Brazil Finds Benefits and Drawbacks in
the Rio de la Plata Basin
The balance of power has shifted in the
competition between Brazil and Argentina in the Rio de la Plata
Basin, which includes the smaller buffer states of Paraguay, Uruguay
and Bolivia. Argentina has weakened economically and politically
while Brazil has risen in prominence, increasing Brasilia's relative
strength in the region. Brazil has built up levers of influence
across numerous strategic sectors in these countries, though it still
faces many challenges and constraints — some even self-imposed —
in assuming a true regional power role.
Brazil is geographically isolated from
much of the world, but it has been an active player in the regional
geopolitics of South America's Southern Cone ever since it achieved
independence from Portugal nearly two centuries ago. It is
particularly active in the Rio de la Plata Basin, a temperate and
fertile area and one of the most expansive river basins in the world,
comprising parts of Bolivia, Brazil, Paraguay, Uruguay and Argentina.
The rich agricultural lands, river systems, strategic port access and
lack of significant geographical barriers has historically led to
competition and, at certain points, conflict between these countries.
The Triple Alliance War of 1865-1870
epitomized this competition. In that war, in which Paraguay attempted
to seize control over the Parana and Rio de la Plata riverine
transport networks, Paraguay lost half of its territory and most of
its male population. The war reinforced the position of Paraguay,
Uruguay and (to a lesser extent) Bolivia as buffer states between the
much bigger, more populous and more powerful Brazil and Argentina.
Subsequently, the two countries developed dynamic and industrialized
economies during the 20th century.
Over the same period, Brazil and
Argentina competed for influence over the smaller states in the Rio
de la Plata Basin to ensure protection against each other and to
establish economic and commercial ties to supply their industrial
bases and economic supply chains. However, the economic and political
weakening of Argentina and the consolidation and rise of Brazil over
the past two decades has changed the balance of power, to the point
that Brazil has strengthened its position relative to Argentina in
each of the buffer states to a significant degree.
Levers of Influence
The influence Brazil wields in the
buffer states of the Rio de la Plata Basin varies by type and
intensity. However, Brasilia emphasizes common sectors and areas in
Paraguay, Uruguay and Bolivia. These include migrant and population
flows, control of agribusiness and landownership, energy production,
financial and banking relationships, and security ties.
Paraguay
Land ownership and agricultural
production are major levers for Brazil in Paraguay. Brazilian farmers
began to have a presence in the Paraguayan countryside in the 1960s,
as Brazilians (known, sometimes with a derogatory connotation, as
Brasiguayos) started to cross the border, buy relatively cheap land
and cultivate soy or raise cattle. Ironically, it was the Paraguayan
government that created a campaign to attract settlers to the country
to fill up space with people.
Brazil also has strategic leverage over
energy ties via the Itaipu Dam, which opened in 1984 on the border
between Paraguay and Brazil. It is one of the largest hydroelectric
projects in the world and provides 90 percent of its electricity
output of 14,000 megawatts to Brazil, making up 14 percent of the
country's overall electricity consumption. Much of the dam is in
Paraguayan territory and Brazil has military units and plans to be
able to "invade" and "protect" the dam if the
need arises. Brazil has also moved some of its manufacturing
operations into Paraguay. Electricity and labor in Paraguay are
cheaper compared to most places in Brazil, causing companies (both
Brazilian and those from elsewhere that used to operate in Brazil,
such as car parts producers) to consider relocating to Paraguay.
On security matters, Brazil regularly
holds joint exercises and training with the Paraguayan military. On
Jan. 6, the Brazilian air force trained Paraguayan pilots in the
Brazilian state of Minas Gerais. The training mainly involved the
maintenance of the T-27 Tucano aircraft, which the Paraguayan air
force uses in anti-drug trafficking missions. Senad, Paraguay's
National Anti-Drug Secretariat, has also highlighted Brazil's
contributions to fighting drug trafficking in Paraguay.
Uruguay
Brazil's influence in Uruguay is
predominantly in the control of agribusiness and land ownership.
During the 1990s, there was significant land acquisition in Uruguay
by property owners in Brazil, as land prices there were significantly
cheaper. However, the Uruguayan government is now looking to put
limits on foreign ownership of land. The move does not appear to be
retroactive and would not significantly affect Brazilians' land
ownership, but it would prevent foreign ownership from increasing in
the future.
