provided accurate assessments of Iraq's WMD capability that were ignored by the war-hungry neocons.
The neocons emphasis on punitive sanctions and miltary aid or action--hard power--really undermines the effectiveness of soft power. The problem with hard power is not so much that soft power wanes, but more how much policymakers disdain alternatives to hard power.
The UN is the best example of ignoring soft power. Neocons resented the way the UN had fallen under Communist influence. Seeking strength in numbers, the Soviet Union fought European/American supremacy by gathering under its banner many third world countries, who would vote in unison to give Communism an advantage within the multinational environment of the UN. General distrust of the UN among fervently anti-communist, pro-hard power Americans followed.
A fear of world government is common among the far right. Conspiracy theories envisions rule over the US by an international body, the New World Order, etc.. This paranoia was mirrored in the idea that American troops would be commanded by non-Americans, a hallmark of cooperation of multilateral military actions. Someone may be commanding who is not an American.
Memories of the UN's anti-American bias would shape Bush/Cheney's opinion of multilateralism. Look at John Bolton's contentious period as Ambassador to the UN.
Hard power enthusiuasts tend to think multilateral military engagements minimize American power. Most long-term actions by multinational forces aren't that effective from a hard power point of view, although they excel at peace-keeping. Unleash American armies, under American control, unrestrained by international law or treaty, and anything would be possible, or so the idea went.
Nothing the neocons have done would seem to value international cooperation or the rule of international law. And in an ironic twist, it's been the use of torture tactics that has done the most to tarnish American image, which is crucial in efforts to win hearts and minds through the exercise of soft power. The Abu Ghraib scandal, followed with revelations concerning the treatment of prisoners at Guantanamo and the practice of rendition have undermined the role of multilateralism, dragging the US slowly into the league of a pariah state. Coincidentally, one other state is a role model for the US in this regard: Israel. Israel comes into constant friction with UN mandates. American treatment of Arabs mirrors Israel's behavior in the West Bank and Gaza, with an addiction to hard power in dealing with its neighbors. Israel receives limited multinational support as a result. Absent any meaningful participation by multinational bodies, peace discussions find it that much harder to gain traction. The recent Annapolis conference is a perfect example.
Unlike Israel, the US has to protect its international stature to preserve its leadership position. More is at risk because we strive not to dominate our region militarily, but rather establish a unipolar precedent as the leader of the world. If our goal were simply to exist--like Israel--we might be content to dominate our neighbors militarily and perhaps economically. We, on the other hand, seek to extend US cooperations to satisify sociopolitical demands that are chiselled into the American psyche.
The nationalist pop that Bush got out of invading Iraq helped him win re-election (along with massive disenfranchisement of Ohio voters.) He was hardly the first to drape himself in the flag to win some votes, nor shall he be the last. Hillary has announced her intention to keep the US in Iraq, proving the unthinking exercise of hard power is by no means limited to the GOP. So the problems and afflicitons unique to the exercise of military force will continue to plague us for quite some time.
Using hard power intoxicates those who wield it.
If unchecked, hard power enthusiasts will pursue ever more military spending on hardware. Many hard power backers are vested financially in the military industrial complex, where their lobbying influence earns contracts to supply the war machine. Still, not all advocates for the use of military force are participating in the windfall; they are to their credit idealogues, at least those whose financial dealings are known.
Building submarines and planes satisfies domestic political constituencies dependent upon the War economy, far more than does financing the actual fighting of wars. Making toys that go boom is simply better, and drawn-out productions and development cycles provide a more steady and predictable source of income.
There is little profit in using soft power for the merchants of death, the people who make money from war and profits from colonial exploitation. It's this tapeworm segment of our society that presents the greatest threat. By creating a state of permanent war, they hope to turn fear and suffering into privilege and power, no matter what the cost. Unless a society is willign to confront its advocates of hard power, and contain their influence, war is inevitable. Reason cannot fall to madness, and the use of war comes always at greater cost than benefit, excepting of course the warmongers and their bloody profits.
Soft Power Multilateralism
Soft power, on the other hand, could be very useful in containing Soviet influence. Multilateralism helped containing hard power gone mad during the Cold War, especially when it was clear nothing could change the outcome.
During the Cold War, both the US and Soviets could devote nearly endless resources to their war machines. If hard power enthusiasts took over, they could keep the war going on indefinitely. A method was needed to stop the dogs of war; in an age where both sides can exercise the Doctrine of Mutual Assured Destruction, hard power in ts purest form represent an unlimited exchange of nuclear weapons, an unequivocable lose/lose for all participants.
Communist military forces were weaker qualitatively but not quantitatively, so they engaged in a nuclear arms race that seemed to push the Doomsday Clock ever closer to midnight. Balance-of-forces agreements with the Soviets were a successful of the use of soft power to restrain and contain Soviet hard power.
Nations not involved with the fray have so much to contribute in mediating the conflict. Non-participants can contribute vastly to the recovery and reconciliation required in the aftermath of victory.
Arms control agreements might not be as sexy as blowing some heathen commies to hell, but looking at Reagan's legacy, the negotiated end to the arms race signified American victory over the Soviets. Bilateral agreements and Reagan's firm caveat "trust but verify" testify to the importance of restraining hard power. No bullets were fired to achieve the victory; in the end all that was required was a handshake and a pair of signatures.
Soft power can do almost everything that hard power can, given patience, and require far less sacrifice. With decisive victories through military intervention becoming quite rare, using soft power can easily surpass the results earned through the exercise of hard power, and come with far fewer consequences.
Multinational Hard Power
Multinational participation can ease the demands that military force brings, sharing the casualties and costs. While Iraq has suffered, and our military has been worn done with it, drained by the task of nation-building with miminum multilateral participation.
While a coalition of the willing was ostensibly created, the lack of staying power shows that multilaterism rarely works in the exercise of hard power, or for that long. UN peacekeeping efforts in places like Cyprus and elsewhere have shown that multilaterism can use hard power effectively over the long term, however. UN-led, the Korean intervention also held back the communist tide, but did lack a decisive end like that of WW2, the "signing peace treaties on a battleship"-type ending.
