The Trade-off: The Economic Nexus
"IN VIEW OF THE DEATH OF THE CHAIRman of the Supreme Soviet Presidium, Leonid Ilyich Brezhnev, the executive branch has declared national mourning on the day of his burial. Moreover,...
...Innovative commercial arrangements such as the USSR's Brazilian and Chilean agreements of the 1960s have historically provided an incentive for Latin American countries to trade with CMEA countries...
...In addition to equipment and services for major infrastructure projects and arms, CMEA exports to Peru have included transport vehicles and a wide range of industrial goods...
...Lima Radio Del Pacifico, April 30, 1985 in FBIS-LAM, May 1, 1985...
...Peru and Nicaragua have also been mentioned as other possible stops on his tour...
...As in Brazil and Argentina, the first significant Soviet commitments were major infrastructural projects: a 1971 agreement for a port and fish processing facility at Paita (to be paid for with fish) and in 1972 a massive hydroelectric and irrigation scheme at Los Olmos...
...Romuald Tomberg, "Trade and Economic Ties Between the USSR and Latin American Countries: Problems and Prospects," Soviet Panorama (Moscow), June 13, 1984 in Reprints from the Soviet Press Vol.39, no.1 (July 15, 1984), p. 4 5. 21...
...For example, The Miami Herald, March 24, 1976...
...A petroleum, metallurgical and coal mining sectors, as broad series of trade agreements were signed with well as trolley buses, trucks and other industrial goods...
...MONG NON-SOCIALIST DEVELOPING countries, Argentina had, by the early 1980s, become the USSR's second largest trading partner after India...
...In 1985, there were over 30 such mixed companies in Latin America...
...Most of the Moscow talks focused on trade, although the Soviets clearly welcomed Argentina's participationalong with Mexico, India, Greece, Tanzania and Sweden-in the Group of Six's calls for nuclear disarmament and in Contadora efforts to negotiate peace in Central America...
...The main goal of such assistance is clearly to stimulate East bloc exports, even though regional governments often use only a small portion of the total credits available...
...Both groups receive political training, although it is only members of the latter category that are likely to attend the highly politicized Patrice Lumumba Friendship University or other schools for cadres...
...The head of the textile section of the Exporters Association charged "unjustified economic aggression" and the Soviet Union, Bulgaria and Rumania stepped in to buy what could no longer be placed on the U.S...
...Kuznetsova and Mnenok, p.24...
...Semenov, M.F...
...Despite the military's opening to foreign capital, its harsh anti-communist rhetoric and active support of the U.S...
...The USSR is pre...
...L6pez, p.58...
...Nikolai Zinoviev, "Dinimica de las relaciones econdmicas," America Latina No.3 (March 1983), p. 13 . 68...
...Of the CMEA countries, Czechoslavakia has been the most involved, participating in 18 of the mixed enterprises...
...embargo on grain sales to the USSR, the Soviet Union imported massive quantities of Brazilian corn and soya products...
...6. Colin W. Lawson, "The Future of East-South Trade After UNCTAD VI," Third World Quarterly Vol.6, no.1 (January 1984), p. 146...
...erak who seized power in 1976 institutionalized mass I Argentine wheat: a key export I - RThe Other Super Power The Other Super Power repression, torture and "disappearances" on a scale rivalled only by Pinochet's early years in Chile...
...The new fishing accords brought the possibility of increased tension with Britain, which promised to extend the "zone of exclusion" it claims around the Malvinas to 200 miles in February 1987...
...Students' criticisms include extreme frustration with bureaucracy and an inefficient retail and service sector, problems with racism, boredom with required courses in "scientific Communism" and related subjects and intolerance of minority opinions...
...Latin American Economic Report, August 31, 1986...
...Athos Fava, "An Indispensible Condition of Social Progress," World Marxist Review 4 (April 1984), p. 2 1. 49...
...In the 1970s, 18% of Latin America's 44,800 megawatts new generating capacity was installed by socialist country contractors...
...During the early 1980s...
...CMEA countries in 1974, granting some $950 million The Soviets have played a key role in major energy in long-term credits---over twice what the socialist projects, including hydro- and thermoelectric stations counties had granted Salvador Allende's more such as Salto Grande (the country's second largest ideologically compatible government in Chile.m plant, shared with Uruguay...
...Rudenko, Kommunisticheskie partii Latinskoi Ameriki v bor'be za edinsrvo antiimperialisticheskikh sil (Moscow: Mysl', 1976), p.131...
...The USSR was, in turn, the largest customer for Argentina's exports...
...The USSR began to ship weapons one month after the coup in Chile, in a gesture many thought was designed to turn the screws on Pinochet.60 The USSR also made significant purchases of Peruvian sugar at the same time, in an apparent effort to bolster the country's economy.6" The first weapons arrived in 1973-1974, with some 400 T-55 tanks...
...Critics of the agreements, such as the chair of the Fishing Boat Owners Association, argue not only that Peru should receive a higher percentage of the catch, but that boat crews should include a greater number of Peruvians in order to assure that "Soviet boats really take what is established in the contracts.'"66 Peru was the first Latin American country (other than Cuba) to sign five-year supply contracts for traditional exports...
...Declaring itself a defender of "Western civilization" against "subversion," the Argentine military murdered between 9,000 and 30,000 people in its almost seven years in power...
...For the Soviet Union, the major problem is the huge trade deficit...
...Maintenance requires less specialized training, a consideration of particular importance in developing countries...
