Prisoners of Geography

by Tim Marshall

  The Mexican border has always been a haven for smugglers, but never more so than in the last twenty years. This is a direct result of the US government’s policy in Colombia, 1,500 miles away to the south.

  It was President Nixon in the 1970s who first declared a ‘War on Drugs’, which, like a ‘War on Terror’, is a somewhat nebulous concept in which victory cannot be achieved. However it wasn’t until the early 1990s that Washington took the war directly to the Colombian drug cartels with overt assistance to the Colombian government. It also had success in closing down many of the air and sea drug routes from Colombia into the USA.

  The cartels responded by creating a land route – up through Central America and Mexico, and into the American Southwest. The route partially follows the Pan-American Highway, which runs south to north up the continent. Originally designed to move goods in each direction to a variety of countries, it is now also used to move drugs north to the USA. This in turn led the Mexican drug gangs to get in on the action by facilitating the routes and manufacturing their own produce. The multibillion-dollar business sparked local turf wars, with the winners using their new power and money to infiltrate and corrupt the Mexican police and military and get inside the political and business elites.

  In this there are parallels with the heroin trade in Afghanistan. Many of the Afghan farmers growing the poppy crop responded to NATO’s attempts to destroy their traditional way of making a living by either taking up arms or supporting the Taliban. It may be the government’s policy to wage a ‘War on Drugs’, but this does not mean that the orders are carried out at a regional level, which the Afghan drug lords have penetrated. So it is in Mexico.

  Throughout history, successive governments in Mexico City have never had a firm grip on the country. Now its opponents, the drug cartels, have paramilitary wings which are as well armed as the forces of the state, often better paid, more motivated, and in several regions are regarded as a source of employment by some members of the public. The vast sums of money made by the gangs now swill around the country, much of it being washed through what appear on the surface to be legitimate businesses.

  Mexico is now in the grip of what is almost a civil war. The cartels try to control territory through intimidation, the government tries to pretend it is in charge of the rule of law, and hundreds of civilians, caught in the middle, are being killed. Among the most horrific manifestations of this was the presumed murder of forty-three student teachers by a cartel in 2014, an act which traumatised the country and galvanised the authorities, but ultimately looks to be ‘just’ another terrible milestone in what will be a long struggle.

  The overland supply route is firmly established, and the demand in the USA shows few signs of diminishing. All Mexican governments try to keep on the right side of their powerful neighbour and have responded to American pressure by waging their own ‘War on Drugs’. Here lies a conundrum. Mexico makes its living by supplying consumer goods to America, and as long as Americans consume drugs, Mexicans will supply them – after all, the idea here is to make things which are cheap to produce and sell them at prices higher than those in legal trade. Without drugs the country would be even poorer than it is, as a vast amount of foreign money would be cut off. With drugs, it is even more violent than it would otherwise be. The same is true of some of the countries to Mexico’s south.

  Central America has little going for it by way of geography, but for one thing. It is thin. So far the only country to gain advantage from this has been Panama, but with the arrival of new money from China that may be about to change.

  Modern technology means the Chinese can see from a glance at a satellite photograph the trade opportunities this thin stretch of land might bring. In 1513 the Spanish explorer Vasco Núñez de Balboa had to sail across the Atlantic, land in what is now Panama, then trek through jungles and over mountains before seeing before him another vast ocean – the Pacific. The advantages of linking them were obvious, but it was another 401 years before technology caught up with geography. In 1914 the newly built, 50-mile-long, American-controlled Panama Canal opened, thus saving an 8,000-mile journey from the Atlantic to the Pacific oceans and leading to economic growth in the canal region.

  Central America could see many changes in the regions that are receiving Chinese investment, such as the development of the Nicaragua Grand Canal.

  Since 1999 the canal has been controlled by Panama, but is regarded as a neutral international waterway which is safeguarded by the US and Panama navies. And therein, for the Chinese, lies a problem.

  Panama and the USA are friends – in fact, such good friends that in 2014 Venezuela briefly cut ties with Panama, calling it a ‘US lackey’. The effect of the rhetoric of the increasingly embattled country’s Bolivarian revolutionary era is tempered by the knowledge that the United States is Venezuela’s most important commercial partner and that Venezuela supplies around 10 per cent of US oil imports. The energy trade between them is likely to fall as the effects of the US shale revolution kick in, but Beijing will be a willing importer of Venezuelan oil, and is working on how to get it to China without relying on the route through Panama.

  China, as we saw in Chapter Two, has designs on being a global power and to achieve this aim it will need to keep sea lanes open for its commerce and its navy. The Panama Canal may well be a neutral passageway, but at the end of the day passage through it is dependent on American goodwill. So, why not build your own canal up the road in Nicaragua? After all, what’s $50 billion to a growing superpower?

  The Nicaragua Grand Canal project is funded by a Hong Kong businessman named Wang Jing who has made a lot of money in telecommunications but has no experience of engineering, let alone masterminding one of the most ambitious construction projects in the history of the world. Mr Wang is adamant that the Chinese government is not involved in the project. Given the nature of China’s business culture and the participation of its government in all aspects of life, this is unusual.