The border between Brazil and Uruguay
is also integrated. In some border cities such as Rivera-Santana do
Livramento, the border is virtually non-existent. Rather, a monument
"separates" both countries in a plaza shared by both
cities. Brazil and Uruguay even agreed to give dual citizenship for
people who were born on the border.
Brazil and Uruguay cooperate in
security and military matters as well. The two countries signed a
general defense cooperation agreement in 2010, which includes
incentives for purchases of goods and services related to the defense
sector. There is also cross-border cooperation between police
services and intelligence sharing on criminal matters. Finally, both
militaries share training, joint exercises and bilateral exchanges
for officer training courses, including the maintenance and training
of pilots and technicians for Brazilian-made helicopters in Uruguay.
Bolivia
The country shares a long border with
Brazil, similar to the features of the borderlands with both Paraguay
and Uruguay. Indeed, Brazil purchased the state of Acre from Bolivia
for its rubber-harvesting potential as part of the 1903 Petropolis
Treaty. In terms of agriculture, Brazil controls much of Bolivia's
soybean production, and most Bolivian foodstuffs are now sold to or
through Brazil to outside markets.
On energy and infrastructure, Brazil is
now Bolivia's main export market for natural gas following the
construction of the 3,150-kilometer (1,960-mile) pipeline that
connects Santa Cruz de la Sierra in Bolivia with Canoas in southern
Brazil. In 2013, Brazil signed an agreement with Bolivia and Peru to
build an inter-oceanic railway to stimulate export and import
activity between the three countries. Starting in the Peruvian city
of Ilo on the Pacific coast, the railway will measure 1,200
kilometers (745 miles), running through the major regions of Bulo
Bulo and Montero and connecting to the Bolivian city of Puerto Suarez
and to Brazil's Atlantic coast.
On security matters, the two countries
signed a defense cooperation agreement in 2012. This agreement
includes assistance in sergeants' training courses, technical
assistance on air traffic integration, air force cadet training and
some helicopter donations.
Constraints and Challenges
While Brazil has significant influence
in strategic sectors within these buffer states, it faces many
difficulties in these countries as well. First, there is the language
difference and the broader identity barrier established from
different styles of colonization and development between
Portuguese-speaking Brazil and the rest of the region, which speaks
Spanish. Second, these countries do not want to be dominated by
Brazil and have instead looked to balance cooperation with external
powers for their own benefit. Traditionally, this cooperation has
been with Argentina, but with Buenos Aires offering less, the
countries have expanded cooperation with countries such as China.
In addition, Brazil's levers in these
countries have often created friction in bilateral relations. Such
friction includes clashes between Brasiguayos and landless farmers in
Paraguay; contraband, narcotics and legal issues over grain origin in
some of the border areas; and the suspension of Brazilian-financed
road construction in Bolivia because of protests among local
indigenous groups. In response, Brazil has not made a conscious
decision to assume a regional power role, as it prefers to avoid the
"imperialist" label, as well as the drawbacks and
entangling responsibilities that come with dominance.
There is also the issue of Mercosur, a
trade bloc between Brazil, Argentina, Uruguay and Paraguay (and, more
recently, Venezuela). Mercosur was established in 1991 essentially as
an agreement to economically institutionalize a balance of power in
the Southern Cone between Brazil and Argentina with the buffer states
in the middle. However, there have been constant disagreements on
policies and exceptions made to general rules that have weakened the
effectiveness of the bloc. The temporary expulsion of Paraguay
following former President Fernando Lugo's impeachment in 2012 and
the inclusion of Venezuela exemplify this discord.
Furthermore, Argentina's weakening
financial position and imposition of trade restrictions has made the
common market insufficient. Since the entire bloc must approve trade
agreements made between member countries and outside partners, such
restrictions hamper Mercosur's effectiveness. Subsequently, Brazil,
Uruguay and Paraguay have begun to reassess their position in the
bloc and to look at trade and economic opportunities elsewhere in
Latin America, the European Union and the United States. Still,
Mercosur countries are an important market for Brazil, accounting for
more than 10 percent of total exports. Brasilia would prefer to keep
the grouping intact, making a weakening of Mercosur both a potential
loss and an opportunity for Brazil.
Brazil also has to cope with its own
economic slowdown, which could weaken its ability to invest and
project power in the periphery, at least in the near term. Brazil has
shifted its focus to look outside of the immediate region for major
economic deals and investment opportunities, which Argentina and the
other Mercosur states are unable to provide. But the Rio de la Plata
Basin will remain important to Brazil and will continue to drive its
strategy in projecting influence in the region.
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