For political types seeking re-election, no glorious end could have come out of Korea short of destroying China, who'd entered the war. The UN-led effort didn't have the stomach to go after China, in the same way the Coalition formed to throw Saddam out of Kuwait wouldn't end his regime. In the eyes of some, the US had abandoned the Shia marsh Arabs who'd risen up in rebellion to end Saddam's reign in 1991. The Kurds were similiarly victimized by the US' inability to deploy military force, the argument goes.
Compared to the emphasis on global cooperation during Gulf war of '90-'91 under George Herbert Walker Bush, a true globalist, his son's efforts at coalition-building look anemic. The lack of broader military participation in the current campaign can be traced to the perception that the US--if unhindered by the sensitivities of its coalition partners--could have easily replaced Hussein instead of ending that war. Neocons also looked glumly upon the lack of clear winning outcome in Gulf 1, which they may have seen as contributing to Bush 41's loss to Clinton in 1992. Clinton's "It's the Economy, Stupid" had far more to do with the victory, but in the starry eyes of the hardcore believers in the exercise of hard power, the road to Baghdad beckoned and the prize lay in finishing Saddam once and for all.
Post-invasion, the US intends to monopolize Iraq. Whatever benefits multilateralism offers are diminished if other participants join in the looting of Iraq oil, share the plunder, and deprive us of more. With hundreds of billions and thousands of lives "invested" in Iraq, leaving now and suddenly would run counter to our colonialist aims.
If multilateralism means losing control over Iraq's oil, or ceding any authority to non-US military leadership, we don't want it. Yet our unwillingness to share in the spoils means we have no one to share the burden of continuing the occupation. The British, up to a point, sustained their military presence, and while they did so had access to bidding on Iraqi oil development contracts offered select firms. Now, with their military presence scaled back dramatically, I don't where British companies now stand vis-a-vis the bidding.
As long as the US remains alone in Iraq, the image of an imperial US will remain. Our colonialist intentions will seem clear. Also, our international stature will continue to be diminished and potential alliances which serve US interests will be unavailable both in the Middle East and elsewhere.
Traditionally, groups of nations grouped under a common ideology have been viewed as a hard threat, rather than a soft one. For instance, the spread of communism to Cuba led to the stationing of Soviet missiles there in 1962. Communism was really framed as a threat to capitalism, in a bipolar black and white world. America really couldn't see her cultural strength or economic superiority ever threatened by communism so the threat was never perceived to be anything other than hard power. Yet the Soviet bloc in the UN came to dictate many international polocy positions, to the chagrin of Americans who saw the UN as enabling Soviet manipulation.
We see in a pan-Arab block a tremendous threat perceived to the security of Israel, which we know is the tail that wags the dog when it comes to US foreign policy in the Mideast, which will tolerate no challenge to Israeli hegemony. Osama bin Laden represents the largest threat because he could unify Muslims. Should the Arabs unite, Israel would presumably be targetted; by keeping Muslims divided, so too is the theoretically quantity of hard power that the combined bloc could bring to bear against the US and Israel.
The idea of an us vs. them, bipolar world may serve as a comfortable post from which to confront a Communist-type rival, but it just isn't accurate any more. The era of two ideologies competing on the global stage is over--capitalism won, much to the chagrin of the recipients of billions in government contracts during the Cold War. Radical Islamic terrorism was made an enemy of choice, one theory goes, in an effort to sustain the war economy so threatened by the demise of the Soviet Union. Early papers from people like Wolfowitz, Perle, and others who'd go on to become neocons outlined a new enemy in Saddam Hussein. A Defense Policy Guidance paper by Wolfowitz was eerily prescient of the later Clean Break (1996) strategy formulated in essence to fight Israel's enemies. A webpage elaborates:
Neocon philosophies flowed from there, worming their way up to the highest echelons of US foreign policy with the appointment of Bush by a 5-4 vote of the Supreme Court.
Reality Check
The results are in! In Iraq, we've seen a rag-tag group of insurgents take the world's mightiest army to a standstill. And in Afghanistan, the Taliban control up to 50% of the territory. These hard metrics put hard power to test, and it fails. Hard power fails when rosy predictions are befouled by reality, and the first plan begins to stray, or military goals become political ones.
I've said that Iraq has been so mismanaged that it appears to be have been an intentional disaster, which would allow the US to continue the occupation. I've seen little to contradict this theory, although many people say that our leaders did actually believe that we'd be welcomed with open arms and be out by Christmas. Turns out that the same people who predicted an easy invasion, paid for by Iraqi oil money, were the same ones who'd been talking up the threat of WMD and Iraq's link to terrorism, both cherry-picked goals of the White House Iraq Group and its Pentagon liasons working at the Office of Special Plans.
Now, with Maliki and Bush working toward a Status of Forces Agreement, an enduring presence in Iraq seems inevitable. A Status of Forces Agreement requires Congressional approval, so Bush took advantage of Thanksgiving Break to call his long-term troop presence proposal something else. As a result, the US will most likely be forced to defend Maliki from all enemies foreign and domestic, for decades into the future.
Now if our initial intent, as spelled out by the neocons, were simply regime change, we're suffering from a horrible case of mission creep. If the original purpose of the invasion were to colonize Iraqi oil, though, we have very little to show for it. If however we invaded to Iraq to split Iraq into small manageable chunks, as part of a bigger plan to fracture a unified Arab front against Israel, then our pre-war planning, as bad it was, hasn't been a problem. If anything the incompetence early-on laid the seeds for intensification of hostilities in Iraq, not only between the US and Iraqis, but civil war as well.
It's my opinion that the civil war was engineered and desired, as a means of stretching the US occupation in Iraq on for years. Perhaps policymakers knew that harvesting Iraq's oil would take decades and the only way to control their oil was by coopting an Iraqi government, turning it into a US proxy, and maintaining it through force of arms that an occupation would both require and provide.