  The $50 billion cost estimate for the project, which is due for completion in the early 2020s, is four times the size of the entire Nicaraguan economy and forms part of the substantial investment in Latin America by China, which is slowly but steadily supplanting the USA as the region’s main trading partner. Exactly who is financially backing Mr Wang is unclear, but Nicaragua’s President Daniel Ortega signed up to the plan with alacrity and with scarcely a glance at the 30,000-plus people who may be required to move from their lands because of the project.

  The former revolutionary socialist Sandinista firebrand now finds himself accused of being on the side of big business. The canal will split the country in two, and six municipalities will find themselves divided. There will only be one bridge across the canal along its entire length. Ortega must know he risks sowing the seeds of dissent, but argues that the project will bring tens of thousands of jobs and much-needed investment and revenue to the second-poorest country in the Western Hemisphere. At the start of 2016, the project was not going well. Mr Wang lost an estimated 85 per cent of his fortune in the Chinese stock market crash of September 2015. Most construction work was delayed, but all sides insisted the project would succeed.

  If that is so, then the Nicaraguan canal will be longer than the Panama and, crucially, will be significantly wider and deeper, thus allowing much bigger tankers and container ships through, not to mention large Chinese naval vessels. It will run directly east to west, whereas the Panama Canal actually runs north to south. The middle section will be dredged out of Lake Nicaragua, which has led environmentalists to warn that Latin America’s largest freshwater lake may become contaminated.

  Given that the Panama Canal a few hundred miles to the south is being widened, sceptics ask why the Nicaraguan version is necessary. China will have control of a canal able to take bigger ships, which will help to guarantee the economies of scale only China is capable of. There are questions about the future profitability of the Nicaraguan canal – it may take decades to make money – but
this is a project that appears to be more about the national interests of China than about commercial profit.

  Gouging a link between two oceans out of a nation state is just the most visible sign of China’s investment in Latin America. We’ve grown used to seeing the Chinese as major players in Africa, but for twenty years now they have been quietly moving in south of the Rio Grande.

  As well as investing in construction projects, China is lending huge sums of money to Latin American governments, notably those in Argentina, Venezuela and Ecuador. In return China will be expecting support in the United Nations for its regional claims back home, including the issue of Taiwan.

  Beijing is also buying. The Latin American states have been picked off one by one by the USA, which prefers bilateral trade deals to doing business with the region as a whole, as they have to do with the EU. The Chinese are doing the same thing but at least offer an alternative, thus reducing the region’s dependency on the USA as its market. For example, China has now replaced the USA as Brazil’s main trading partner, and may do the same with several other Latin American countries.

  The Latin American countries do not have a natural affinity with the USA. Relations are dominated by America’s starting position, laid out in the Monroe Doctrine of 1823 (as we have seen in Chapter Three) during President Monroe’s State of the Union address. The Doctrine warned off the European colonialists and said, in as many words, that Latin America was the USA’s backyard and sphere of influence. It has been orchestrating events there ever since and many Latin Americans believe the end results have not always been positive.

  Eight decades after Monroe’s Doctrine, along came another president with ‘Monroe reloaded’. In a speech in 1904 Theodore ‘Teddy’ Roosevelt said: ‘In the Western Hemisphere the adherence of the United States to the Monroe Doctrine may force the United States, however reluctantly, in flagrant cases of [such] wrongdoing or impotence, to the exercise of an international police power.’ In other words, the USA could militarily intervene whenever it chose to in the Western Hemisphere. Not including the funding of revolutions, the arming of groups and the provision of military trainers, the USA used force in Latin America almost fifty times between 1890 and the end of the Cold War.

  After that, overt interference dropped off rapidly and in 2001 the USA was a signatory to the thirty-four-nation Inter-American Democratic Charter drafted by the Organization of American States, which proclaims that ‘The peoples of the Americas have a right to democracy and their governments have an obligation to promote and defend it.’ Since then the USA has concentrated on binding the Latin American countries to itself economically by building up existing trade pacts like the North American Free Trade Association, and introducing others such as the Central American Free Trade Agreement.

  The lack of warmth thus engendered in south/north historic and economic relationships meant that when the Chinese came knocking, doors quickly opened. Beijing now sells or donates arms to Uruguay, Colombia, Chile, Mexico and Peru, and offers them military exchanges. It is trying to build a military relationship with Venezuela, which it hopes will outlast the Bolivarian revolution if and when it collapses. The arms supplies to Latin America are relatively small-scale but complement China’s efforts at soft power. Its sole hospital ship, Peace Ark, visited the region in 2011. It is only a 300-bed vessel, dwarfed by the American 1,000-bed versions which also visit, but it was a signal of intent and a reminder that China increasingly ‘gets’ soft power.

  However, with or without Chinese trade, the countries of Latin America are inescapably locked into a geographical region ? which means that the USA will always be a major player.

