Tag Archives: South America

Peru’s Stance On Megaport Is a Test of China’s Influence

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“Now the National Port Authority is trying to rescind the exclusivity, claiming it made a mistake…The Chinese company, however, remains firm and even hints that it could withdraw if it does not obtain exclusive access.”

China’s megaport in Chancay, Peru, just north of Lima, is set to be inaugurated by Chinese President Xi Jinping later this year during the annual Asia-Pacific Economic Cooperation conference. One of the largest deep-water ports of its kind, Chancay represents one of China’s most ambitious projects in South America. Built by state-owned enterprise Cosco Shipping, Chancay is meant to catalyze the China’s food security and dominance over critical minerals, while cutting shipping times to Asia by around one week. However, according to Argentine media outlet Infobae, Peruvian officials have announced an “administrative error” permitting Cosco Shipping to both build and operate the port exclusively.[i] According to the article, Peruvian regulators have rejected Cosco’s exclusivity, declaring it incompatible with having built the port under domestic law.[ii] As per the second excerpted article from Infobae, Cosco has said it will initiate legal action against Peruvian regulators, insisting on its economic model of exclusivity. The fallout from the Port of Chancay legal wrangling is notable, and likely to have a lasting impact. China sees the moment as precedent-setting for other countries with Chinese state-owned enterprises controlling key infrastructure projects, while Peru finds itself in a major bind after years of burgeoning Chinese influence over strategic sectors in the country. If Cosco manages to win exclusive control of Chancay, China will further solidify its control over strategic infrastructure in the Western Hemisphere; if Peru manages to safeguard its autonomy, it may furnish a blueprint for other regional powers willing to test the limits of China’s infrastructure ownership models.

Sources:

Source: “El ‘error administrativo’ que pone en jaque al Perú: dio el control total a China del Megapuerto de Chancay (The ‘administrative error’ that puts Peru in check: it gave China full control of the Chancay Megaport),” Infobae (an Argentine outlet with excellent regional coverage), 14 May 2024. https://www.infobae.com/peru/2024/05/14/el-error-administrativo-que-pone-en-jaque-al-peru-dio-el-control-total-a-china-del-megapuerto-de-chancay/  

With a projected investment of more than three billion, China is now bringing out its true intentions and at the same time taking advantage of an ‘administrative error’ on the part of Peruvian officials by granting operational exclusivity to Cosco, which has put the project in check…a situation that the National Port Authority of Peru is currently trying to solve…The Peruvian government assumed that the Chinese shipping giant would simply use the port of which it will be the majority owner and would not have exclusive rights over it. But during the negotiations, Cosco somehow obtained precisely these rights. Now the National Port Authority is trying to rescind the exclusivity, claiming it made a mistake…The Chinese company, however, remains firm and even hints that it could withdraw if it does not obtain exclusive access.

Source: “Megapuerto de Chancay: Cosco Shipping no da su brazo a torcer y anuncia sus acciones legales por conflicto con el Estado peruano (Chancay Megaport: Cosco Shipping does not give in and announces its legal actions due to conflict with the Peruvian State),” Infobae (an Argentine outlet with excellent regional coverage), 8 May 2024. https://www.infobae.com/peru/2024/05/07/megapuerto-de-chancay-consorcio-chino-no-dara-su-brazo-a-torcer-y-anuncia-sus-acciones-legales-por-conflicto-con-el-estado-peruano/  Through a statement, the Chinese consortium Cosco Shipping Ports Chancay Peru SA, in charge of the megaproject, recognized that the port infrastructure work in the country has been ‘seriously harmed’ by a change in the regulatory scheme…the company reported that they have found it necessary to initiate legal actions to defend its operating model and ensure its classification as private infrastructure, despite the public benefits it offers.

Notes:

[i] At an earlier period, U.S. officials warned Peru about China exerting control and exclusivity over Chancay. See: Michael Stott and Joe Daniels, “U.S. Raises Concern with Peru over Chinese Control of Infrastructure,” Financial Times, 3 October 2023. https://www.ft.com/content/2c77be69-60d7-4d5c-a0c6-c7978bde3888

[ii] According to noted analyst Elisabeth Braw, this situation is likely the result of Peru failing to read the fine print of the agreement. See: Elisabeth Braw, “Peru Learns to Read the Fine Print in China Deals,” Foreign Policy, 13 May 2024. https://foreignpolicy.com/2024/05/13/peru-learns-to-read-the-fine-print-in-china-deals/

Chinese Spy Balloon Over Latin America Elicits Minimal Response

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Chinese surveillance balloon hovers over the Americas.

Chinese surveillance balloon hovers over the Americas.

“The Colombian Air Force said that the balloon did not present a threat to national security and defense and that it launched investigations to establish the origin of the object… Costa Rica also did not report threats to its national security.”

In February 2023, a Chinese surveillance balloon that traversed North American airspace captured the attention of policymakers and civil society in the United States and Canada for more than a week. In contrast, a similar balloon floating simultaneously over Latin America hardly garnered attention.[i] According to Spanish-language CNN Español, around the same time, a Chinese balloon passed over Costa Rica and Venezuela, ultimately hovering over Colombia’s northern region for some time. Regional coverage of the balloon over Latin America generally refers to the “balloon” without mentioning its capacity to conduct surveillance operations. According to reports in one of Colombia’s most important news dailies, El Tiempo, the Colombian air force discussed options to defend its airspace. In the end, however, Latin American leaders opted to observe the balloon’s passage rather than take action.The muted response from regional leaders is telling of their desire to remain out of the fray in an international order that they recognize is increasingly contested by China’s rise. It also comes months before important planned visits to China by the presidents of Colombia and Costa Rica, both of which are seeking development assistance.