We have in short been had. Iraq is the symptom of a far deeper problem: which is bias in US foreign policy towards hard power. The Bush administration is rife with the influence of military industrialists who have much to gain from the pre-requisite spending needed to sustain the occupation. Somehow, our military spending is still very much focused on expensive weapons systems despite the fact that the US national security faces a assymetical threat, not a foe with a head that can be cut off or tanks to blow up.
In short, we've prepared to fight a conventional war, we're the best at using our hard power, but we can't use a hammer to kill a flea. Assymetrical warfare require a major emphasis on winning hearts and minds. It's not enough to spin a unconventional approach to fighting insurgencies, the occupying power must deploy its resources--always finite--to certain approaches which exclude alternatives. The exercise of conventional military power is not going to get the results, or do what it can cheaply.
Investing in rebuilding infrastructure is crucial. Looking at Iraq, what we see instead is crony capitalism gone wild, with large, no-bid contracts extended to players with administration ties, who in turn subcontract out the actual work. (For more, see my take on disaster shock capitalism, "Wild Ride Down the Path...") The end result is corruption and a reconstruction disaster, in which the rosy rhetoric of a noble rebuilding ("mission accomplished") is achieved only in the fantasy world of Presidential addresses, far from the streets of Baghdad (or New Orleans, for that matter.)
Results must be real to matter. Exercising hard power has the bad effect of making domestic political priorities matter more than how the occupation plays over there. After all, what matters more to politicians--a rebuilt Iraq or perpetuating a stream of political patronage through the next election cycle? Budgeting requires hard choices, and the exercise of hard force will mean one approach comes at the expense of another. Hard power is expensive and depletive of resources--in short unsustainable for even the strongest of empires.
As long as Iraq is economically weak, it remains dependent on the US. The amount of money needed to manage Iraq will continue to increase.
Without full political representation in Baghdad, resentment by Sunnis and Kurds will simmer and threaten the regime. Even if sectarian violence drops off, the seeds of it remain to threaten whatever future stability can be achieved. The US is actually supplying Sunnis with arms, in an example of the use of military aid to arm both sides in a conflict it created, a wholesale bonaza to arms traders no doubt.
And in the north of Iraq, Kurds are in a de facto state of war with Turks. The neo-terrorist PKK (one man's terrorist is another man's freedom-fighter) threatens to spread the Iraq contagion out of the country and ignite Kurdish separatists in Turkey, leading to a downward cycle of reprisals and human right abuses. Also, the persistent presence of the PKK nags the idea of Iraq as a sovereign entity, and makes the claims of the regime in Baghdad irrelevent outside its Shia sphere of influence.
American soft power will remain underutilized largely because the use of hard power and militarism over extended periods tends to crush any alternative solution to violence. Instead violence is simply piled atop previous violence, and simply produces more violence. Eventually it matters who fired the first shot, or the last, or who thinks they won. In the end there are only the people who get to go home.
Multilateralism: The Other Way
Declaring North Korean, Iran, and Iraq as the Axis of Evil as Bush did in January 2002 may have made a great sound byte in the War on Terror but it also drove those nations together. North Korean missiles were sent to Iran and Iranian technology may have accelerated North Korea's nuclear weapons development, culminating in the detonation of a device there last summer.
Bush was driven in his foreign policy decisions by an overarching desire to get re-elected. Foreign policy was made subordinate to domestic political priorities, which largely involved turning traditional enemies of the US and Israel into foes in the Global War on Terror. Whatreallyhappened's Mike Riviero once said that North Korea was only put in the Axis of Evil to make the case that GWOT wasn't only about Muslim nations. Judging by the apparent unwillingness of the US to deter or stop the North Koreans from going nuclear, Mike was right: North Korean is in their for PR-purposes, and Israel's enemies are the real target of the Global War on Terror.
Under the spell of Rove's fear-based manipulation of the electorate, Bush led our foreign policy in a direction away from reality. Neocons took over and militarism dominated. Foreign policy decisions went under the spell of neocon theorists and a five-time Vietnam draft deferree Vice President Dick Cheney, or Darth Vader as is he is sometimes known. Pushing the fear button worked well for the Republicans, who knew they had to win over suburban moms and NASCAR dads. The fear of terrorism won a second term, but our foreign policy had been sacrficed for short-term political advantage in the domestic arena.
As it turned out as our credibility shrank as the Iraqi insurgency accelerated in 2004. In an effort to root out the insurgents, Bush authorized harsh interrogation techniques, despite their apparent ineffectiveness and illegality. Rumsfeld transferred Guantanamo's superintendent, a Major General Miller, to oversee all of Iraq's prisons.
The gloves would come off. The propaganda war accelerated. Iraqi insurgents were labelled terrorists as if they'd been part of 9/11. Metrics to measure the effectiveness of hard power went back in vogue, with Vietnam-era terms like body counts reappearing in the military lexicon.
Hard power displaced whatever soft power we could have used. Negotiations were shunned. Other Arab nations were excluded from participating in the remediation efforts as our mission went from regime change to occupation. Meanwhile the insurgents resorted to guerilla tactics--countering hard power with their own in a downward spiral of tit-for-tat and sectarian killing.
Fast forward three years and we see the consequences of those mistakes. US credibility is greatly diminished and we couldn't get a coalition together to fight a Saddam Hussein, or intervene in a place where we could perhaps do some good--like Darfur or Burma. Using the military so exhaustively as the leading edge of our foreign policy, we are now little more than a paper tiger. We can barely sustain our military presence in Iraq, so any new adventures are implausible.
To make matters worse, we can't hide our military weakness. Absent a draft, we have nowhere near the force we would need to practice anything more than gunboat diplomacy. Using our hard power has depleted it, and our rivals can sense that limits on our use of military force have been reached. All empires face this moment, from the age of Alexander in Afghanistan to Napoleon and Hitler in the snows of Russia.
We retain tremendous hard power resources. We can lob some missiles at our enemies, but we can't do any real damage or implement regime change through force-of-arms. With no military card to play, Chavez, Ahmadinejad, and any anti-American leaders out there can say and do pretty much as they please. In hindsight, if we had utilized our soft power more effectively, our hard power could now be utilized more efficiently. Thus the Iraq adventure has shown that the exercise of hard power is most effective when used sparingly.
