Theme: South America, like the whole of Latin America, has traditionally been considered to be a region of peace. However, in the last few months two potential flashpoints have emerged in the Andean region: Bolivia and Colombia.

Summary: The escalating verbal and diplomatic tensions from the governments of Ecuador and Venezuela, accompanied by the deployment of troops to their borders with Colombia, have made evident the existence of a clear risk of military conflict, with regional repercussions, in South America. Traditionally, the region had been considered one of relative peace and stability, and there had been promising, although not problem-free, sub-regional integration processes, such as the Andean Community of Nations (CAN) and Mercosur. However, in the last three or four years things have begun to change radically and today there are two potential flashpoints in the region. The first is Bolivia, which is located at the heart of the Andean region. It is a country that is rich in gas but dogged with political, regional and ethnic disputes which threaten, sometimes more openly than others, to trigger internal clashes. Should that be the case, if the violence finds a place to express itself clearly –and there are factions on both sides that are particularly interested in achieving just that–, the risk that it will spiral into an international conflict is high. The presence of Venezuelan military personnel in Bolivia and the remarks by President Chávez clearly backing his colleague Evo Morales and threatening to turn Bolivia into a new Vietnam are evidence of the risks.

The other scenario is Colombia. President Uribe’s decision to remove Hugo Chávez from his role as mediator in the humanitarian exchange process with the FARC to secure the release of hostages sent regional tensions sky-rocketing. Chávez’s statements against Colombia and Uribe have been unrelenting, and the action by the Colombian armed and security forces against Raúl Reyes unleashed a surge of rhetoric, this time accompanied by the deployment of troops. Chávez’s line found its echo in the President of Nicaragua, Daniel Ortega, and, following these events, in Rafael Correa, President of Ecuador, who until then had opted to keep a low profile. This ARI is the first of a trilogy in which we will provide an overview of the general situation in the region and then, in the two remaining instalments in the series, take a more in-depth look at the cases of Bolivia and Colombia.

Analysis: Latin America, and the same applies to South America, has been a region of peace. If we look at how conflicts evolved in the 19th and 20th centuries and we compare this to the situation in Europe, Asia and Africa, the conclusion is evident: there have been very few wars in the region. It is true that there have been some wars, and that some, like that of the Triple Alliance (1865-1870), were particularly bloody, but in no case were they comparable to the devastating conflicts which razed huge areas of the planet and which decimated entire populations. Among the main conflicts in the last few decades was the one which verged on open war between Argentina and Chile, averted at the last minute (1978) through the Pope’s intervention, and an armed clash between Peru and Ecuador in 1995, which had its prologue in 1941. There has been little more to speak of, although throughout this time there have been constant bilateral disputes and friction, which still respond to the old logic of confrontation regarding the charting of common borders.

Things are different now. For the first time in years, there is a possibility (which does not imply the inevitability) that armed conflict could erupt in the region, as shown by the deployment of troops by Ecuador and Venezuela to their borders with Colombia. There are two approaches to this situation. The first is denial: saying that a conflict is impossible. The second is to try to analyse the most strife-ridden situations and reach the conclusion that an escalation of rhetoric and of certain gestures could end up turning into something more serious. It is true that of the different elements involved, and we will have the opportunity to assess them, many more work in favour of peace and stability, but it is also true that there is no limit to irresponsibility and when situations are so delicate there is always someone willing to light a fuse without thinking of the consequences.

The series of three ARIs which begin with this Introduction will focus on two very specific cases in the reality of South America: (1) the possibility that the outbreak of civil clashes in Bolivia might turn into an all-out regional conflict involving another or several other South American countries; and (2) the conflict between Venezuela and Colombia, which is gaining momentum and which has led a number of experts to consider the possibility of a war between the two countries, also with regional implications, as made evident by the attitudes of the governments of Ecuador and Nicaragua, which are increasingly aligned with Venezuela.