...In some cases, similar attitudes grow out of real concerns: lack of services and spare parts, bureaucratic sluggishREPORT ON THE AMERICAS 30 Argentine and Soviet sailors confer dockside ness-common in centrally planned economies-in responding to small orders or submitting competitive bids, and problems in integrating East bloc equipment into production processes long reliant on Western and Japanese technology...
...Buenos Aires Herald, May 17, 1981, in FBIS-LAM May 21, 1981...
...Ol'shanyi, p.66...
...In general, the poorest Latin American countries-Haiti, Honduras, Bolivia, where secondary school systems are small and deficient-send few students to the USSR and Eastern Europe...
...Lima Cadena Panamericana Television, April 1, 1985 in FBISLAM, April 2, 1985...
...Buenos Aires Herald, June 7, 1981, in FBIS-LAM, June 9, 1981...
...Ruben Berrios, "Relations Between Peru and the Socialist Countries," in Varas, ed., Relations (forthcoming...
...In the 1985 debt negotiations with the USSR, Peru's Minister of Industry was accompanied by 35 private businessmen and representatives of 23 state enterprises, 11 of which would have gone bankrupt had the Soviets rejected the proposal to accept non-traditional goods in debt payment...
...In 1981, with the Argentine wine industry in a slump, retired Commodore Juan Jos6 Amigo, who headed the state wine firm, declared that the USSR could be "the salvation of the wine industry" if it would only buy the 28 million litres it had promised...
...While this is offset tc some degree by a surplus in Soviet trade with much 01 the rest of the Third World, the large deficit has clearly been a point of tension in trade negotiations with Latin America...
...It has been estimated that the number of Latin Americans attending Lumumba is about one thousand...
...The Czechs have helped construct over 30 thermoelectric plants and several hydroelectric projects, including one near Macchu Picchu...
...9 2 -93...
...Quoted in Sizonenko, Ocherki, pp.132-133...
...CEPAL, pp.14-15...
...Oleg V. Zvonarev, Bor'ba demokraticheskikh sil Argentiny protiv mestnoi reaktsii, imperializma i neokolonializma (Moscow: Institute of Latin America, dissertation avtoreforat, 1985), p.2 0 . 42...
...IN A MOVE NOT UNLIKE THE EMERGENCY purchase of Brazilian shoes (see above), the USSR showed it is not averse to using trade to score occasional political points...
...Blasier, Giant's Rival, p.12...
...presence in South America and for diversifying grain In 1981-1982, Argentina and the USSR initiated sources...
...Most of grain trade diminished, but only slightly...
...Alfonsin's October 1986 visit to the USSR was the first ever by an Argentine head of state...
...While Peru has signed "half-and-half" fishing contracts with Cuba and Poland, the Soviet fleet was obliged to deliver only 8% and-more recently-15% of its catch to Peru...
...trade with the grain imports...
...Pitovranova, "Sovetsko-argentinskie torgovo-ekonomicheskie sviazi," in Sizonenko, ed., Rossiia, SSSR-Argentina, pp.92-93...
...In addition, some CMEA country equipment is less complicated, such as tractors with manual transmissions...
...Cuba and the USSR recognized the Argentine military regime shortly after it took power...
...Rub6n Berrios, "The USSR and the Andean Countries: Economic and Political Dimensions," unpublished manuscript...
...Ironically, this entire build-up occurred after 1975, when radical Velasco Alvarado had been ousted as head of state by his more conservative colleague General Francisco Morales Bermfidez...
...Motivated largely by mundane commercial concerns, Moscow has built economic ties irrespective of ideology...
...In Argentina, nearly a quarter of the country's power is generated with Soviet equipment...
...It is a realism too often lacking on this side of the world...
...48 Initially there was little change in commercial ties with the USSR...
...invasion of the Dominican Republic, its doctrine of the "national security state" t and reign of terror against the Left and the labor movement, certain aspects of the regime's plans for an "economic miracle" led to limited cooperation with the USSR and its allies...
...The socialist countries bailed out Peru's textile industry in 1982 when the U.S...
...Turrent (forthcoming...
...Among the Soviets taking pains to distinguish the Argentine junta from the "fascist" Chilean and Uruguayan regimes was the head of the CPSU's International Department Latin America section...
...The overwhelming importance of Soviet-Argentine commerce was undoubtedly the main consideration in this odd rapprochement, although there were a number of secondary concerns that contributed to attitudes on both sides...
...Some reports even had the USSR offering to train an Argentine for space flight.5" Nevertheless, despite Alfonsin's promise to buy more from the USSR and "to give a sense of justice to our foreign trade and favor more those who favor us," the trade imbalance remained a sticking point in otherwise warm Soviet-Argentine relations...
...N ADDITION TO A REPUTATION-NOT ALways justified--for producing poor quality goods, the CMEA countries' economic relations with Latin America are beset by a variety of difficulties...
...Soviet specialists have also studied the hydroelectric potential of other rivers and the country's oil resources...
...The Washington Post, November 5, 1986...
...Concerns about this are expressed in L. Klochkovskii and I. Sheremet'ev, "Latinskaia Amerika v tiskakh zavisimosti," Pravda, April 14, 1986...
...Berrios and Edelman, p.1003...
...This 1982 condolence proclamation was issued not in Havana or even Managua, but in Buenos Aires, where some six years earlier a right-wing military regime had seized power, claiming Argentina was in the forefront of a "third world war" against communism, "disappearing" between 9,000 and 30,000 "subversives" and sending assistance to the Nicaraguan contras and the Salvadorean military...