Bush and Cheney wanted to flout the US military power, so now we are left with a lot less of it by which we can cajole or exert influence. The end result is also that alliances have formed around Russia and China, who've taken our military weakness to mean that they can no longer be contained. The olive branch Putin extended after 9/11 has been retracted, due in part to Cheney's anti-Russian rhetoric, and the pushing of a missile shield in Eastern Europe, ostensibly to stop Middle Eastern rockets but not so coincidentally capable of stopping missiles from Russia as well. Could we be headed for a new arms race? See an article by Mike Whitney on Putin here.
If Chavez were to tie down considerable US military forces, Iran could be more or less immune from attack. The two nations have signed a mutual defense pact, continue to trade weapons, and could easily institute an oil embargo between them that could do havoc to oil-dependent economies or, if targetted toward the US, could eliminate access to Venezuelan crude while raising prices of the commmodity. Chavez has tried to sway OPEC towards taking political action through oil production cuts and/or price increases but has been stymied by the Bush-allied Saudi monarchy.
Like the case in Iran, military action against Chavez could backfire and strengthen anti-US resolve. Such is the price of using the military in wars-of-choice, open-ended and without conditions for victory. Victory has traditionally meant withdrawal but Bush has reminded us of our enduring presence in Korea and Germany, not so much as testimony to our victories there, but to flog us with the idea of nearly endless occupation over which we citizens, mere serfs, have no say. The power of Congress--the people's representatives--to ratify treaties under the Constitution can be subordinated, if treaties by another name--open-ended commitments and foreign entanglements--are made semi-permanent by the stroke of a President's pen.
War on the Dollar
No country can match the US' soft power: the ability of America to influence other nations by persuasion and cultural influence. Still, grouped together, transnational blocs can counterbalance the impact of US soft power. Nowhere is this clearer than with foreign governments' use of the dollar as their currency of choice in conducting international trade and banking.
Until very recently, international sales of oil were traded in London or New York markets only and denominated exclusively in US dollar or British pounds. Oil producers in the Gulf have been collecting petrodollars, occasionally spending them to buy military hardware from the US that they can't use, which gather sand in the desert. As a reserve currency, the dollar has been in higher demand than it otherwise would. If the petrodollars were to enter circulation in the US, they'd contribute to inflation and degrade their value.
Dozens of nations have sought to reduce their dollar holdings. The motive for the shift may be political or economic, considering how much the dollar has fallen against the English pound and euro. Whatever the reason, it's clear that the advantage that the US currency as the international reserve has had will be largely lost, if indeed a suitable replacement can be found. (It's also likely that political considerations will make the choice of a replacement for the dollar difficult, if not impossible.) The euro may be the best substitue at present, but it's unlikely that China, Japan and other big holders of dollars would liquidate holdings to buy it at the premium it now commands.
Linda Heard discussed a new alternative to dollar-denominated banking:
Bolivian President Evo Morales was recently interviewed on Democracy Now and brought up some of the issues important to Latin Americans. The interview is posted here.
Multilateralism may be a very effective tool to combine the soft power of many nations, and provide a credible alternative to a financial status quo revolving around the US dollar. In this regard, soft power exercised in the name of anti-Americanism could do far greater damage than any combined military alliance against us, which we could defeat or contain.
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An article by Robin Hahnel from MRZine provides a fuller explanation of the changes proposed by Chavez and the connotations of the referendum.
The mainstream media narrative has been flaming Chavez. It's as if Cointelpro, the CIA infiltration of US media during the Cold War, was back in control of our supposedly unbiased media. Stephen Lendman's article on Venezuela, "Coup D'Etat Rumblings in Venezeula", explains the covert efforts of our government to overthrow Chavez. This despite the clear popular mandate the populist firebrand leader carries.
Perception management is a crucial game in geopolitics. In most cases, propaganda is subtle, but for some reason efforts at subtlety are dropped when dealing with the Empire's backyard in Latin America. Perhaps it's the idea that we control our Hemisphere--with Iraq taking the level of hubris it did, on the other side of the world, it's perhaps no wonder Cuba and Venezuela make the Empire boil in rage. How dare Chavez nationalize his oil industry! How dare Chavez not take our money! Well, Chavez has been content to sell to the Yanquitos, but he's now threatening to stop exports of oil.
Chavez is trying to move away from the dollar, and a partial sale of Citgo, the US distribution outlet owned by Venezuela, is in the works. The deal would relinquish ownership over several refineries and many stations, and comes alongside a threat by Chavez to stop Venezuela exports of crude to the US (the refineries process the crude--Venezuela's oil is the heavier type). Thousands of jobs could be at stake if Citgo isn't sold and Venezuelan oil dries up.
Some might remember Chavez's gift of heating oil to lower income Americans in New England not too long ago.
Chavez clearly understands the game of perception management, which is really political scheming through the media. Yet the media in Venezuela can be quite anti-Chavez, yet manage to continue to broadcast. So even without a State-owned media monopoly, Chavez can mobilize a popular base which has been marginalized and under-represented for decades under more despotic leadership in the past.
Is Chavez a dictator? Our media has framed the referendum as if Chavez were seeking appointment for life. Chavez has apparently turned the referendum into a plebiscite on his popularity, which is a crafty bit of perception management considering he is not facing re-election.
Under constant pressure from Right wing critics inside and outside the country, Chavez must know his popularity is his best insurance against a coup. Knowing the US and the corporatist interests it represents would dearly love a regime change, Chavez is under constant threat. Because of Iraq, gunboat diplomacy might not be too effective; as a matter of fact a US-led attack could backfire and unite Venezuelans behind Chavez, who's largely considered anti-American (although Chavez's anti-Americanism may simply reflect his opinion of Bush and the neocons.)
