Intense Dispute in the Heart of the Southern Cone

Source: IRC Americas

In late September and early October, some major moves on the regional chess board shook up the political situation in Paraguay, Bolivia, and Uruguay. The moves confirmed that Washington is not the only player in South America, and must accept multilateralism as an established reality in the region.

On September 28, Uruguay decided not to sign a free trade agreement with the United States, a possibility that had been discussed since the beginning of the year. Paraguay informed Washington on October 2 that it would not renew diplomatic immunity for its troops, a decision that was made in August. And on October 5, a "war" broke out between union mine workers and cooperative members from Huanuni (Bolivia), causing 21 deaths amid rumors of an imminent coup d’etat in La Paz.

These events are, without doubt, an indication that something powerful is happening in the heart of the Southern Cone. At the same time, the events are all reversible: Uruguay could begin moving, at a slower pace, toward signing a broad trade agreement with the United States; Paraguay could turn around and restore immunity for American troops; and Evo Morales, who has managed to navigate one of the most difficult moments of his presidency, could still wind up in a stalemate with right-wing forces.

These events, and others, led Noam Chomsky to conclude, "The mechanisms of imperial control … are losing their effectiveness," because " in the Southern Cone especially, from Venezuela to Argentina, the region is rising to overthrow the legacy of external domination of the past centuries and the cruel and destructive social forms that they have helped to establish."1

The recession of the empire and the limits being encountered in the region are due to the rise of the social movements and progressive governments. In the disputes developing in Paraguay and Bolivia—which appear to be the most contentious—but also those in Uruguay and Ecuador, the course of action Brazil takes, and to a lesser extent Argentina and Venezuela, will be crucial.

The Fierce Fight for Hegemony

The existing climate in the region is much tenser than it appears. During the first week of October, the VII Conference of Defense Ministers of the Americas was held in Managua. Attending were Donald Rumsfeld, the leader of the Pentagon, and General Bantz Craddock, the leader of U.S. Southern Command. General Craddock attacked Venezuela for its role in "destabilizing" the region, while Rumsfeld warned of the danger of allowing Nicaraguan SAM-7 missiles to fall into the hands of Sandinistas, should Daniel Ortega win the presidential elections in November.

At the same time, Argentina carried out regional military exercises under " Operación Hermandad" (Operation Brotherhood) in which Brazil, Bolivia, Paraguay, Uruguay, and Venezuela (in other words, Mercosur plus Bolivia) also participated. On previous occasions, military actions have tended to focus on recovering areas occupied by guerrillas or intervening jointly in a country that had been destabilized by internal crisis. This occasion represented a significant departure from the usual strategy—the purpose was "to recover an airport (in the Argentine city of Posadas) that has fallen under the control of an extra-continental power, being used to fly in and deploy troops into the area."2

An analyst from the New Majority Institute points out, "The only country with the military capacity to carry out operations of this sort is the United States." He concludes that a change has taken place in the region’s military doctrine through the incorporation of the concept of "asymmetric war," to "resist aggression by an extra-continental power with much greater military might."

The other fact to keep in mind is the role of Brazil and Argentina in this change of course. When Uruguay was on the verge of making a decision concerning the free trade agreement, the foreign ministries of Brasilia and Buenos Aires "fine tuned with great secrecy the details of what would be a harsh and definitive response to Tabaré Vázquez’s early September letter requesting that member countries of Mercosur allow a degree of flexibility in negotiating" with the United States.3 The information, released after Uruguay decided against pursuing the free trade agreement, indicates that Brazil and Argentina "rejected flat out any possibility of allowing Uruguay to remain in Mercosur if it signed an individual free trade agreement with the United States."

All indications are that similar pressure was brought to bear on Paraguay. But there the situation is much more complex. Ever since Paraguay granted American troops diplomatic immunity in May of 2005, Mercosur countries—above all Brazil, but also Argentina and Venezuela—have taken important steps to prevent Paraguay from becoming a firm ally of the United States. In general terms, the points of leverage used to accomplish this are the resources generated by the Itaipú dam (through Brazil’s purchase of energy from Paraguay) and Yacyretá dam (where Argentina maintained some flexibility on Paraguay’s $11 billion debt, trading it for energy); trade cooperation and the support of Mercosur’s powerful countries in creating a compensation fund that benefits Paraguay and Uruguay; and also the possibility of trade and joint investments with Venezuela and Bolivia.

The United States, for its part, moved its pieces as well, but with a certain degree of clumsiness. While Asunción only recently made public its decision not to renew immunity for American troops, "the former foreign minister, Leila Rachid, officially informed Washington last August that starting in 2007, Paraguay would not sign an agreement offering immunity."4

The United States immediately began applying pressure by pointing to a military agreement between Venezuela and Bolivia to construct headquarters in unprotected border areas. Drugs and contraband move freely through these areas, and Washington insists Paraguay will be threatened by Venezuela, by way of Bolivia. The agreement, signed on May 26, seeks to address Bolivia’s need to protect its 7,000 kilometers of sparsely populated border area facing a "peaceful invasion" by neighboring countries and the looting of its natural resources.