...In 1986, the USSR had its first good grain harvest in many years...
...Miller and Whitehead, pp.127-128...
...The apparent incongruity-ultra-right generals mourning a Communist head of statetypifies a central feature of Soviet-Latin American relations...
...vented, by its lack of membership in the Inter-Ameri can Development Bank and World Bank, from bidding on the many development projects financed by these institutions in Latin America.'* Finally, the widespreac privatization of Latin American state sectors in the 1980s-in response to pressure from international lending agencies-has diminished the CMEA's tradi...
...See M.F...
...Argentina's inability to provide credit...
...I N 1984, THERE WERE AN ESTIMATED 1 1,130 Latin Americans (not including Cubans) studying in universities in the USSR and Eastern Europe, 73% of them in the Soviet Union...
...6 Since the late 1970s, Peru has generally hosted about one hundred Soviet military advisers and close to one thousand Peruvians have attended military courses in the USSR and Eastern Europe.6 And more recently, Peru has received dozens of Mi-24 helicopters, the "flying tanks" that are among the most advanced in the Soviet arsenal...
...Blasier, Giant's Rival, pp.64-66...
...Vacs, p.90...
...Carlos Estevam Martins, "Brazil and the United States from the 1960s to the 1970," in Julio Cotler and Richard Fagen, eds., Latin America and the United States (Stanford: Stanford University Press, 1974), pp.286-288...
...In July 1986, the two countries signed a fishing agreement which granted the USSR a 180,000 metric ton quota (equivalent to about 40% of the annual catch in Argentine territorial waters), subject to a 3-5% tax, a reduction in the number of Soviet trawlers in the area and a requirement that 10% of all crew be Argentines...
...7 Yet 10 years later they were remarkably silent about the much bloodier and more repressive junta led by General Jorge Rafael Videla...
...Blasier, Giant's Rival, pp...
...Regional Hegemony," in Varas, ed., Relations (forthcoming...
...The Sobradinho hydroelectric station involved the creation of the largest artificial lake on the American continent, surpassed in size only by Titicaca, the natural lake shared by Peru and Bolivia...
...Latin American Weekly Report September 25, 1986...
...Latin America Weekly Report, August 28, 1986...
...9 The Argentine CP went so far as to blame the political terror in 1976 on "the hand of criminals and the sinister activity of the imperialist CIA...
...Department of State refers to these educational programs as "the most broadly based and generous of all [Warsaw Pact] aid efforts...
...embargo used in Argentine reactors and the Argentines shipping on grain sales to the USSR-that trade soared...
...The USSR stepped in and bought 120,000 pairs of shoes, saving 29 factories and several hundred jobs...
...In the less likely event that prices increase, these long-term commitments may become distinctly disadvantageous...
...t The doctrine of the national security state was a key element of military thought and practice in Brazil after 1964 and in the rest of the Southern Cone in the 1970s...
...Soviet arms sales to Peru-over $1 billion since 1974 59-have been even more important than large development projects in the overall trade between the two countries, yet have attracted little attention...
...Heavily dependent on imported petroleum, Brazil has nonetheless embarked on a large-scale alcohol fuel program that includes use of Soviet technology for converting wood to alcohol.2 8 Although the USSR slashed oil deliveries to Brazil in the late 1970s, by 1981 it had agreed to send some 30,000 barrels a day at a time when it was cutting back deliveries to Western Europe...
...Offering little or no evidence, they argued that he and the other "moderates" were opposed by a reactionary wing of "Pinochetistas" who sought to institute "Chileanstyle" repression-as if this did not already exist...
...Artur Avetsian, "Colaboraci6n en el campo de la energ6tica," America Latina no.4 (April 1983), pp...
...developed its own kinds of subcontracting schemes...
...Certain types of Soviet and Eastern European equipment have proven highly reliable, particularly in hydroelectric power...
...The Peruvians accumulated nonetheless an immense debt to the Soviet Union...
...and the USSR was negotiating participation in a major hydroelectric and mining project in the Carajas region of Pard state.21 After Cuba, Brazil has imported more from the CMEA than any other Latin American country since 1970, primarily because of its large purchases of Soviet oil...
...Two years later, the USSR-attempting to differentiate itself from the United States-allowed Brazil to repay 25% of a $100 million credit line in manufactured goods...
...for their part, the Soviets agreed to buy 4.5 million metric tons of grain per year from 1986-1990.'9 This $100 million yearly accord marked a substantial increase over earlier import levels and promised to bring the USSR's trade deficit closer to the 10% sought by the Soviets...
...Argentina's commercial relations REPORT ON THE AMERICAS 32 with the Soviet Union and its allies expanded rapidly Argentina has also bought equipment for the chemical, under the government of Juan Domingo Per6n...
...But the 10% cap on debt payments has serious implications for the USSR as one of Peru's main creditors...
...With the drop in petroleum prices that meant reduced hard currency earnings, this led to a cut in Argentine grain and meat purchases.54" In order to signal displeasure over its huge, continuing trade deficit with Argentina, the USSR has recently been increasing purchases of agricultural goods from Uruguay, which-since 1984-has been more willing than Argentina to reciprocate by acquiring Soviet machinery.55 SOVIET ATTENTION FIRST FOCUSED ON Peru in 1968, when a coup installed a radical nationalist government headed by General Juan Velasco Alvarado (see above...
...In Latin America, the countries sending the largest numbers of students include Colombia (2,140), Nicaragua (1,885...
