In the analyzes of the War in Ukraine, the levels tend to be confused. We tend to be confronted with emotional reactions, diffused by the media and amplified by the networks; with propaganda disguised as rigorous news and opinions, which are less widespread.
At the same time, we are subjected to constant updates on the conflict zone, combined with more global visions, although also more blurred. We know there is censorship. But all this amalgamation we call information and it is on this basis that we build our criteria and make decisions.
It would be convenient, however, to clarify why Russia and Ukraine are not Yemen, Iraq or Afghanistan. Nor are they the Caucasus or the former Yugoslavia.
In fact, the structural impact of a hybrid confrontation that spills over from Eastern Europe and increasingly transcends the military sphere will be global and this will have more significant consequences, but also more distant and more lasting than one might think and publish.
Latin America has traditionally been exposed to the ups and downs of the world-system as its relationship with the global economy is dependent, its main role being that of a commodity exporter. Furthermore, the weaknesses of our financial systems expose our currencies to ups and downs that, like the current inflationary spirals, segment our economies and condition the lives of the most vulnerable.
The conjuncture, on the other hand, does not help either. Before all hell broke loose in Ukraine, the situation in this part of the world was already worrying: the impact of the pandemic had been devastating. The slowdown seemed a fait accompli, at the same time that inequality had run rampant again.
By 2021, extreme poverty had grown by nearly 14% across the region. Until a few months ago, Latin America seemed doomed to suffer trade changes (a consequence of changes in international demand) with the potential to provoke turmoil such as those experienced in recent times in Paraguay or Colombia.
The war in Ukraine, however, is changing everything. Even before Russia made public its response to Western sanctions, international prices for commodities such as oil, gas, steel, nickel, uranium, methanol, phosphates and wheat soared.
Globally, there have already been consequences: from sudden increases in energy bills to uncontrolled price increases or huge losses for several companies. According to experts, if the situation does not improve, there could be supply problems for the production of such basic goods as microchips (and therefore technological devices), plastics and even food.
And what are the implications of this whole situation for Latin America?
In the short term and at the micro level, there will already be widespread increases in inflation. But looking at the long term and at the macro level, in less than a month, our region rose again geopolitically. The rapid and eloquent approach of the United States to Venezuela is an example.
But Maduro’s oil (which is not the only one: Mexico also has large reserves) is just one of our great strategic assets in the face of the scarcity of raw materials in sight for the West.
Trinidad and Tobago and Guyana have gas deposits; Colombia and Guatemala, nickel; Bolivia, lithium; Chile, copper; Brazil, in addition to producing biofuels, is, like Peru and the entire Andean arch, a mining power. Venezuela has phosphates and, to conclude, Argentina produces wheat…
All these attributes in the form of raw materials are allowing us to suddenly recover, especially in the eyes of the United States and its allies, a strategic interest that Asia has maintained for the last twenty years.
This region, in the heat of economic growth supported not only by the strength of the Chinese economy, but also by a consistent network of its own multilateral organizations (such as the Shanghai Cooperation Organization, which represents a third of the world’s GDP, the Continental Free Trade Area Africana, the Asian Infrastructure Investment Bank and China’s Belt and Road initiative), was being turned into a locomotive of the global economy and a magnet for foreign investment.
But, paradoxically, the geopolitical pressure that Russia is now subjected to as a result of the Ukrainian War may contribute to strengthening an economic bloc that has at its core a solid (and recently relaunched) strategic alliance between Moscow and Beijing.
The best proof of its geopolitical importance is that virtually no Asian country, including India, Pakistan or the United Arab Emirates, will apply sanctions against Moscow.
Furthermore, these are not institutions disconnected from reality: little by little, they have been developing concrete financial instruments, such as UnionPay, CIPS, or the digital Yuan, which allow citizens and traders to get around the day to day and, therefore, the feasibility of large-scale geopolitical insubordination that could benefit Beijing, laying the groundwork for a progressive “de-dollarization” of the world economy.
In Latin America, however, although most of our countries do not impose sanctions on Moscow either, the geopolitical landscape is different. The key is that here there are no multilateral institutions with sufficient political strength, nor a capacity to export manufactured goods comparable to, for example, Southeast Asia, nor, of course, any financial tools of their own.
In addition, our economies are highly dollarized and, due to geographic remoteness, it is foreseeable that it will not even be possible to fulfill the wish of some not to block Russia.
On the contrary, everything points to immediate problems with certain supplies (especially fertilizers, which are essential for agricultural production), to a probable stagflation and to renewed geopolitical pressures that are very likely to take shape at the Summit of the Americas to be held in June, In Los Angeles.
In this framework, neither political stability nor social equity is guaranteed. At the same time, Chinese interests in the region could become an object of pressure.
In fact, although Beijing’s presence in Latin America is not as decisive as in Africa, strategically speaking there are elements that could be worrying from a Western perspective, such as the Chinese construction of critical infrastructure in the Caribbean area or the intense agricultural relations established in from the soy trade in the Southern Cone.
Looking ahead, it could also be worrying how receptive our region could become to the establishment of trade compensation systems such as those promoted by Beijing. In this matter, it remains to be seen how far western pressure could reach, although it is appropriate to interpret the possible “association” of Colombia with NATO as a warning to navigators.
Another possible vector of external pressure could be the environmental one. In recent days, the heat of the War in Ukraine has prevented us from fully appreciating the seriousness of a recent United Nations report that warns, for the umpteenth time, of the irreversible ecological degradation suffered by the Amazon and of the serious climate risks that our region faces.
With Antarctica, environmentally fragile and geopolitically sensitive for the countries of the Southern Cone, something similar occurs: the international treaty that protects the area against irresponsible incursions will expire in 2048, and at this moment several actors are taking positions with the possible exploitation of resources as a backdrop. background.
In the end, the underlying geopolitical problem remains substantially unchanged, even in the strategic context that appears to be ushering in the Ukraine War. There continues to be an international boom in commodities that the hybridity of conflict, insofar as it politically fragments the global space, complicates but does not change. For Latin America, this should be considered the real common strategic problem: will this end up being the case?
Spanish translation by Giulia Gaspar