The region’s conservative press echoed the "argument" of the Bush administration. On September 13, both editorial sections of the Paraguayan-based publications La Naciónand ABCattacked Evo Morales and Hugo Chavez. According to La Nación, in an editorial titled "No American Conspiracy," "Any rearmament by Bolivia will have repercussions for Paraguay, and it must take the corresponding action—a Paraguayan rearmament." At the same time, it called for the government to "seek strong alliances" and ended by affirming that the "guarantee for peace is to be prepared for war."5ABC, for its part, accused the "Venezuelan dictator" of sending weapons to Bolivia, denied the existence of a military base in Mariscal Estigarribia, and insisted that "Paraguay does not represent a military threat to any country."6

But it was El Mercurio from Chile that focused most intensely on the supposed military deployment by Venezuela in Bolivia. In its Sunday October 8 edition, it assures that 24 military bases will be constructed in Bolivia with the support of Venezuela, which would certainly arouse the suspicions of Chile, Paraguay, and Peru. According to the article, "this is just another move in the complex chess game in which, according to intelligence circles, Morales is not playing alone. Behind the scenes is the hand of … Chavez." As is often the case, the article does not state its source with precision, but rather, uses only the vague term "intelligence circles."

What is certain is that the conservative press of the region, staunch allies of Washington, has managed to create a climate of tension in the face of the Venezuelan "expansion" by appealing to the traumatic memory of the Chaco War (1932-1935) between Bolivia and Paraguay, in which 100,000 people died. So far, of the 24 "bases" conservatives claim will be constructed in Bolivia, only two have been approved: one on the shore of the Paraguay River, and another on the border with Brazil. When asked by El Mercurio, Chile’s Defense Minister, Vivianne Blanlot, assured that the issue of "rearmament" by Bolivia "has been exaggerated and is not cause for alarm."7

When Paraguay announced it would suspend immunity for American troops, the American Ambassador in Asuncion, James Cason, warned the recently appointed foreign minister, Rubén Ramírez, about "the supposed intentions of Bolivia to advance on Paraguayan territory, with backing from Venezuela."8 The president of Paraguay’s Congress, Enrique González Quintana, stated at the same time that Ambassador Cason "told me they had no knowledge of such an intention by Bolivia concerning Paraguay, but he also warned me that we shouldn’t fall asleep."9

Bolivia’s Internal Situation

In order to complete the picture of the region, it is worth stopping to consider the internal situation of Bolivia. Since the middle of September, rumors have been flying in La Paz over an effort to destabilize the government of Evo Morales by the United States and ex-president Gonzalo Sanchez de Losada, now living there "in exile." The political climate heated up abruptly when, during the early morning of October 5, approximately 4,000 miners from independent cooperatives (a sector made up of small- and medium-sized business owners) attempted to attack, with weapons and dynamite, the state-owned Posokoni (Huanuni) mine, where 800 unionized miners work.

The mine is one of the richest in Bolivia and is coveted by the so-called cooperative members. Several weeks back, "several cooperative leaders were denounced for having traveled to London to meet with official representatives of ex-presidents Jorge ‘Tuto’ Quiroga and Gonzalo Sanchez de Lozada (both mining executives), with the objective of selling a block of shares of the Posokoni mine, privatized in 2002, to the British company Grant Thornton, which bought out the mining company RGB Resources, PLC the former concessionaire of the mine."10 For this reason, Morales denounced the existence of a "conspiracy" against his government, based on the fact that the ex-presidents—who carried out the privatization of the mines and other natural resources—are acting to destabilize the Bolivian government.

Although Morales managed to come out ahead after a difficult week, his government faces serious challenges: friction with Brazil over the nationalization of hydrocarbons to the possible detriment of Brazilian-owned oil company Petrobras; increasing difficulty with the United States over the alliance between Bolivia and Venezuela and the criticism released by Washington against the policies of Evo Morales on coca crops; and very serious problems with the oligarchy of Santa Cruz and the governments of three other provinces, all of which are seeking autonomy and have the highest concentrations of the country’s natural resources.

This last issue is one of the most serious in the medium term. There has been talk of the elite of Santa Cruz, the richest province in the country, carrying out an attempt to secede, which would be countered by "an intervention by Venezuelan forces to disarm the civilian population."11 Few observers doubt the existence of paramilitary forces in Santa Cruz that are training in rural areas and on land belonging to estate-holders while receiving support from local landowners and large business owners. Moreover, the existence has been revealed of "a paper by the Argentine chancellorship estimating a 56% chance of civil war in Bolivia."12 If this is true, and if the surrounding governments are aware of the gravity of the situation in Bolivia, all the other moves (from the military actions of Mercosur to the pressure from Washington on Paraguay) make perfect sense.