...and G. Kuznetsova and A. Manenok, "Sovetsko-argentinskie torgovoekonomicheskie otnosheniia," Vneshiaia torgovlia 3 (March 1986), p.25...
...Isabel Turrent, "Brazil and the Soviet Union: A Low-Profile Relationship," in Varas, ed., Relations (forthcoming...
...market-which had absorbed some $80 million a year-was effectively closed to Peru and 40,000 workers were threatened with job loss...
...But work on Los Olmos, Paita and a number of less ambitious projects was stalled in the late 1970s by Peru's financial difficulties.58 While contributing significantly to the country's development, Soviet aid was clearly viewed as primarily commercial in nature...
...The U.S...
...Turrent (forthcoming...
...Paniev, pp.13-14...
...The shock of that experience is so brutal for a Costa Rican student accustomed to our democratic way of life that they internally defend themselves and choose to reject the Soviet model totally even if they retain some elements of their Communist education...
...Since the the post-World War II period, Soviet leaders have consistently sought recognition consonant with their new superpower status...
...market.6 " In 1984-1985, Peru renegotiated $566.7 million of its debt with the CMEA countries and won the right to pay between 75% and 90% of its obligations with nontraditional exports-products that include blue jeans, shoes, frozen chickens, candy and textiles.69 While such deals have not opened new markets or increased cash export earnings, they have allowed Peru to pay off part of its huge foreign debt, to earn hard currency from traditional exports that would otherwise be used to pay off East bloc obligations, and to maintain industrial production by producing non-traditional goods for countertrade...
...The Miami Herald, March 27, 1985...
...72 If conservative Belatinde hailed Soviet "realism" in 1985, populist Alan Garcia was forced to assume a more sober stance little more than a year later...
...In 1976, only months after the coup, Buenos Aires hosted a major Soviet exhibition called "The USSR Today...
...See The Wall Street Journal, December 26, 1986...
...foreign policy...
...In 1974, for example, the United States established stiff tariffs on imported shoes, throwing the Brazilian footwear industry into a tailspin...
...Costa Rica (1,580), Peru (I, l8S), the Dominican Republic ( 1,045), Panama (950) and Ecuador (935...
...Elena Martinova, "Brasil," in I. Kumarian, et al., America Latina: petroleo y politica (Moscow: Academia de Ciencias de la URSS, 1985), p.148...
...ed., Rossiia, SSSR-Argentina, pp...
...supplying equipment for a similar plant at Ilha Grande on the Sio Francisco River...
...An additional consideration that sometimes leads to sweetheart deals is-as even Soviet specialists occasionally admit-the "lack of competitiveness" of CMEA-country technology over comparable Western items.9 Poor quality is not always the rule...
...On Argentina and Brazil, see I. Ishchenko, "Zasedanie sovetskobrazil'skoi komissii," Vneshiaia torgovlia (Moscow) 9 (September 1986), p.24...
...and high transport costs...
...3 5 -36...
...At the 1979 Moscow Film Festival, a Swedish entry critical of repression in Argentina drew protests from the Argentine Embassy and was withdrawn because of Soviet government pressure...
...This trend became particularly clear after Khrushchev's fall in 19W2 Soviet planners were, of course, still interested in using trade and aid to lessen Latin American dependence on the United States...
...2 There were other stumbling blocks to harmony...
...Miller and Whitehead, p.125...
...Evanson, p.114...
...Trade accords permitting in-kind repayment provide a crucial shot in the arm to flagging industrial sectors, especially in the 1980s, as pressure from international lending agencies has taken its toll...
...Argentine purchases of Soviet goods have generally equalled only 1% to 2% of its exports to the USSR...
...Less commonly, turn-key plants, installed in Latin America by CMEA companies, have been financed with self-liquidating loans paid for with a portion of the plants' output.6 In other cases, Latin American and CMEA partners have created mixed enterprises, generally with the Latin American side holding a majority of the shares...
...25 In 1981, Brazil and the USSR signed the first contracts for joint work in third countries, including highway and hydroelectric projects in Peru, Angola and Ethiopia.2 ' At times the USSR has used even small purchases of Brazilian goods to score political points...
...But while purely political considerations figured in each case, more often than not these were limited, or subordinated to more basic economic objectives...
...Other kinds of aid-such as scholarships for Latin American students-mixed practical development assistance with political influencebuilding...
...Latin American students generally receive scholarships through intergovernmental exchange agreements and Communist Party or pro-CP trade union organizations...
...22 Nevertheless, Soviet exchange with Brazil is characterized by huge deficits that Soviet trade representatives term "unpleasant" and an obstacle to further expansion.23 Brazilian exports to the CMEA countries, which reached $2.8 billion in 1981, have consisted largely of primary products...
...During this period, the Argentine CP called for the creation of a "military-citizens accord" that was-in the words of a Soviet analyst--"a new theoretical contribution of the Argentine Communists to the development of the broad democratic front...
...Garcia's policy of minimizing debt service has led him to demand new terms from the USSR: henceforth Peru will only meet its obligations with non-traditional exports and the Soviets will have to accept a "three-for-one" formula, paying hard currency for two-thirds of the shipments and accepting the other third as payment on the debt.73 W HEN MIKHAIL S. GORBACHEV MAKES his long-awaited tour of Latin America in 1987, it will be the first time that a Soviet leader has set foot on the Latin American mainland.* The visit will mark the culmination of a long period in which the USSR carefully nurtured economic, political and military relations with a variety of Latin American governments of the left, right and center...