The process of integration in Latin America, and especially in South America, is in crisis. Any other term would be a pure euphemism and would only serve to conceal the gravity of the situation. At the same time, it is also true that we are not witnessing a process of accelerated fragmentation in the region, although recent events might tend to question this assertion. The broad lines of this process of escalating tension could be defined based on the following pivotal axes, which will be tackled in this analysis: (1) lack of definition in the South American integration process, accompanied by turbulence within the existing sub-regional integration systems; (2) an increase in bilateral conflict, compounded by the fact that neither political-ideological convergence nor energy nor finances have become the drivers of regional integration; and (3) the emergence of flashpoints (Bolivia and Colombia/Venezuela).

Sub-regional Integration
Confusion prevails in the South American integration process. At the South American Energy Summit held in mid-April 2007 on the Venezuelan island of Margarita (see Carlos Malamud, ‘The South American Energy Summit and Regional Integration: a Path Paved with Good (and not so Good) Intentions’, Working Paper nr 18/2007, Elcano Royal Institute), out of the blue, President Hugo Chávez’s proposal to create the Union of South American Nations (Unasur – Unión de Naciones del Sur), to replace the South American Community of Nations (SACN), was approved. For now, no-one knows how the process will continue and whether it will lead, based on the convergence between the CAN and Mercosur or of its own accord, to a path of its own which has yet to be fully traced. Neither Brazil nor Venezuela have clear responses to these questions, although they are the main drivers, each with their own distinct project, of regional integration.

Both the CAN and Mercosur are experiencing difficulties, which were compounded by Venezuela’s exit from the former and its entry into the latter (see Carlos Malamud, ‘Venezuela’s Withdrawal from the Andean Community of Nations and the Consequences for Regional Integration’, Working Paper nr 28/2006, Elcano Royal Institute, and, by the same author, available only in Spanish, ‘El Mercosur y Venezuela: la Cumbre de Asunción y el impacto de una possible ruptura venezolana’, ARI nr 78/2007, Elcano Royal Institute). This does not mean that Venezuela is the only cause of the crisis we are witnessing, but it is an important factor to take into account in the complex situation which the sub-regional integration processes are experiencing. To make matters worse, the strong nationalism in the region prevents countries from relinquishing enough sovereignty to actually make headway in regional integration. In the Andean Community of Nations, the difficulties first emerged clearly after progress was made in the negotiations by Colombia and Peru and the US in regard to their respective Free Trade Agreements (FTAs) and Venezuela’s rejection of this commercial opening. More recently, Bolivia’s proposal to negotiate with the EU at two or more speeds has again evidenced how impossible it is for the CAN to speak with a single voice.

In Mercosur, we are seeing several simultaneous contradictions. First is the quarrelling between small countries (Paraguay and Uruguay) and large ones (Argentina and Brazil), which have still not managed to implement the necessary cohesion mechanisms which would allow them to overcome their current differences and grievances. And secondly is the freeze on Venezuela’s integration into the block: the Parliaments of Brazil and Paraguay have not yet passed judgement in this regard, and above and beyond the upbeat remarks by Presidents Lula and Kirchner, some questions linger, such as: ‘What does Mercosur stand to gain and lose with the entry of Venezuela?’. The presidential election in Paraguay should dissipate at least some of the lingering doubts. At the same time, the crisis between Argentina and Uruguay due to the construction of a paper pulp plant in the Uruguayan town of Fray Bentos made evident the absence of mechanisms for resolving disputes between member countries and also the limitations of the Brazilian leadership, which opted directly not to get involved in the conflict.

A reflection of the situation is the suspension of negotiations for the two sub-regional integration processes between South America and the EU. This cannot be seen as a direct consequence of the above, but it is a good indication of the turbulence in the region. The Bolivian proposal in regard to when to negotiate the treaty of association with the EU considering its specific stance, in other words, its systematic rejection of free trade, was backed by Ecuador. This Bolivian proposal was not categorically rejected by the EU, amid fears among senior officials in Brussels that such a move might further aggravate the already-unstable situation which Bolivia is currently experiencing. The deadlock led to an unprecedented situation for some EU institutions. For the first time, some European politicians began to seriously consider the possibility of negotiating bilateral treaties, abandoning the traditional requirement that they would only negotiate with sub-regional integration blocks, if after next autumn the same deadlock continues.