  Brazil, which makes up fully one-third of the land of South America, is the best example. It is almost as big as the USA, and its twenty-seven federal states equal an area bigger than the twenty-eight EU countries combined; but unlike them it lacks the infrastructure to be as rich. A third of Brazil is jungle, where it is painfully expensive, and in some areas illegal, to carve out land fit for modern human habitation. The destruction of the Amazon Rainforest is a long-term ecological problem for the whole world, but it is also a medium-term problem for Brazil: the government allows slash-and-burn farmers to cut down the jungle and then use the land for agriculture. But the soil is so poor that within a few years crop-growing is untenable. The farmers move on to cut down more rainforest, and once the rainforest is cut it does not grow back. The climate and soil work against the development of agriculture.

  The River Amazon may be navigable, but its banks are muddy and the surrounding land makes it difficult to build on. This problem, too, seriously limits the amount of profitable land available. Just below the Amazon region, in the highlands, is the savannah and, by contrast, it is a success story. Twenty-five years ago this area was considered unfit for agriculture, but Brazilian technology has turned it into one of the world’s largest producer of soybeans, which – together with the growth in grain production – means the country is becoming a major agricultural producer.

  To the south of the savannah are the traditional Brazilian agricultural lands. We are now in the Southern Cone of South America, which Brazil shares with Argentina, Uruguay and Chile. The relatively small Brazilian section is where the first Portuguese colonialists lived, and it was to be 300 years before the population could push out from this heartland and significantly populate the rest of the country. To this day most people still live close to the coastal areas, despite the dramatic decision made in the late 1950s to move the capital (previously Rio de Janeiro) several hundred miles inland to the purpose-built city of Brasilia in an attempt to develop the heart of Brazil.

  The southern agricultural heartland is about the size of Spain, Portugal and Italy combined and is much flatter than the rest of the country. It is relatively well watered, but most of it is in the interior of the region and lacks properly developed transport routes.

  The same is true of most of Brazil. If you look at many of the Brazilian coastal cities from the sea there is usually a massive cliff rising dramatically out of the water either side of the urban area, or directly behind it. Known as the Grand Escarpment, it dominates much of Brazil’s coast; it is the end of the plateau called the Brazilian Shield which makes up most of Brazil’s interior.

  Because the country lacks a coastal plain, to connect its major coastal cities you need to build routes up and over the escarpment, along to the next urban area and then back down. The lack of decent modern roads is compounded by a similar deficiency of rail track. This is not a recipe for profitable trading or for unifying a large space politically.

  It gets worse. Brazil does not have direct access to the rivers of the Rio de la Plata region. The River Plate itself empties out into the Atlantic in Argentina, meaning that for centuries traders have moved their goods down the Plate to Buenos Aires rather than carry them up and down the Grand Escarpment to get to Brazil’s underdeveloped ports. The Texas-based geopolitical intelligence company Stratfor.com estimates that Brazil’s seven largest ports combined can handle fewer goods per year than the single American port of New Orleans.

  Therefore Brazil lacks the volume of trade it would like and, equally importantly, most of its goods are moved along its inadequate roads rather than by river, thus increasing costs. On the plus side Brazil is working on its transport infrastructure, and the newly discovered offshore gas reserves will help pay for this, reduce reliance on Bolivian and Venezuelan energy imports and cushion the inevitable economic dips all nations suffer. Nevertheless, Brazil will require a Herculean effort for it to overcome its geographical disadvantages.

  Around 25 per cent of Brazilians are thought to live in the infamous favela slums. When one in four of a state’s population is in abject poverty it is difficult for that state to become rich. This does not mean Brazil is not a rising power, just that its rise will be limited.

  A shortcut to growth could be soft power, hence Brazil’s efforts to gain a permanent seat on the UN Security Council and its
habit of building regional economic alliances such as Mercosur, which loosely ties together Brazil, Argentina, Paraguay, Uruguay and Venezuela. Every few years, often led by Brazil, the South Americans attempt to launch their version of the EU – the latest incarnation being UNASUR, of which twelve South American nations are members. Its headquarters is in Ecuador but Brazil has the loudest voice. In this it resembles the EU, which has an HQ in Belgium and a leading power in Germany. And there the comparison stops. UNASUR has an impressive presence on the internet but it remains more of a website than an economic union. The EU countries have similar political and economic systems and most members share a currency, whereas the Latin Americans differ in their politics, economics, currencies, education levels and labour laws. They also have to overcome the constraints of distance, as well as the heights of the mountains and the density of the jungles which separate them.

  But Brazil will keep working to help create a South American powerhouse using its diplomatic and increasing economic strength. The country is by nature non-confrontational, its foreign policy is against intervention in other countries, and war with any of its neighbours seems highly unlikely. It has managed to maintain good relations with all the other eleven South American nations despite having a border with nine of them.

  There is a frontier dispute with Uruguay, but it does not look set to become inflamed; and the rivalry between Brazil and Argentina is unlikely to be played out anywhere more politically significant than a football pitch. In recent years Brazil has moved army units away from its border with Argentina and has seen its Spanish-speaking neighbour reciprocate. An Argentinian navy vessel has been welcomed in a Brazilian port whereas a British Royal Navy ship was denied such access a few years ago, thus pleasing the Argentinians in their ongoing diplomatic battle with the UK over the Falkland Islands.