...Kuznetsova and Mnenok, p.24...
...Buenos Aires TELAM, March 13, 1981 in FBIS-LAM, March 19, 1981...
...In 1979 the two countries exchanged high-level military delegations and, in a ceremony attended by General Viola that TASS described as a "transcendent event," Soviet Lieutenant General Ivan Y. Braiko received the Argentine joint chiefs of staff medal...
...Ibid...
...FOI more than a decade, the Soviet firm Traktoroekspon had supplied parts for tractors assembled in the Ciudac Sahaglin plant of another state steel enterprise...
...But in January 1986, Argentina pledged to purchase $500 million in industrial goods from the USSR...
...DOS, p.21...
...Author's interviews, Moscow, March 1986...
...With the project's successful completion, the USSR submitted successful bids for *The author can affirm on the basis of numerous conversations over a month as an exchange scholar at Tashkent State University in Soviet Uzbekistan that Third World students' points of view range from uncritically pro-Soviet to highly disillusioned, with most somewhere in between...
...Manufactured goods have rarely accounted for more than 10% of Brazil's exports to the CMEA, with chemical products, shoes and textiles accounting for most of the total.24 Nevertheless, in recent years, Brazil has widened the list of manufactures to include trucks, and discussions have been held about building Brazilian apple juice factories in the USSR...
...role in Latin America and North-South relations, his commitment to the Contadora support group and his highly publicized program to limit Peru's debt payments to 10% of export earnings have all been welcomed in Moscow as signs of independence from Washington and thus an improvement over Belatfnde...
...Avetsian, p.62...
...Francisco Rojas Aravena, "Diplomatic, Economic and Cultural Linkages Between Costa Rica and the Soviet Union," in Varas, ed., Relations (forthcoming...
...This was the first time Cuba recognized an ultra-right military regime in Latin America...
...During the superpower detente of the 1970s the Soviet Union was able to expand relations throughout the Western Hemisphere...
...In 1970, Brazil signed the first Latin American-Soviet hydroelectic agreement...
...Export-Import Bank recommended that Argentina be denied loans, and the KennedyHumphrey amendment cut off military assistance.' Carter also brought pressure to bear on the USSR and, by blocking UN inquiries into Argentina as interference in "internal affairs," the Soviets assisted an important partner and avoided potential scrutiny of their own human rights record...
...Perhaps most importantly, Latin American governments interested in limiting North American influence have turned to the Soviet Union and its allies with a variety of expectations and experiences...
...military aid and purchases of advanced fighter aircraft by Chile (F5s from the United States) and Ecuador (a dozen Jaguar planes from Britain...
...Nevertheless, although there were sporadic attacks on Communist Party offices and members, and occasional seizures of Soviet and Bulgarian fishing boats, the military regimes that ruled Argentina from 1976 to 1983 were remarkably reluctant to criticize the USSR or to go after the Argentine CP...
...and Comisi6n Econ6mica para America Latina [CEPAL], Comercio y cooperacion entre pauses de America Latina y paises miembros del CAME (Santiago: Estudios e Informes de la CEPAL No.51, 1985...
...6 Much of the exported fish is actually caught by the Soviet fleet in Peruvian waters, an arrangement which is subject to perennial controversy...
...They would invest varying amounts of resources in backing friendly governments in Cuba, Chile and later Nicaragua, making up for cut-offs of Western credits or trade...
...Moreover, the national flag will remain at half mast as an expression of mourning at all public buildings, including all Army, Navy and Air Force units...
...ment's 1986 decision to sell off the state-owned stee' company Fundidora Monterrey, for example, had po...
...7. One Soviet source says there are 38 mixed firms: seven in Mexico, six in Brazil, five in Venezuela, three each in Peru and Argentina, two each in Bolivia, Colombia, Chile and Jamaica, and one each in Bermuda, Guatemala, Nicaragua, Panama, Uruguay and Ecuador...
...UNCTAD was founded to protect the developing world against the trade policies of the developed countries-many of which limit access to markets-and to regulate and strengthen commodity prices, which typically decline over time in relation to prices of manufactures...
...Latin American Commodities Report August 7, 1986...
...Not content to restrict their crusade to home, the Argentine generals collaborated closely with counterparts in Uruguay, Brazil and El Salvador, lent a hand to the "cocaine generals" who seized power in Bolivia in 1980 and even played a key role in training the Nicaraguan contras in 1980-1982...
...4. On Eastern European trade with Latin America see Blasier, Giant's Rival, pp.193-195...
...The Soviets balked at the relatively high prices and low quality of Argentine grain...
...tional trading constituencies.'' The Mexican govern...
...8. Berrios and Edelman, p.1005...
...DOS, pp...
...6 , 17...
...tentially disturbing implications for the USSR...
...Gornov, ed., Kommunisticheskie partii Latinskoi Ameriki (Moscow: Nauka, 1982), pp.4, 29...
...Blasier, Giant's Rival, pp...
...In 1980- uranium for enrichment in the USSR...
...As the Argentine generals seized power in 1976, Jimmy Carter moved into the White House, declaring that human rights would henceforth be a major concern of U.S...
...Often Soviet foreign trade involves bilateral barter arrangements, enabling Latin America to acquire machinery and technical services without expending scarce dollars.3 The USSR's foreign economic relations have added weight by virtue of its dominant position in the Council of Mutual Economic Assistance (CMEA or COMECON), the socialist countries' common market...