Interestingly, military options have been taken off the table by the Iraq and Afghan quagmires. Tough-talking Bush simply can't take military action against Chavez, should it digress into a protracted guerrila war. A broad US covert action to end Chavez's rule clearly persists--an intercepted CIA memo outlining the effort was recently made public in Venezuela. {See the Petras article in Counterpunch.}The US could support anti-Chavez elements in the country, but little more.
The US's closest ally is in neighboring Colombia. Utilizing Colombian armed forces would be tantamount to starting a whole new front as Venezualan allies come to their aid--not necessarily in Latin America but perhaps even in the Middle East. Threatening to a war with more than two participants invites an arms race. Weaker nations have no choice but to form alliances to protect themselves from aggression by neighbors with superior military strength.
Many of the US' problems in dealing with Chavez arise frm the abandonment of soft power in favor of using hard power, which can be defined as deploying military force and projecting State power regardless of its appeal to the host country. While hard power may allow for easy regime change, decisive victories can't be assured.
Hard power also tends to push out soft power, which is more cultural and economic, and may require multinational cooperation. The effectiveness of soft power is measured by its receptivity and staying power. Hard to measure, soft power comes in many shapes and sizes, and its impact can be measured in terms of personal interconnectedness, shared cultural values, and economic interdependence.
In Venezuela's case, the US has insufficient hard power at its disposal. Using military force would not be prudent at this juncture, even if the resources were available. The US has simply used to much hard power up in Iraq to
Shunning Multilateralism
Before the war, diplomacy with Iraq was viewed by neocons to be a means by which Saddam could avoid accountability. Looking back, we see that he had nothing to hide. The multinational organizations the UN and IAEA provided accurate assessments of Iraq's WMD capability that were ignored by the war-hungry neocons.
The neocons emphasis on punitive sanctions and miltary aid or action--hard power--really undermines the effectiveness of soft power. The problem with hard power is not so much that soft power wanes, but more how much policymakers disdain alternatives to hard power.
The UN is the best example of ignoring soft power. Neocons resented the way the UN had fallen under Communist influence. Seeking strength in numbers, the Soviet Union fought European/American supremacy by gathering under its banner many third world countries, who would vote in unison to give Communism an advantage within the multinational environment of the UN. General distrust of the UN among fervently anti-communist, pro-hard power Americans followed.
A fear of world government is common among the far right. Conspiracy theories envisions rule over the US by an international body, the New World Order, etc.. This paranoia was mirrored in the idea that American troops would be commanded by non-Americans, a hallmark of cooperation of multilateral military actions. Someone may be commanding who is not an American.
Memories of the UN's anti-American bias would shape Bush/Cheney's opinion of multilateralism. Look at John Bolton's contentious period as Ambassador to the UN.
Hard power enthusiuasts tend to think multilateral military engagements minimize American power. Most long-term actions by multinational forces aren't that effective from a hard power point of view, although they excel at peace-keeping. Unleash American armies, under American control, unrestrained by international law or treaty, and anything would be possible, or so the idea went.
Nothing the neocons have done would seem to value international cooperation or the rule of international law. And in an ironic twist, it's been the use of torture tactics that has done the most to tarnish American image, which is crucial in efforts to win hearts and minds through the exercise of soft power. The Abu Ghraib scandal, followed with revelations concerning the treatment of prisoners at Guantanamo and the practice of rendition have undermined the role of multilateralism, dragging the US slowly into the league of a pariah state. Coincidentally, one other state is a role model for the US in this regard: Israel. Israel comes into constant friction with UN mandates. American treatment of Arabs mirrors Israel's behavior in the West Bank and Gaza, with an addiction to hard power in dealing with its neighbors. Israel receives limited multinational support as a result. Absent any meaningful participation by multinational bodies, peace discussions find it that much harder to gain traction. The recent Annapolis conference is a perfect example.
Unlike Israel, the US has to protect its international stature to preserve its leadership position. More is at risk because we strive not to dominate our region militarily, but rather establish a unipolar precedent as the leader of the world. If our goal were simply to exist--like Israel--we might be content to dominate our neighbors militarily and perhaps economically. We, on the other hand, seek to extend US cooperations to satisify sociopolitical demands that are chiselled into the American psyche.
The nationalist pop that Bush got out of invading Iraq helped him win re-election (along with massive disenfranchisement of Ohio voters.) He was hardly the first to drape himself in the flag to win some votes, nor shall he be the last. Hillary has announced her intention to keep the US in Iraq, proving the unthinking exercise of hard power is by no means limited to the GOP. So the problems and afflicitons unique to the exercise of military force will continue to plague us for quite some time.
Using hard power intoxicates those who wield it.
If unchecked, hard power enthusiasts will pursue ever more military spending on hardware. Many hard power backers are vested financially in the military industrial complex, where their lobbying influence earns contracts to supply the war machine. Still, not all advocates for the use of military force are participating in the windfall; they are to their credit idealogues, at least those whose financial dealings are known.
Building submarines and planes satisfies domestic political constituencies dependent upon the War economy, far more than does financing the actual fighting of wars. Making toys that go boom is simply better, and drawn-out productions and development cycles provide a more steady and predictable source of income.
There is little profit in using soft power for the merchants of death, the people who make money from war and profits from colonial exploitation. It's this tapeworm segment of our society that presents the greatest threat. By creating a state of permanent war, they hope to turn fear and suffering into privilege and power, no matter what the cost. Unless a society is willign to confront its advocates of hard power, and contain their influence, war is inevitable. Reason cannot fall to madness, and the use of war comes always at greater cost than benefit, excepting of course the warmongers and their bloody profits.
Soft Power Multilateralism
Soft power, on the other hand, could be very useful in containing Soviet influence. Multilateralism helped containing hard power gone mad during the Cold War, especially when it was clear nothing could change the outcome.
During the Cold War, both the US and Soviets could devote nearly endless resources to their war machines. If hard power enthusiasts took over, they could keep the war going on indefinitely. A method was needed to stop the dogs of war; in an age where both sides can exercise the Doctrine of Mutual Assured Destruction, hard power in ts purest form represent an unlimited exchange of nuclear weapons, an unequivocable lose/lose for all participants.
