As Chile and U.S. Relationship Grows Increasingly Close, Lagos Risks Further Isolation in Latin America

October 8, 2004 COHA

Despite Santiago’s close relations with Washington, the Bush administration was unwilling to support José Miguel Insulza’s candidacy for OAS Secretary General, a key factor in his decision to withdraw his bid. As pressure mounts for new OAS head Miguel Angel Rodriguez to resign due to corruption charges in his native Costa Rica, Santiago’s recent actions and “carnal relationship” with the U.S. could jeopardize Insulza’s prospects if the OAS Secretary-General race reopens, and the latter again decides to run for office.
Chile has been a faithful consort of U.S. initiatives in the UN and has pragmatically sought to gain financially and diplomatically from close ties with Washington.
Chile embarrassingly deferred to the U.S. by yanking Juan Gabriel Valdés from his post as Santiago’s UN ambassador after the highly regarded diplomat adamantly refused to back the White House’s timetable on invading Iraq. Lagos made this move in order to win approval of a pending bilateral trade agreement with Washington.
The Lagos administration voted to condemn Cuba’s human rights record at the UN Human Rights Commission’s gathering in Geneva earlier this year, ignoring Brazilian and Argentine efforts to persuade Chile to join them in abstaining.
Chile remained completely silent during the U.S.-orchestrated removal of Haiti’s constitutional President Jean-Bertrand Aristide, and, in spite of strong domestic opposition, Santiago sent both military and financial aid to Haiti following Aristide’s ouster.
While over ninety percent of Chileans opposed the war in Iraq, Lagos has turned a blind eye to the numerous Chilean mercenaries now operating in that country.
In a major setback, the troubled legacy of the War of the Pacific continued to reverberate as Bolivia decided to construct a multi-billion dollar natural gas pipeline through Peru, rejecting the cheaper alternative via La Paz’s historic rival, Chile.
Recent diplomatic spats between Chile and bordering Bolivia and Argentina have raised tensions in the region as the Lagos government appears increasingly isolated among its neighbors.
President Lagos would do well to heed the voices of his critics or risk greater alienation of his country within Latin America as Chile becomes increasingly thought of as Washington’s caddie in the region.

Problems at the OAS
During this past year, Chilean Minister of the Interior José Miguel Insulza was often discussed as a candidate to become the Organization of American States’ (OAS) new Secretary General. However, last February, Insulza withdrew his bid after failing to receive U.S. endorsement. During the OAS’s General Assembly session in Quito this past June 7, former Costa Rican President Miguel Angel Rodriguez was elected. Since Argentina’s economic collapse in 2000, Santiago has maintained its aspirations to be South America’s next regional leader; a Chilean official elected to the OAS post would have been a giant step for its regional ambitions. Yet, despite increasingly intimate relations with Santiago, Washington still was not ready to press for the Chilean as its “second in command” in the Americas, particularly since Insulza, like former Chilean UN Ambassador Juan Gabriel Valdés, took the principled position of ardently opposing the U.S. invasion of Iraq. Hence, President Bush was quick to support the Rodriguez nomination. The White House’s rebuff was a signal to Santiago that it must cure its fractious relations with its neighbors and be a more reliable liegeman to Washington’s controversial policies, before it can achieve its aspirations to truly be Washington’s primus inter pares in Latin America.

Less than two weeks after officially becoming the new OAS Secretary General, Rodriguez has come under heavy scrutiny for accepting $140,000 from José Antonio Lobo, former head of Costa Rica’s electricity company. Lobo testified last week that the money was Rodriguez’s share of an over $2 million prize provided by the French telecommunications firm Alcatel, for winning a $149 million cellular telephone line construction contract in 2001, during Rodriguez’s presidency. Now that these corruption charges have come to light, some OAS members have been swift to call for Rodriguez’s resignation. Costa Rican President Abel Pacheco has been joined by Costa Rican legislatures and top Nicaraguan, Mexican and Argentine leaders to demand Rodriguez step down. With pressure mounting, the OAS may soon have to find a new Secretary General, and Insulza conceivably could once again become a top candidate for that position. However, Santiago’s recent alienating behavior may cost Insulza the Latin American votes he normally could have counted upon to become the OAS head. Regrettably for this talented figure, if a new election were held, it certainly would be an uphill battle for him to get the backing of his country’s immediate neighbors.