Bilateral Conflicts and Failures by the ‘Drivers’ of Integration
Despite all of the integrationist rhetoric, which is much more insistent and emphatic now than it has ever been before, there are a number of bilateral conflicts which, as in the past, respond to cross-border dialectic, but which also, unlike previously, have a marked political and economic bias (see Carlos Malamud, ‘The Increase in Bilateral Conflicts in Latin America: Its Consequences In and Outside the Region’, ARI nr 61/2005, Elcano Royal Institute; and Carlos Malamud and Carlota García Encina, ‘Outside Players in Latin America: Iran’, ARI nr 124/2007, Elcano Royal Institute).

At the same time, we are seeing how neither political nor ideological convergence (the so-called shift to the left), nor energy nor finances have managed to become the drivers of regional integration, despite the huge expectations they generated. There is ample evidence of the failures, but among the foremost are the incomprehensible and ridiculous dispute between Argentina and Uruguay (two theoretically left-wing governments) and the dispute between Bolivia and Brazil, now being steered towards a solution, due to the nationalisation of Bolivian hydrocarbons and the crusade by the government of Evo Morales, in combination with the Bolivarian Republic of Venezuela and Petróleos de Venezuela, S.A., against Petrobras.

Energy and the major projects linked to its development have had no better luck. Neither the Energy Ring pushed by Peru nor the Great Gas Pipeline of the South, the Pharaoh-scale project devised by Venezuela, have gone beyond the idea stage. And who now remembers the Gas Producers’ Association Oppegasur (Organización de Países Productores y Exportadores de Gas de América del Sur), another great integrationist project that was pushed by Venezuela? Lastly, there is the permanent directionless drifting of the Bank of the South, which (apart from the periodical meetings at various levels to try and re-float it and the dates set time and time again for its launch) evidences the huge difficulties in the region to shake off the current stagnation.

A lack of definition and of real action, in this and in other matters, are the norm, hence the major announcements of prodigious measures, which then lead to nothing and end up being the source of further frustration. In Cochabamba, the Bolivian government is pushing for the construction of the South American Parliamentary Headquarters, an institution which, like so many others in the regional integration project, will be born devoid of content. However, this does not mean that substantial amounts of money will not be spent on its construction, and that other important sums will not be consumed by the salaries of parliamentarians, consultants and support personnel. The same can be said of the Mercosur Parliament. In April 2007, Evo Morales, following Rafael Correa’s lead, revealed that in the region there was a consensus to create a single currency, although he did not clarify which countries shared this consensus or how the currency would be introduced. In Morales’s vision, a single currency is pivotal in the path to regional integration, and not a consequence thereof. That is why the house is being built from the roof downwards and in this case the central theme is the new currency’s name. ‘That is the task, which is the result of much debate; we have even come up with a name, let’s call it Pacha, looking a bit to the future. Venezuela also has a proposal (for the name). All the countries have a proposal, but there is agreement that all of South America should have a common currency. There is agreement on that’.

Recently, both Brazil and Venezuela have tried to make defence policy another driver of regional integration. First it was Hugo Chávez who proposed the creation of a Southern NATO and, more recently, during a meeting in Buenos Aires between Presidents Lula and Cristina Kirchner, the Brazilian Defence Minister unveiled plans outlining the design of joint military policies, not only between the two countries, but also in South America as a whole. Here, as in so many other points, what Lula and Chávez see as regional defence policies are clearly quite different, and, in some aspects, even contradictory.