Communist military forces were weaker qualitatively but not quantitatively, so they engaged in a nuclear arms race that seemed to push the Doomsday Clock ever closer to midnight. Balance-of-forces agreements with the Soviets were a successful of the use of soft power to restrain and contain Soviet hard power.
Nations not involved with the fray have so much to contribute in mediating the conflict. Non-participants can contribute vastly to the recovery and reconciliation required in the aftermath of victory.
Arms control agreements might not be as sexy as blowing some heathen commies to hell, but looking at Reagan's legacy, the negotiated end to the arms race signified American victory over the Soviets. Bilateral agreements and Reagan's firm caveat "trust but verify" testify to the importance of restraining hard power. No bullets were fired to achieve the victory; in the end all that was required was a handshake and a pair of signatures.
Soft power can do almost everything that hard power can, given patience, and require far less sacrifice. With decisive victories through military intervention becoming quite rare, using soft power can easily surpass the results earned through the exercise of hard power, and come with far fewer consequences.
Multinational Hard Power
Multinational participation can ease the demands that military force brings, sharing the casualties and costs. While Iraq has suffered, and our military has been worn done with it, drained by the task of nation-building with miminum multilateral participation.
While a coalition of the willing was ostensibly created, the lack of staying power shows that multilaterism rarely works in the exercise of hard power, or for that long. UN peacekeeping efforts in places like Cyprus and elsewhere have shown that multilaterism can use hard power effectively over the long term, however. UN-led, the Korean intervention also held back the communist tide, but did lack a decisive end like that of WW2, the "signing peace treaties on a battleship"-type ending.
For political types seeking re-election, no glorious end could have come out of Korea short of destroying China, who'd entered the war. The UN-led effort didn't have the stomach to go after China, in the same way the Coalition formed to throw Saddam out of Kuwait wouldn't end his regime. In the eyes of some, the US had abandoned the Shia marsh Arabs who'd risen up in rebellion to end Saddam's reign in 1991. The Kurds were similiarly victimized by the US' inability to deploy military force, the argument goes.
Compared to the emphasis on global cooperation during Gulf war of '90-'91 under George Herbert Walker Bush, a true globalist, his son's efforts at coalition-building look anemic. The lack of broader military participation in the current campaign can be traced to the perception that the US--if unhindered by the sensitivities of its coalition partners--could have easily replaced Hussein instead of ending that war. Neocons also looked glumly upon the lack of clear winning outcome in Gulf 1, which they may have seen as contributing to Bush 41's loss to Clinton in 1992. Clinton's "It's the Economy, Stupid" had far more to do with the victory, but in the starry eyes of the hardcore believers in the exercise of hard power, the road to Baghdad beckoned and the prize lay in finishing Saddam once and for all.
Post-invasion, the US intends to monopolize Iraq. Whatever benefits multilateralism offers are diminished if other participants join in the looting of Iraq oil, share the plunder, and deprive us of more. With hundreds of billions and thousands of lives "invested" in Iraq, leaving now and suddenly would run counter to our colonialist aims.
If multilateralism means losing control over Iraq's oil, or ceding any authority to non-US military leadership, we don't want it. Yet our unwillingness to share in the spoils means we have no one to share the burden of continuing the occupation. The British, up to a point, sustained their military presence, and while they did so had access to bidding on Iraqi oil development contracts offered select firms. Now, with their military presence scaled back dramatically, I don't where British companies now stand vis-a-vis the bidding.
As long as the US remains alone in Iraq, the image of an imperial US will remain. Our colonialist intentions will seem clear. Also, our international stature will continue to be diminished and potential alliances which serve US interests will be unavailable both in the Middle East and elsewhere.
Traditionally, groups of nations grouped under a common ideology have been viewed as a hard threat, rather than a soft one. For instance, the spread of communism to Cuba led to the stationing of Soviet missiles there in 1962. Communism was really framed as a threat to capitalism, in a bipolar black and white world. America really couldn't see her cultural strength or economic superiority ever threatened by communism so the threat was never perceived to be anything other than hard power. Yet the Soviet bloc in the UN came to dictate many international polocy positions, to the chagrin of Americans who saw the UN as enabling Soviet manipulation.
We see in a pan-Arab block a tremendous threat perceived to the security of Israel, which we know is the tail that wags the dog when it comes to US foreign policy in the Mideast, which will tolerate no challenge to Israeli hegemony. Osama bin Laden represents the largest threat because he could unify Muslims. Should the Arabs unite, Israel would presumably be targetted; by keeping Muslims divided, so too is the theoretically quantity of hard power that the combined bloc could bring to bear against the US and Israel.
The idea of an us vs. them, bipolar world may serve as a comfortable post from which to confront a Communist-type rival, but it just isn't accurate any more. The era of two ideologies competing on the global stage is over--capitalism won, much to the chagrin of the recipients of billions in government contracts during the Cold War. Radical Islamic terrorism was made an enemy of choice, one theory goes, in an effort to sustain the war economy so threatened by the demise of the Soviet Union. Early papers from people like Wolfowitz, Perle, and others who'd go on to become neocons outlined a new enemy in Saddam Hussein. A Defense Policy Guidance paper by Wolfowitz was eerily prescient of the later Clean Break (1996) strategy formulated in essence to fight Israel's enemies. A webpage elaborates:
Wolfowitz...had objected to what he considered the premature ending of the 1991 Iraq War. In the new document, he outlined plans for military intervention in Iraq as an action necessary to assure "access to vital raw material, primarily Persian Gulf oil" and to prevent the proliferation of weapons
of mass destruction and threats from terrorism.
...The guidance called for preemptive attacks and ad hoc coalitions but said that the U.S. should be ready to act alone when "collective action cannot be orchestrated.
...These concepts are now part of the new U.S. National Security Strategy. "
Neocon philosophies flowed from there, worming their way up to the highest echelons of US foreign policy with the appointment of Bush by a 5-4 vote of the Supreme Court.