...The Soviets generally preferred government, over private trading, and in some countries state sectors of the economy were growing rapidly, becoming significant bases for interest groups favoring expanded links with the USSR...
...6 Soviet commentators had referred to the regime of General Juan Carlos Ongania that seized power in June 1966 as a "reactionary military regime...
...4 3 , 63...
...Most Latin American countries now have a variety of relations with the USSR and many look to Moscow not so much for development models, but for opportunities to enter fresh markets and acquire new sources of industrial goods and development assistance...
...3 5- 36 ; CEPAL, p.35...
...Although the Brazilian military viewed the state as a facilitator of the needs of private capital, it expanded the government's role throughout the economy...
...Commerce Department imposed heavy surcharges on textile imports...
...Latin America Regional Reports: Southern Cone Report (London), August 7, 1986...
...4 3 REPORT ON THE AMERICAS The USSR, vociferous in its condemnation of human rights violations in Chile and to a lesser degree in Uruguay, maneuvered two times in 1977 to block United Nations inquiries into Argentine human rights...
...Koval', and B.T...
...particularly in the early 1980s, after the U.S...
...Paniev, p.13...
...In some respects these relations have had highly positive outcomes for both parties, while in others there have been major and minor difficulties...
...If, however, prices for particular commodities rise during the life of the contract, Latin American countries may incur losses by supplying a customer at below-market prices...
...Ibid., p.67...
...1429-1430...
...Soon after Brazil's 1964 military coup, junta leader Humberto Castelo Branco declared that "relations between the Russian Embassy and the government are normal...
...For Peru, Soviet arms represented an opportunity to build a strong defense capability at prices below those usually charged by Western arms producers...
...Yuri Paniev, "Cooperaci6n cientifica y t6cnica de los pafses del CAME con America Latina," America Latina No.10 (October 1984), pp.12-13...
...See Gerard Fichet, "Tres decenios de relaciones entre America Latina y la Uni6n Sovi6tica," Comercio Exterior Vol.31, no.2 (February 1981), pp.168169...
...Prejudices against CMEA-country equipment are often fostered by powerful right-wing forces opposing any kind of relationship with the USSR and its allies...
...Buenos Aires TELAM, May 29, 1981, in FBIS-LAM, June 1, 1981...
...Students selected under intergovernmental agreements usually are not chosen on the basis of political criteria...
...29 Soviet technicians are involved as well in oil prospecting and various aspects of nonferrous metallurgy...
...In contrast to the Soviets, the Cubans nevertheless frequently published highly critical commentaries on the Argentine regime during this period...
...Vacs, p.74...
...Augusto Varas, "Soviet-Latin American Relations under U.S...
...A similar accord was signed with Bulgaria with a quota of 80,000 metric tons.So With new economic agreements came improved political ties...
...Many are from poor or working class backgrounds and lack the necessary preparation to gain access to universities at home or in the West...
...See Vacs, p.73...
...Arms Control and Disarmament Agency, World Military Expenditures and Arms Transfers 1969-1978 and Idem, ibid., 1985 (Washington, DC: USACDA, 1980 and 1985...
...Three years later they praised Generals Videla and Roberto Viola for their commitment to democratization and "position of independence and good relations with all nations without regard to their political and economic structures and systems...
...But the major transfers occurred after 1976 when Peru received 36 Sukhoi fighter bombers, 12 Mig-21s, helicopters, surface-to-air missiles, an array of other sophisticated equipment and commitments to train Peruvian officers...
...With the exception of Rumania, which in 1976 became a member of the Group of 77,* CMEA members often follow the Soviet lead in foreign economic policy.4 DURING THE 1964 FOUNDING CONFERENCE of the United Nations Conference on Trade and Development (UNCTAD),** Latin delegates pushed to change their characterization as simple suppliers of raw materials to the more developed countries...
...Berrfos (forthcoming...
...cooperation in the nuclear field, with the Soviets sellIt was under the military government (1976-1983), ing five tons of heavy water and other materials to be however~specially following the 1980 U.S...
...Levesque, p.17 9 . 43...
...Similarly, most of what is commonly referred to as Soviet or CMEA "aid" to Latin American countries other than Cuba consists of credit for machinery, equipment or technical services rather than grants of goods or development projects...
...7 Peruvian economic officials in Moscow express enthusiasm about the arrangement, arguing that it is a model for North-South relations worth emulating by other developed countries...
...This nuclear 1982, between 60% and 77% of Argentine grain ex- cooperation with the USSR permitted Argentina to proports went to the Soviet Union-with $3.4 billion in vide technical aid for atomic power programs in Peru the peak year of 1981 alone, equalling 30% of Soviet and Uruguay...
...Yet interest rates, grace periods and repayment schedules offered by CMEA countries are frequently somewhat worse than conditions governing loans from Western developed countries and international lending agencies...
...Turrent (forthcoming...
...Most are in scientific and technical fields such as engineering, and receive full scholarships, stipends, housing and language preparation...
...In 1982, when General Leopoldo Galtieri took on Great Britain by occupying the Malvinas (Falklands) Islands, the USSRwhich is rumored to have provided Argentina with satellite intelligence during the conflict-was able to gain sympathy throughout the continent by declaring its support of Latin America and opposition to Western colonialism.47 FTER ARGENTINA'S DECEMBER 1983 REturn to democracy under President Ratil Alfonsin, the CP claimed that it had made "a tangible and 34 heroic contribution" to "the struggle against the dictatorship...
...One 1979 study suggests that there were four mixed Soviet-Latin American enterprises...