There is an underlying dispute, which occasionally surfaces, for regional leadership between Venezuela and Brazil, however much the political leaders of both countries insist on denying it. It is true that both Brazil and Venezuela have their own national, regional and international agendas and that they understand leadership in different ways, but the conflict is increasingly out in the open. For Venezuela, oil prices have become a vital component for its survival, which explains many of its recent attitudes, while Brazil is seeking to secure a foothold as an international power. However, the only country which at this time can exercise any moderating influence in the region, for example by trying to avert a fully-fledged conflict between Venezuela and Colombia, is Brazil.

Potential Flashpoints
For the first time in decades, South America is home to two potential war zones, with major regional ramifications: Bolivia and Venezuela/Colombia. In Bolivia, the clashes between the eastern departments, where the country’s main production resources are located, including its energy resources and some mineral deposits (like the El Mutún iron ore deposit), could generate escalating tensions which could even trigger a civil conflict. The background to all this, while not the only explanation, is the national and regional control of energy factors, especially gas, which plays a decisive role. However, there are other political and ethnic factors which also impact decisively on the agenda. Whereas Bolivian society and political forces have always been characterised by their desire for dialogue, the tension between government and opposition forces has mounted in the last few months. After attempts at rapprochement in recent weeks, talks have stalled and the tension is rising again. In these circumstances, the irresponsibility of one side or another, or a simple mistake, could spark a fire which would be very difficult to extinguish and which, as indicated, could even lead to a regional conflict.

The blatant interference of Commander Chávez in the fights against terrorists and drug traffickers spearheaded by the Colombian government has raised tensions in the Andean area, to the point where not a few analysts and observers wonder just how far the rising tide will go. These questions increased in the wake of the military deployment ordered by Chávez. Not only that, but Daniel Ortega’s Nicaraguan government has clearly aligned itself with Chávez and the FARC against Álvaro Uribe’s government. Rafael Correa’s government (which had tense relations with Colombia because of the spraying with glyphosate of coca plantations in Putumayo, near the border between the two countries) had kept a lower political profile, following the operation that targeted Raúl Reyes, and for reasons that are still not clear, he toughened his message and aligned himself unequivocally with Commander Chávez, increasing the risks of a regional conflict.

Venezuelan foreign policy, namely petrodiplomacy plus ALBA (Alternativa Bolivariana para las Américas – Bolivarian Alternative for the Americas), is an element which, beyond the rhetoric, tends to fragment and divide more than to unite the region. This is exemplified by Iran’s entrance on the Latin American stage in Venezuela’s tow, which has caused resentment in most Latin American governments. The same is true of its re-arming. At the same time, the blatant interference in the affairs of other countries, and the financing of ‘Bolivarian’ options and groups is another important factor.

Conclusions: In the last month, the chances of a conflict both in Bolivia and between Venezuela and Colombia have increased notably. This does not mean that we are on the verge of war, but neither should this be ruled out entirely. The irresponsibility of some leaders, or an error of judgement, could override the efforts of containment by many of the players in the region. There is no doubt that Brazil can play a balancing role, and accordingly it would be advisable if its senior officials, starting with President Lula himself, clearly assume the responsibilities which the country’s regional leadership require of them. No-one, and much less Brazil, wants to see a war break out in the heart of South America.

A common factor in both scenarios is Venezuela, whose government has chosen an increasingly aggressive regional policy, a far cry from the more moderate conduct and methods traditionally used by Latin American politicians and diplomats. This adds to the tension, tends to divide the region more than to unite it, and responds solely to the Venezuelan government’s own interests. It will be interesting to see how, in the process which is now unfolding, the various governments in the region position themselves. There will be some highly significant words or silences, like those of the new Cuban leader, Raúl Castro. And the President of Argentina, who will be visiting Caracas on occasion of the Rio Group Summit in Santo Domingo, has already expressed her backing for Chávez. Against this backdrop, it is obvious that there is a very large question market hovering over the future of regional integration in South America.

Carlos Malamud
Senior Analyst for Latin America, Elcano Royal Institute