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.
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.
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.
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.