...In 1967, a similar accord with Chile set the percentage at 30%.5 In spite of such agreements, Soviet and CMEA trade with Latin America has generally been quite traditional, with Latin America supplying primary products in return for East bloc industrial goods...
...Fish and fish meal (for animal feed) are the principal Soviet and East European imports from Peru, although there have also been substantial Repot Oe S A er oa*w The Other Super Power purchases of unrefined non-ferrous metals, cotton, sugar and coffee...
...embargo was lifted, the other socialist countries also rose dramatically...
...80 -82 . The U.S...
...Vacs, pp.74-88...
...Together with the Soviets, the Czechs have the defeated Popular Unity government, but it did designed and built generating plants at Lujin de Cuyo, promise to become a possible avenue for maintaining a La Plata, and Giiemez...
...Varas, "Southern Cone," p.254...
...While favoring a peaceful solution, the Soviets tilted toward Argentina, clearly hoping that increased pressure on Chile might trigger splits in the Chilean military that would affect Pinochet's ability to hold onto power...
...20 Czechoslovakia subsequently built or provided equipment for some half-dozen hydro- and thermoelectric generating plants...
...Once again, political compatibility proved less important than basic economic and geopolitical considerations...
...In 1978, the State Department and the U.S...
...A more detailed argument is in Anatolii Shulgovski, "Nacionalismo y fuerzas armadas (d6cadas de los 60 y 70)," in V. Selivanov, El ejercito y la sociedad (Moscow: Academia de Ciencias de la URSS, 1982), pp...
...Other Brazilian purchases from the USSR include steel casting and coal gasification equipment, machine tools and, most recently, a manganese processing plant...
...After the U.S...
...See Anatolii Ol'shanyi, "Sotrudnichestvo s gosudarstvami Latinskoi Ameriki," Ekonomicheskoe Sorrudnichestvo Stran-Chlenov SEV (Moscow) No.3(1985), p.66...
...Through Patricia Derian, assistant secretary of state for human rights, Carter applied strong pressure on the Argentine government in behalf of political prisoners...
...Department of State [DOS], Warsaw Pact Economic Aid to Non-Communist LDCs, 1984 (Washington: DOS, 1986), p. 4 . 9. Author's interviews with Soviet Latin Americanists, Moscow, April 1986...
...Latin America sought out the USSR and its Eastern European allies, desiring political and economic independence from the United Building Soviet hydro-turbines for shipment to Brazil, 1972 JANUARYIFEBRUARY The Other Super Power States, access to new markets and new sources of finance and technology...
...El Comercio (Lima), December 17, 1985 in FBIS-LAM, January 2, 1986...
...7 A S THE USSR'S MOST IMPORTANT REGIONal partners, Brazil, Argentina and Peru are good measures of the extent to which political considerations enter into Soviet trade and aid relations...
...El Expreso (Lima), November 21, 1982 in FBIS-LAM, December 2, 1982...
...Other sectors in which Eastern equipment has proven adequate or better include fishing, transport and road building, and-in some cases-mining and petroleum...
...Latin American Weekly Report October 30, 1986...
...For the USSR, the Peruvian sales provided a lucrative entrance into the Latin American arms market...
...While the USSR has historically been reluctant to join mixed capital projects in Latin America, possibly to avoid arousing sensibilities about foreign direct investment, it has recently indicated interest in such schemes in Argentina and Brazil.7 CMEA countries may provide industrial exports at low prices and easy terms to Latin American customers, in part to gain access to markets and, when possible, to earn hard currency...
...While most are highly appreciative of the opportunity to receive free university training, it is far from clear-as is JANUARYIFEBRUARY RTep 404 the ' Am4aer The Other Super Power sometimes claimed-that Latin American graduates of socialist country universities are uniformly and uncritically pro-Soviet or constitute a potential "fifth column" once they return home.* A former Costa Rican ambassador to Moscow has, for example, remarked that, not all Costa Ricans end up accepting the Soviet version of Communism in spite of the sustained indoctrination that they are subject to...
...Junta statements ritually condemned "subversion" but rarely mentioned "Communism...
...The Eastern bloc has also *A loose coalition which now consists of over 100 developing countries that attempts to act as a pressure group in international trade and tariff negotiations, particularly those involving commodity agreements...
...This is also true of the most developed countries-Argentina, Uruguay, Venezuelawhere opportunities for low-cost university education are more widespread and a Soviet or Eastern European degree is likely to be underrated...
...67 If prices fall, these accords-which often specify prices for the entire contract period-may result in gains for Peru...
...But in an era in which Latin Americans are becoming ever more conscious of the importance of continental unity and independence from the United States, they are unlikely to ask that the other superpower-which shares these concerns, albeit sometimes for different reasons-give up what it considers its rightful place as a major actor on the world scene.U *At press time, it appeared probable that Gorbachev would visit Mexico, Brazil, Argentina, and Uruguay (as well as Cuba...
...The genturbines, generators and related technical services...
...O Globo (Rio de Janeiro), June 21, 1986, in FBIS-LAM, June 24, 1986...
...Politics has taken backstage to the desire to meet domestic consumer demand with Latin products, and sell Soviet goods for much-desired hard currency...
...In 1983, the Argentine exports consisted of agricultural goods, but USSR absorbed 22% of Argentina's exports, including in 1981 Argentina also sold Poland eight grain ships more than 40% of its grain, 3 1 % of its meat, 20% of its worth some $200 million, the largest sale ever made by vegetable oil and 30% of its wool exports...
