U.S. clout in Latin America at lowest in decades

QUITO, Ecuador — In a matter of weeks, a Russian naval squadron will arrive in the waters off Latin America for the first time since the Cold War. It is already getting a warm welcome from some in a region where the influence of the United States is in decline.

"The U.S. Fourth Fleet can come to Latin America but a Russian fleet can't?" said Ecuador's president, Rafael Correa. "If you ask me, any country and any fleet that wants can visit us. We're a country of open doors."

The United States remains the strongest outside power in Latin America by most measures, including trade, military cooperation and the sheer size of its embassies. Yet U.S. clout in what it once considered its backyard has sunk to perhaps the lowest point in decades. As Washington, D.C., turned its attention to the Middle East, Latin America swung to the left and other powers moved in.

U.S. financial woes

The United States' financial crisis is not helping. Latin American countries forced by the U.S. to swallow painful austerity measures in the 1980s and 1990s are aghast at the U.S. failure to police its own markets.

"We did our homework — and they didn't, they who've been telling us for three decades what to do," the man who presides over Latin America's largest economy, President Luiz Inácio Lula de Silva, of Brazil, complained bitterly.

Latin America's more than 550 million people now "have every reason to view the U.S. as a banana republic," says analyst Michael Shifter of the Inter-American Dialogue think tank in D.C. "U.S. lectures to Latin Americans about excess greed and lack of accountability have long rung hollow, but today they sound even more ridiculous."

From 2002 through 2007, the U.S. image eroded in all six Latin American countries polled by the Pew organization, especially in Venezuela, Argentina and Bolivia. (The others were Brazil, Peru and Mexico.)

People surveyed in 18 Latin American countries rated President Bush among the least popular leaders in 2007, along with President Hugo Chávez, of Venezuela, and just ahead of basement-bound Fidel Castro, of Cuba, according to the Latinobarometro group of Chile.

In three years of presidential elections ending last year, Latin Americans chose mostly leftist leaders, and only Colombia and El Salvador elected unalloyed pro-U.S. chief executives.

In May, the prestigious U.S. Council on Foreign Relations declared the era of U.S. hegemony in the Americas over. And last month Bolivia and Venezuela both expelled their U.S. ambassadors, accusing them of meddling.

Along with the loss in political standing has come a decline in economic power. U.S. direct investment in Latin America slid from 30 to 20 percent of the total from 1998 to 2007, according to the U.N. Economic Commission on Latin American and the Caribbean.

The U.S. still does $560 billion in trade with Latin America, but in the meantime other countries are muscling in. China's trade with Latin America jumped from $10 billion in 2000 to $102.6 billion last year.

Other countries are also biting into U.S. military sales in the region. Boeing is vying with finalists from France and Sweden for the sale of 36 jet fighters to Brazil. Venezuela's Chávez has committed to buying more than $4 billion in Russian arms, from Sukhoi jet fighters to Kalashnikov assault rifles.

Brazil, Russia agree

In April, Brazil and Russia agreed to jointly design top-line jet fighters and satellite-launch vehicles, and Brazil is getting technology from France to build a submarine.

"Similar deals could have been made with the United States had it been willing to share its technology," said Geraldo Cavagnari, of the University of Campinas near São Paulo.

Last month, Russian Prime Minister Vladimir Putin offered to help Chávez develop nuclear power. Even Colombia, the staunchest U.S. ally in South America, isn't limiting its options. After expressing alarm about the Russian warships a week ago, its defense minister, Juan Manuel Santos, headed for Russia himself to discuss "better relations in defense."

Chávez says he expects to hold joint Russian-Venezuelan naval exercises as early as next month.

Bolivia also is looking to deepen ties with Russia and Iran.

Although the Islamic republic's ambassador has yet to arrive in South America's poorest country, its top diplomat there announced Friday that Iran will open two low-cost public-health clinics.

And while Bolivia's only announced Russian hardware purchase is five helicopters for civil defense, Russia's envoy said — after Bolivia booted the U.S. ambassador — that Russia has every right to help Latin American nations arm themselves.

"We know of many historical cases of U.S. intervention in Latin American countries," said the diplomat, Leonid Golubev.

Thomas Shannon, U.S. assistant secretary of state for the hemisphere, wouldn't comment on whether the U.S. has lost influence in Latin America.

But he added that there is no doubt that the U.S. still holds most of the military power in the Caribbean, and said it has no interest in reviving "Cold War rhetoric." Shannon also noted that overall U.S. aid to the region will reach $2.2 billion for 2009, to total more than $14 billion during Bush's presidency.

However, critics point out that roughly half that aid is for the military or counternarcotics, and that the U.S. sends more money annually to Israel alone.

Chávez's checkbook diplomacy, which easily eclipses U.S. aid between outright gifts and discounted oil, has lured several longtime U.S. friends. Honduras' president, Manuel Zelaya, said last month that after pleading with the U.S. and the World Bank, he accepted $300 million a year from Chávez for agricultural investment to help fight rising food prices.

"Allies, friends, did not help me when I asked," he said.

The diminished profile of the U.S. in Latin America comes after a history of welcomed influence dating back to President Franklin Roosevelt's "Good Neighbor" policy of the 1930s, which emphasized cooperation and trade over military intervention.

There have been major bailouts, such as D.C.'s $20 billion rescue of Mexico in the 1994 peso-devaluation crisis. As former Assistant Secretary of State Otto Reich noted, "We are the assistance bureau of first choice for the region."

But the U.S. has an ugly legacy of covert intervention in countries including Chile, Nicaragua, Guatemala and Cuba.

With the U.S. facing its own financial crisis, it's unlikely to be able to leverage economic influence in Latin America anytime soon.