Sunday, May 02, 2010

Latin America: Iran's Commercial Battlefield

It seems like Iran is taking advantage of the global economic crisis to increased its commercial presence in Latin America, in order to reduce the United States' influence in the region. In 2008, Iran's trade with Latin America was reportedly US$2.9 billion, triple what it was in 2007. Although nominally it may not seem like a lot, the growth rates from 2007 are astonishing. For example:
- Argentina: US$1.2 billion in 2008 (from US$30 million in 2007)
- Ecuador: US$168 million in 2008 (from US$6 million in 2007)
- Venezuela: US$52 million in 2008 (+31% from 2007)
- Cuba: US$50 million in 2008 (+50% from 2007)
(Data: 4/12/09, UPI and 6/4/10, Reuters)

It is public knowledge that Latin American leaders, such as Hugo Chaves in Venezuela and Raul Castro in Cuba, allow Ahmadinejad to step into the region to "liberate" it from the United States' economic and social "imperialistic domination". This is not surprising – we have seen Ahmadinejad and Chaves shake hands on multiple occasions. Just a few weeks ago, Cuba announced increased cooperation with Iran in the fields of biotechnology and sugar, as part of its global commercial diversification plan to overcome its liquidity crisis. (6/4/10, Reuters) Cuba and Venezuela even attended Iran's nuclear conference in April.

What is really surprising (and preoccupying) is the strengthening of economic relations between Iran and some of the more independent and advanced Latin American countries, which also host a large number of Jews. Ahmadinejad's government recently announced that Brazil and Argentina are its two strongest commercial allies in Latin America, respectively. Mohsen Shaterzadeh Yazdi, Iran's ambassador in Brazil, described Latin America as the battlefield in its confrontation with "arrogant powers", obviously referring to the United States. (6/4/10, Prensa Judía)

Simultaneously, Brazil's Chancellor, Celso Amorim, defended Brazil's policy of sustaining economic ties with Iran. He argued that it is still possible to use dialog in order to reach an agreement that will allow the international community to watch Iran's nuclear plans. Amorim also said that the United States' policies will only radicalize Iran and make its people suffer more, since economic sanctions will hurt the poor classes more. (6/4/10, Reuters) Argentina's extremist politician Luis D'Elia (practically Ahmadinejad's lobby envoy in Buenos Aires) regularly holds meetings with government officials in Iran, as well as with Argentinean businesspeople to create commercial partnerships with Iran. He even advocated that Argentina should not only develop multimillion business deals with Iran, but also sign an agreement for nuclear cooperation to enrich uranium. (4/4/10, Infobae)

Just the fact that Latin American countries are expanding their commercial ties with Iran in a time when the developed world is trying to raise sanctions against it, is a red flag in its own. In some cases, these nations simply may be looking for ways to mitigate the effect of the economic crisis on their trade balances. Some others may reflect genuine willingness to have Iran as a partner. What is certain is that, while it is unlikely that Iranian-Latin American trade will make a material shift in the global markets, the region has the potential to fortify Iran's economy. The potential of Latin American's vast natural resources, large population and strategic geographical position is significant, especially if combined with the wrong political alliances.

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