Cozying up to Washington at the UN
While Washington failed to support Insulza’s bid, over the last few years Chile has displayed a consistent tendency to support controversial U.S. initiatives in the UN and elsewhere, at times deferring to Washington in order to receive its political and economic kudos. In December 2002, negotiations for a bilateral free-trade agreement between Chile and the U.S. were finalized, the first between a South American nation and the U.S. During the spring of 2003, as debate raged in the UN over Washington’s intentions to invade Iraq, the agreement had still not been ratified. At that time, and under Lagos’ instructions, Chile’s UN Ambassador Valdés criticized U.S. unilateralism over Iraq. He insisted that the U.S. should comply with the international body’s resolutions, thereby increasing tensions between the two governments. But under pressure from Secretary of State Colin Powell and other U.S. officials, who used the still unratified free trade agreement as diplomatic leverage, Lagos caved into Washington and withdrew Valdés from his post. According to Chile’s La Tercera, Valdés had told some Chilean senators that if ordered to support the war, he would resign.

Heraldo Muñoz, a classmate of National Security advisor Condoleezza Rice at Harvard and a man held in high esteem by Washington, replaced Valdés and as a result the White House expedited the signing and subsequent Congressional passage of the trade accord, which officially went into effect on January 1, 2004. As the BBC noted at the time, many Chilean officials felt “War is inevitable and it is not worth losing Washington’s friendship when there is a crucial trade pact at stake.” This type of pragmatism bespeaks a willingness to blur principles if the bottom line is improved. In truth, it can be said that Chile is preeminently a bottom line country.

Furthermore, on a number of other occasions, actions taken by the Lagos administration favored the U.S. while alienating Mercosur countries, with which Chile is associated, and other Latin American nations. In April 2004, Chile voted to condemn Cuba during a meeting of the UN Commission on Human Rights. The resolution barely passed with a vote of 22-21, with ten abstentions. Many in Chile wanted their nation to abstain along with Mercosur partners Brazil and Argentina. Socialist Senator Jaime Naranjo, who heads the Congressional Committee on Human Rights in Chile, called the resolution “A useless ritual which has failed to have any effect on civil liberties in Cuba.” Brazilian President Inacio Lula da Silva dispatched several of his top officials to meet with Lagos to attempt reaching a compromise that would have had Chile join Brazil and Argentina in abstaining on the resolution, after which all three would subsequently issue an announcement endorsing civil liberties. Fortunately for the Bush administration, Lagos refused to abstain; without Chile’s vote, the resolution would not have passed.

Chilean soldiers and funds now aiding US causes worldwide
Over the past year Chile has been providing the U.S. with more than just votes. Santiago not only supported with its silence last February’s U.S.-engineered ousting of constitutionally-elected Haitian President Jean-Bertrand Aristide, but sent hundreds of soldiers from its historically ill-reputed and human-rights violating armed forces, including 120 members of its Special Forces, to aid the U.S. military in quelling violence on the island nation. This step was taken despite the fact that a poll held on April 23 by the Centro de Estudios CERC showed that 58 percent of Chileans were against sending troops to Haiti. Chile also has contributed troops, police and engineers to the newly minted, if relatively under-involved, UN multinational peacekeeping force currently deployed to the country and has played a major role in training Haitian police recruits. In late July, a donor’s conference was held in Washington that raised over one billion dollars in financial assistance for poverty-stricken Haiti, and included commitments from the U.S., UN, EU, World Bank, and Inter-American Development Bank. Although Chile has its own economic problems, the Lagos’ government pledged millions to the new Haitian government, joining Brazil as the only other Latin America nation to do so.

While Chile has not officially sent troops to Iraq as part of the U.S.’s multinational coalition, hundreds of former Chilean military personnel are in fact serving in that country. An estimated 20,000 international mercenaries are presently in Iraq as employees with private defense-related corporations such as Blackwater USA, Halliburton, DynCorp, and Vinnell Corporation, with many Chileans included in that total. For months, Blackwater USA has been recruiting former members of Chile’s armed forces. Last April, sixty former Chilean commandos, some of whom served in units active during the “dirty war” of dictator Augusto Pinochet, arrived in North Carolina to train and prepare for deployment to Iraq. These mercenaries serve up to a year and can earn $4000 a month, but some have even been paid $1000 for one day’s work. Alejandro Navarro, a member of the Chilean parliament who has sought an end to the practice of foreign companies’ recruiting Chilean soldiers, has said, “Along with the ethical problem brought by the presence of irregular troops from our country in conflicts that are not ours, there is the problem of personal security and health and who answers for these expenses in case of accidents.” The unofficial buildup of Chilean troops in Iraq comes only a year after an overwhelming 92 percent of Chileans said they opposed U.S. intervention in Iraq. As Chilean writer Roberto Manriquez has observed, “As with Haiti, the will of the people is all too easily ignored.”