Reality Check
The results are in! In Iraq, we've seen a rag-tag group of insurgents take the world's mightiest army to a standstill. And in Afghanistan, the Taliban control up to 50% of the territory. These hard metrics put hard power to test, and it fails. Hard power fails when rosy predictions are befouled by reality, and the first plan begins to stray, or military goals become political ones.
I've said that Iraq has been so mismanaged that it appears to be have been an intentional disaster, which would allow the US to continue the occupation. I've seen little to contradict this theory, although many people say that our leaders did actually believe that we'd be welcomed with open arms and be out by Christmas. Turns out that the same people who predicted an easy invasion, paid for by Iraqi oil money, were the same ones who'd been talking up the threat of WMD and Iraq's link to terrorism, both cherry-picked goals of the White House Iraq Group and its Pentagon liasons working at the Office of Special Plans.
Now, with Maliki and Bush working toward a Status of Forces Agreement, an enduring presence in Iraq seems inevitable. A Status of Forces Agreement requires Congressional approval, so Bush took advantage of Thanksgiving Break to call his long-term troop presence proposal something else. As a result, the US will most likely be forced to defend Maliki from all enemies foreign and domestic, for decades into the future.
Now if our initial intent, as spelled out by the neocons, were simply regime change, we're suffering from a horrible case of mission creep. If the original purpose of the invasion were to colonize Iraqi oil, though, we have very little to show for it. If however we invaded to Iraq to split Iraq into small manageable chunks, as part of a bigger plan to fracture a unified Arab front against Israel, then our pre-war planning, as bad it was, hasn't been a problem. If anything the incompetence early-on laid the seeds for intensification of hostilities in Iraq, not only between the US and Iraqis, but civil war as well.
It's my opinion that the civil war was engineered and desired, as a means of stretching the US occupation in Iraq on for years. Perhaps policymakers knew that harvesting Iraq's oil would take decades and the only way to control their oil was by coopting an Iraqi government, turning it into a US proxy, and maintaining it through force of arms that an occupation would both require and provide.
We have in short been had. Iraq is the symptom of a far deeper problem: which is bias in US foreign policy towards hard power. The Bush administration is rife with the influence of military industrialists who have much to gain from the pre-requisite spending needed to sustain the occupation. Somehow, our military spending is still very much focused on expensive weapons systems despite the fact that the US national security faces a assymetical threat, not a foe with a head that can be cut off or tanks to blow up.
In short, we've prepared to fight a conventional war, we're the best at using our hard power, but we can't use a hammer to kill a flea. Assymetrical warfare require a major emphasis on winning hearts and minds. It's not enough to spin a unconventional approach to fighting insurgencies, the occupying power must deploy its resources--always finite--to certain approaches which exclude alternatives. The exercise of conventional military power is not going to get the results, or do what it can cheaply.
Investing in rebuilding infrastructure is crucial. Looking at Iraq, what we see instead is crony capitalism gone wild, with large, no-bid contracts extended to players with administration ties, who in turn subcontract out the actual work. (For more, see my take on disaster shock capitalism, "Wild Ride Down the Path...") The end result is corruption and a reconstruction disaster, in which the rosy rhetoric of a noble rebuilding ("mission accomplished") is achieved only in the fantasy world of Presidential addresses, far from the streets of Baghdad (or New Orleans, for that matter.)
Results must be real to matter. Exercising hard power has the bad effect of making domestic political priorities matter more than how the occupation plays over there. After all, what matters more to politicians--a rebuilt Iraq or perpetuating a stream of political patronage through the next election cycle? Budgeting requires hard choices, and the exercise of hard force will mean one approach comes at the expense of another. Hard power is expensive and depletive of resources--in short unsustainable for even the strongest of empires.
As long as Iraq is economically weak, it remains dependent on the US. The amount of money needed to manage Iraq will continue to increase.
Without full political representation in Baghdad, resentment by Sunnis and Kurds will simmer and threaten the regime. Even if sectarian violence drops off, the seeds of it remain to threaten whatever future stability can be achieved. The US is actually supplying Sunnis with arms, in an example of the use of military aid to arm both sides in a conflict it created, a wholesale bonaza to arms traders no doubt.
And in the north of Iraq, Kurds are in a de facto state of war with Turks. The neo-terrorist PKK (one man's terrorist is another man's freedom-fighter) threatens to spread the Iraq contagion out of the country and ignite Kurdish separatists in Turkey, leading to a downward cycle of reprisals and human right abuses. Also, the persistent presence of the PKK nags the idea of Iraq as a sovereign entity, and makes the claims of the regime in Baghdad irrelevent outside its Shia sphere of influence.
American soft power will remain underutilized largely because the use of hard power and militarism over extended periods tends to crush any alternative solution to violence. Instead violence is simply piled atop previous violence, and simply produces more violence. Eventually it matters who fired the first shot, or the last, or who thinks they won. In the end there are only the people who get to go home.
Multilateralism: The Other Way
Declaring North Korean, Iran, and Iraq as the Axis of Evil as Bush did in January 2002 may have made a great sound byte in the War on Terror but it also drove those nations together. North Korean missiles were sent to Iran and Iranian technology may have accelerated North Korea's nuclear weapons development, culminating in the detonation of a device there last summer.
Bush was driven in his foreign policy decisions by an overarching desire to get re-elected. Foreign policy was made subordinate to domestic political priorities, which largely involved turning traditional enemies of the US and Israel into foes in the Global War on Terror. Whatreallyhappened's Mike Riviero once said that North Korea was only put in the Axis of Evil to make the case that GWOT wasn't only about Muslim nations. Judging by the apparent unwillingness of the US to deter or stop the North Koreans from going nuclear, Mike was right: North Korean is in their for PR-purposes, and Israel's enemies are the real target of the Global War on Terror.
Under the spell of Rove's fear-based manipulation of the electorate, Bush led our foreign policy in a direction away from reality. Neocons took over and militarism dominated. Foreign policy decisions went under the spell of neocon theorists and a five-time Vietnam draft deferree Vice President Dick Cheney, or Darth Vader as is he is sometimes known. Pushing the fear button worked well for the Republicans, who knew they had to win over suburban moms and NASCAR dads. The fear of terrorism won a second term, but our foreign policy had been sacrficed for short-term political advantage in the domestic arena.