Paraguay: At the Heart of the Dispute

Several days after the Nicanor Duarte Frutos’ administration decided to lift diplomatic immunity from American troops, Ambassador Cason formally requested the decision be "reviewed." But the U.S. embassy in Asunción insisted that conversations about military cooperation were proceeding normally and there was speculation that "Washington might make an exception for Paraguay in order to proceed over the next year with joint military exercises."13

Two days later, in what was interpreted to be a clear "reprisal" from Washington, Cason declared to the media that the United States would suspend its "Medrete" medical assistance program.14 Cason was subsequently criticized for interfering in Paraguay’s internal affairs, and the embassy had to release a statement in which the ambassador made clear he is not "bothered" by Paraguay’s decision.15

During the same week of controversy with ambassador Cason (October 8-14), two news stories made headlines, revealing the scope of the conflict of interests in Paraguay. On Thursday the 12 th , the daily newspaper Ultima Hora out of Asuncion broke that the Duarte Frutos administration voted for Venezuela to become a non-permanent member of the United Nations Security Council. Obviously, the United States views this eventuality with concern and is placing its bet on Guatemala for the same post. According to the article, on Tuesday the 10 th the ambassador of Paraguay in Caracas informed the Chavez administration of Duarte Frutos’ decision, "situating Asuncion in a close relationship with the Mercosur countries."16 Also reported was that "in correspondence with the political integration of the South American alliance, Paraguay will begin receiving, in March of 2007, the first $48 million allocated to improve physical infrastructure and competitiveness."17

The second piece of new came out of Venezuela. The state-owned oil company PDVSA will analyze the feasibility of a project to extract natural gas and oil from the Chaco region in Paraguay over a period of 10 months. "There are signs of gas as well as crude oil," maintains Jose Humberto Sanchez, a geologist and PDVSA director of explorations. The Venezuelan-based oil company supplies Paraguay with 70% of its diesel fuel, providing financial support for the purchase.

In perspective, the impression is that towards the end of September and the beginning of October, the large member countries of Mercosur scored a victory over Washington, a project they had been working on since July of 2005, when the first American soldiers arrived in Paraguay with diplomatic immunity. It is also true, as a communiqué from the Paraguay Peace and Justice Service indicated, that the security agencies of the United States continue to operate; "they are functioning in the country without any law, like the FBI, DEA, and agents from the CIA, officially recognized by President Duarte Frutos in July of last year." The human rights organization calls for "caution," since the governments of Paraguay and the United States may in fact be "studying a new judicial form that could even expand the guarantees given to American soldiers."

Without doubt, the delicate equilibrium of power requires caution. But something is changing, and Washington is losing points. For example, the attempt of the United States to establish a permanent presence in Paraguay, in reference to the Triple Border, "got put in the freezer."18 In essence, all that is happening during this pressing time in the Southern Cone (to the list should be added the elections in Brazil and Ecuador) is reversible. But if we look at the long term, there is an unmistakable shift. As Chomsky says, " Of course this shift is highly unwelcome in Washington, for the traditional reasons: The United States expects to rely on Latin America as a secure base for resources, markets and investment opportunities. And as planners have long emphasized, if this hemisphere is out of control, how can the United States hope to resist defiance elsewhere?



Noam Chomsky, "Latin America Declares Independence."


Rosendo Fraga, "El factor militar en América Latina."


"Uruguay distendió el clima del Mercosur", Clarín, Buenos Aires, September 30, 2006, online at


"EEUU pidió a Paraguay por la inmunidad de sus tropas", Clarín, October 7, 2006.


La Nación, Asunción, September 13, 2006, online at


ABC, Asunción, September 13, 2006, online at


El Mercurio, Chile, article by Sergio Espinosa and Andrea Sierra, October 8, 2006, online at


Online at October 9, 2006.


Online at October 10, 2006.


Luis A. Gómez,"Huanuni y el metal del diablo."


Rosendo Fraga.


Rosendo Fraga, Negritas mías.


Clarín, October 7, 2006.


Medical Readiness Education and Training Exercises (Medrete). For a brief description of Medrete, see Raúl Zibechi, "Paraguay: Platform for Hemispheric Hegemony," August 18, 2006. Online at


"Represalia de EEUU a Paraguay", October 9, 2006, online at


Wire from Prensa Latina, Asunción, October 12, 2006.




"Paraguay retira trato preferencial a soldados de EEUU," Asunción, October 11, 2006, online

Translated for the IRC Americas Program by Nick Henry, IRC.

Raúl Zibechi, a member of the editorial board of the weekly Brecha de Montevideo, is a professor and researcher on social movements at the Multiversidad Franciscana de America Latina and adviser to several grassroots organizations. He is a monthly contributor to the IRC Americas Program (



Noam Chomsky, "Latinoamérica declara su independencia," The New York Times Syndicate, September 2006.

Rosendo Fraga, "El factor militar en América Latina," October 12, 2006, online at

Luis A. Gómez, "Huanuni y el metal del diablo," Brecha (Uruguay), October 13, 2006, online at

Serpay-Py (Servicio Paz y Justicia-Paraguay), "¿Retiro de inmunidad a cambio de qué," Asunción, October 6, 2006.

Raúl Zibechi, "Paraguay: Platform for Hemispheric Hegemony," August 18, 2006. Online at