...Cheap and abundant energy was necessary to sustain the rapid industrial expansion planned by the designers of the "miracle...
...The long geographical distance between Eastern Europe anc Latin America has meant that transportation costs are E significant factor in any exchanges...
...Blasier, Giant's Rival, pp...
...Author's interviews, Moscow, April 1986...
...62 Part of the impetus for the Peruvian military's buildup grew out of the 1975 suspension of U.S...
...press also commonly described Videla as a "reluctant moderate...
...Karen Brutents, "The Conflict in the South Atlantic," in A. Goncharov, et al., The Malvinas (Falklands) Crisis (Moscow: USSR Academy of Sciences, 1984...
...Garcia's critical position regarding the U.S...
...Kondrat'eva and N.E...
...In 1978-1980 Argentina and Chile came close to war over islands in the Beagle Channel...
...Jos6 Andres L6pez, "Relaciones comerciales Argentina-URSS," America Latina No.8 (August 1983), p.58...
...Kudachkin, B.I...
...3. Jorge Zumardn, "El comercio de los pauses latinoamericanos con los del CAME," Comercio Exterior (Mexico) Vol.31, no.12 (December 1981), pp...
...5. L6vesque, p. 140...
...Parani Media (the largest Per6n7s election only weeks after the 1973 coup in in the continent), Bahia Blanca, Costanera and Piedra Chile did not, in Soviet eyes, provide a substitute for del Aguila...
...Each CMEA member establishes its own trade and aid accords with non-CMEA countries and some-such as the USSR, the German Democratic Republic (GDR), Poland and Czechoslovakia-have proven to be more active in Latin America than others...
...The latter-termed the "project of the century''- sought to channel three different rivJANUARY/FEBRUARY 35 ers through a 20 kilometer-long tunnel from the humid eastern slopes of the Andes to the dry Pacific desert...
...CMEA countries coordinate domestic five-year economic plans, attempting to avoid unnecessary duplication of effort and establishing specialization agreements covering various kinds of products...
...Under a number of CMEA-Latin American industrial agreements, the Latin American participant constructs plants, while the CMEA firm provides equipment and technical services...
...It held that the armed forces must wage a permanent, total war against internal enemies-generally defined as foreign-backed or -inspired subversives-in which any means were justified to obtain victory and "sacred" national unity...
...CEPAL, pp.36, 53-56...
...Even the U.S...
...58-60...
...The Soviet media carried no condemnation of the March 1976 coup.3" Both Soviet and Argentine CP analysts considered Videla "a representative of the moderate wing of the armed forces...
...The next most active countries have been Hungary (eight companies), Poland (five), Rumania (three), the GDR (two) and Bulgaria (two...
...Latin American Commodities Report (London), September 4, 1986...
...Political instability has also hampered trade betweer the two regions, since deals made with one administration may not be honored by its successors...
...Soviet Latin America specialists interviewed in 1986 even suggested that Argentina's military government was superior to the Chilean, since there had been four juntas instead of just one and that this was equivalent to "rotation of power, like in a democracy.' 4 IF THE SOVIETS AND THE ARGENTINE COMmunists took great pains to explain away the repressive nature of the military regime, the Argentine military took some surprising measures to reciprocate...
...The Trade-off: The Economic Nexus 1. Buenos Aires TELAM, November 12, 1982, in Foreign Broadcast Information Service (FBIS-LAM), November 15, 1982...
...Miller and Whitehead, p.126...
...Latin America Special Report (London), September 1986...
...CEPAL (p.15) indicates a total of 30 mixed enterprises, rather than 38...
...They were willing to incur large trade deficits to establish a presence in potentially promising markets which were, in most cases, more developed than the rest of the Third World...
...Evanson, p.105...
...Cuba, with special status as a full member of the socialist camp, has been the only Latin American country to benefit from consistent CMEA purchases of its exports at above-market prices...
...2. Valkenier, p.13...
...Evanson, p. 114...
...CidenErgica Nacional.I4 While most Latin American exports are sold to the CMEA at international market prices, long-term contracts offer suppliers an assured market and protection against falling world prices...
...Shortly afterward, General Jos6 Montes toured the USSR and received a number of decorations and a Soviet offer to train Argentine troops in the USSR...
...Even conservative President Fernando Belatinde spoke in much the same vein, declaring, shortly after the accord went into effect in 1985, that "I have to recognize the realistic way the Soviet Union and the socialist nations have seen the situation and helped us make our payments...
...the Argentine maritime industry...
...lshchenko, p.24...
...The Miami Herald, March 27 and 28, 1985...
...The USSR agreed to provide technical assistance and hydraulic equipment for the Capivara generating station on the Paranapanema River...
...Kondrat'eva and Pitovranova, p.91...
...Vacs, pp.98-99...
...One of the best accounts of this period is Vacs, chapters 3 and 4. 37...
...S OVIET-ARGENTINE INTERDEPENDENCE Soviet trade officials have commented that a 10% level led to some peculiar political blindness on both would be ac~eptable..'~ These purchases have consisted sides, particularly-after the March 1976 military coup overwhelmingly of energy-related equipment, such as that deposed the government of Isabel Per6n...
...CEPAL, p.27...
...8 Because prices in centrally planned economies are often artificially determined, East bloc traders have greater flexibility than their Western counterparts in offering concessionary conditions, though such benefits tend to be reserved for particularly friendly states...
Vol. 21 • January 1987 • No. 1