As it turned out as our credibility shrank as the Iraqi insurgency accelerated in 2004. In an effort to root out the insurgents, Bush authorized harsh interrogation techniques, despite their apparent ineffectiveness and illegality. Rumsfeld transferred Guantanamo's superintendent, a Major General Miller, to oversee all of Iraq's prisons.
The gloves would come off. The propaganda war accelerated. Iraqi insurgents were labelled terrorists as if they'd been part of 9/11. Metrics to measure the effectiveness of hard power went back in vogue, with Vietnam-era terms like body counts reappearing in the military lexicon.
Hard power displaced whatever soft power we could have used. Negotiations were shunned. Other Arab nations were excluded from participating in the remediation efforts as our mission went from regime change to occupation. Meanwhile the insurgents resorted to guerilla tactics--countering hard power with their own in a downward spiral of tit-for-tat and sectarian killing.
Fast forward three years and we see the consequences of those mistakes. US credibility is greatly diminished and we couldn't get a coalition together to fight a Saddam Hussein, or intervene in a place where we could perhaps do some good--like Darfur or Burma. Using the military so exhaustively as the leading edge of our foreign policy, we are now little more than a paper tiger. We can barely sustain our military presence in Iraq, so any new adventures are implausible.
To make matters worse, we can't hide our military weakness. Absent a draft, we have nowhere near the force we would need to practice anything more than gunboat diplomacy. Using our hard power has depleted it, and our rivals can sense that limits on our use of military force have been reached. All empires face this moment, from the age of Alexander in Afghanistan to Napoleon and Hitler in the snows of Russia.
We retain tremendous hard power resources. We can lob some missiles at our enemies, but we can't do any real damage or implement regime change through force-of-arms. With no military card to play, Chavez, Ahmadinejad, and any anti-American leaders out there can say and do pretty much as they please. In hindsight, if we had utilized our soft power more effectively, our hard power could now be utilized more efficiently. Thus the Iraq adventure has shown that the exercise of hard power is most effective when used sparingly.
Bush and Cheney wanted to flout the US military power, so now we are left with a lot less of it by which we can cajole or exert influence. The end result is also that alliances have formed around Russia and China, who've taken our military weakness to mean that they can no longer be contained. The olive branch Putin extended after 9/11 has been retracted, due in part to Cheney's anti-Russian rhetoric, and the pushing of a missile shield in Eastern Europe, ostensibly to stop Middle Eastern rockets but not so coincidentally capable of stopping missiles from Russia as well. Could we be headed for a new arms race? See an article by Mike Whitney on Putin here.
If Chavez were to tie down considerable US military forces, Iran could be more or less immune from attack. The two nations have signed a mutual defense pact, continue to trade weapons, and could easily institute an oil embargo between them that could do havoc to oil-dependent economies or, if targetted toward the US, could eliminate access to Venezuelan crude while raising prices of the commmodity. Chavez has tried to sway OPEC towards taking political action through oil production cuts and/or price increases but has been stymied by the Bush-allied Saudi monarchy.
Like the case in Iran, military action against Chavez could backfire and strengthen anti-US resolve. Such is the price of using the military in wars-of-choice, open-ended and without conditions for victory. Victory has traditionally meant withdrawal but Bush has reminded us of our enduring presence in Korea and Germany, not so much as testimony to our victories there, but to flog us with the idea of nearly endless occupation over which we citizens, mere serfs, have no say. The power of Congress--the people's representatives--to ratify treaties under the Constitution can be subordinated, if treaties by another name--open-ended commitments and foreign entanglements--are made semi-permanent by the stroke of a President's pen.
War on the Dollar
No country can match the US' soft power: the ability of America to influence other nations by persuasion and cultural influence. Still, grouped together, transnational blocs can counterbalance the impact of US soft power. Nowhere is this clearer than with foreign governments' use of the dollar as their currency of choice in conducting international trade and banking.
Until very recently, international sales of oil were traded in London or New York markets only and denominated exclusively in US dollar or British pounds. Oil producers in the Gulf have been collecting petrodollars, occasionally spending them to buy military hardware from the US that they can't use, which gather sand in the desert. As a reserve currency, the dollar has been in higher demand than it otherwise would. If the petrodollars were to enter circulation in the US, they'd contribute to inflation and degrade their value.
Dozens of nations have sought to reduce their dollar holdings. The motive for the shift may be political or economic, considering how much the dollar has fallen against the English pound and euro. Whatever the reason, it's clear that the advantage that the US currency as the international reserve has had will be largely lost, if indeed a suitable replacement can be found. (It's also likely that political considerations will make the choice of a replacement for the dollar difficult, if not impossible.) The euro may be the best substitue at present, but it's unlikely that China, Japan and other big holders of dollars would liquidate holdings to buy it at the premium it now commands.
Linda Heard discussed a new alternative to dollar-denominated banking:
US influence is further being eroded in South America by Venezuelan-led plans for a new bank -- Banco del Sur -- that would eliminate the region's dependency on the World Bank and the International Monetary Fund; institutions that the Venezuelan President Hugo Chavez refers to as "tools of Washington".(Source)
The six other founder nations are Argentina, Bolivia, Brazil Ecuador, Paraguay and Uruguay, which may soon be joined by Chile, Colombia, Peru Guyana and Surinam.
If Latin American countries move out of their current holdings of US Treasury bonds -- estimated at around $500 billion -- the impact on the dollar could be enormous.
Bolivian President Evo Morales was recently interviewed on Democracy Now and brought up some of the issues important to Latin Americans. The interview is posted here.
Multilateralism may be a very effective tool to combine the soft power of many nations, and provide a credible alternative to a financial status quo revolving around the US dollar. In this regard, soft power exercised in the name of anti-Americanism could do far greater damage than any combined military alliance against us, which we could defeat or contain.
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posted by jbpeebles @ 3:54 AM
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