The battle over the pipeline
Chile has suffered a string of diplomatic setbacks of late and is in danger of further isolating itself from its neighbors. One such blow occurred as the legacy of the War of the Pacific (1879-1884), which formally ended over a century ago, continued to be played out. In that conflict, Peru and Bolivia paid a high price in terms of mandatory territorial concessions to Chile. As a result of bitter memories, Chile just lost out to Peru in obtaining a multi-billion dollar pipeline construction and maintenance project to allow for the export of Bolivian natural gas to the Pacific coast. On August 4, 2004, Bolivian President Carlos Mesa and Peruvian President Alejandro Toledo signed an historic agreement to construct the nearly 700 mile-long pipeline to transport to the coast some of Bolivia’s 13 trillion cubic feet of natural gas reserves, worth an estimated $70 billion. After extensive infrastructural construction, the Peruvian port of Ilo, rather than Chile’s much closer Iquique, will be used to export the Bolivian gas to Mexico and the U.S. By permitting Bolivia to make use of Ilo, located 800 miles south of Lima, it will be Peru, not Chile, which stands to benefit significantly from the resultant increase in trade and job growth.

At first it seemed unlikely that Chile would be cut out of the deal simply because it provided the most cost-effective route to the coast, an estimated $600 million cheaper than the Peruvian plan. In 2002, Bolivian President Gonzalo Sanchéz de Lozada recognized this fact by publicly announcing his support for the proposal to build the pipeline to Iquique, which previously had been touted by his predecessor, President Jorge Quiroga. This decision infuriated average Bolivians who could not bear rewarding their historic enemy, Chile. Almost immediately, nationwide demonstrations were staged, culminating in the death of 120 protesters, which directly led to Sanchez de Lozada’s resignation. Despite the lower costs, Mesa refused to deal with Santiago until Chile recognized his country’s territorial claims to its former Pacific coastline, which is something very unlikely to happen. Bolivian Indigenous Affairs Minister Ricardo Calla recently restated his country’s position, “We will not deal with Chile…unless we recover sovereign entrance to the sea.”

Relations with Chile deteriorate
The Lagos administration continues on the path toward geopolitical isolation as indicated by the recent diplomatic spats which have emerged between Chile and its neighboring countries. Taxes have quadrupled at the Chilean port of Arica, to which Bolivia was guaranteed free access as a result of the treaty ending the War of the Pacific. According to LatinNews, Mesa’s government “Is freely admitting that relations with Chile are now the worst they have been since 1978.” On September 28, Chile also removed Emilio Ruiz-Tagle, its consul in La Paz, immediately after he contradicted his government’s policy by saying Bolivia should be granted access to the Pacific coast. In response to Ruiz-Tagle’s removal, Bolivia has threatened to pull its consul from Santiago and has refused to negotiate with Chile until after its next presidential election in December 2005.

Tension is also forming between Chile and Argentina after an article by Chile’s new foreign minister, Ignacio Walker, criticizing Argentine President Néstor Kirchner, was re-printed in Argentina’s daily Clarín. In the piece, written in May during a period of heightened friction between the two nations as a result of energy-strapped Argentina’s decision to reduce its gas exports to Chile, Walker asked of Kirchner: “Does he respect treaties and contracts? Not if they endanger his popularity.” Walker, appointed foreign minister September 28, also wrote that the President’s Peronist Party had “Authoritarian, corporate, and fascistic traits.” A senior official at the Argentine Embassy in Washington tried to downplay Walker’s article, telling COHA that, “An incorrect academic article will not override the vocation for peace, friendship and integration of both nations, of their leaders and of Presidents Lagos and Kirchner.” Still, it seems that rather than ignoring the comments, Buenos Aires was quite troubled by them. President Kirchner has hinted at canceling a planned late-November trip to Chile, and testy relations between the two nations today leave much room for improvement.

Chile’s commercially-oriented leadership, no doubt, will remain sensitive to Washington’s expectations and continue its current trend of striving to be Bush’s unofficial legate to the rest of the Americas. It is no accident that Chile is never included in a listing of Latin America’s populist democracies, even though President Lagos is a member of the Socialist Party. But by ignoring many of his constituents, Lagos seriously risks further alienating Chile’s neighbors and is likely to continue to suffer the political and economic consequences of being a relative outcast in its own region.