Sources: 

“Lo que sabemos sobre el globo chino que sobrevoló Colombia y Costa Rica (What we know about the Chinese balloon that flew over Colombia and Costa Rica),” CNN Español (Spanish-language version of the popular U.S. news outlet), 7 February 2023. https://cnnespanol.cnn.com/2023/02/07/globo-chino-colombia-costa-rica-orix/

A spokeswoman for the Chinese Ministry of Foreign Affairs admitted for the first time that a balloon seen over the skies of Latin America belongs to the country… Two Latin American countries reported that they saw a balloon transit in their skies. One of them was Colombia, whose Air Force reported that its National Air Defense System “detected an object above 55,000 feet, which entered Colombian airspace in the northern sector of the country.”…The Air Force said that the balloon did not present a threat to national security and defense and that it launched investigations to establish the origin of the object… Costa Rica also did not report threats to its national security.

“Globo espía chino: Colombia podría derribar objeto que entró al espacio aéreo? (Chinese spy balloon: Could Colombia shoot down an object that entered its airspace?),” El Tiempo (one of Colombia’s most important dailies), 7 February 2023. https://www.eltiempo.com/justicia/conflicto-y-narcotrafico/globo-espia-chino-colombia-podria-derribarlo-si-entro-al-espacio-aereo-739897  Colombia is another country where an object “similar to a balloon” passed into its airspace in recent days. According to the Colombian Air Force, it will react by constant monitoring of its airspace and looking to guard its national interest…While a range of potential responses was discussed, the balloon passed from the country’s airspace without representing “a threat to security and national defense” according to the Colombian Air Force.

Notes:

[i] For more information on the differences in regional coverage of the Chinese balloon over Latin America, see: Margaret Myers, “‘O Globo Chino’ Floats Over Latin America,” Wilson Center, February 10, 2023. https://www.wilsoncenter.org/blog-post/globo-chino-floats-over-latin-america

Image Information:

Image: A Chinese surveillance balloon hovers over the Americas.
Source: https://commons.wikimedia.org/wiki/File:Balloon_over_MYR.jpg
Attribution: CC BY-SA 4.0

Colombia Deemphasizing Coca Eradication in Counterdrug Strategy

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An aerial eradication operation conducted by helicopter.

An aerial eradication operation conducted by helicopter.

“The government of Gustavo Petro is taking increasingly decisive steps to achieve the reversal in the drug policy that the president of Colombia proposed on the campaign trail.”

Colombia’s President Gustavo Petro campaigned on a platform of changing the country’s policies toward illicit drugs,[i] and he is making good on that promise. According to Spain’s largest daily, El País, which has excellent coverage of Latin America,the Petro government has announced plans to reduce counterdrug strategic efforts aimed at forced eradication of coca. Previously, these efforts constituted some of the country’s main strategies to curb coca, the raw ingredient in cocaine. Instead, Petro plans to pursue drug traffickers, especially those who do not participate in the ongoing peace negotiations. As an outcome, an end to forced eradication means a far less ambitious effort to reduce the number of hectares under coca cultivation. In the second article, U.S.-funded Spanish language news service Voz de América reports that Colombia now aims to reduce a mere 20,000 hectares under coca cultivation, compared to 50,000 hectares, which was its goal in 2022. Petro’s predecessor, President Ivan Duque, eradicated 130,000 hectares of coca cultivation in 2020. Of note, since assuming office, Petro has also reversed course on fighting guerrilla groups and sought a broad truce with criminal organizations in a plan he calls “Total Peace.”[ii] Bridging the two concerns, the new, less ambitious coca eradication efforts will probably drive instability in Colombia and encourage criminal groups to control more territory to plant coca. Indeed, one outcome of this new counterdrug plan is that it has the potential to undercut Petro’s attempt to bring about “Total Peace” in the country.

Sources: 

“El vuelco de Petro en la política de drogas empieza por reducir la erradicación forzada de coca (Petro’s turnaround in drug policy begins by reducing the forced eradication of coca),” El País (Spain’s largest daily with excellent coverage of Latin America), 12 January 2023. https://elpais.com/america-colombia/2023-01-12/el-vuelco-de-petro-en-la-politica-de-drogas-empieza-por-reducir-la-erradicacion-forzada-de-coca.html   

The government of Gustavo Petro is taking increasingly decisive steps to achieve the reversal in the drug policy that the president of Colombia proposed on the campaign trail. After having prepared the ground to bury once and for all the aerial spraying with glyphosate against coca crops, this week the National Police set its goal of eradicating illicit crops in 2023 at 20,000 hectares, a notable reduction of 60% with respect to the 50,000 that was proposed for 2022… At the end of 2021, the total area shot up from 143,000 to 204,000 hectares under cultivation, according to the latest annual report of the United Nations Integrated System for Monitoring Illicit Crops (Simci), the official measurement. Cocaine hydrochloride production potential reached 1,400 tons. Both are the highest figures since records were kept.

“Colombia anuncia reducción en su meta de erradicación de cultivos ilícitos (Colombia announces reduction in its goal of eradication of illicit crops),” Voz de América (the Spanish-language version of the state-owned network), 20 January 2023. https://www.vozdeamerica.com/a/colombia-anuncia-reduccion-meta-erradicacion-cultivos-ilicitos-/6927613.html Colombia reduced its goal of eradicating illicit crops to 20,000 hectares in 2023, a total of 30,000 fewer hectares compared to last year’s figure, which was set at 50,000… President Gustavo Petro has described the current anti-drug policy, which has been implemented since by previous governments, as a failure, and recently at the World Economic Forum in Davos, Switzerland, once again assured that this is a failed policy – the main factor in the generation of violence in Colombia.

Notes:

[i] For more background on Petro’s campaign and his policy shift on illicit drugs, see: Ryan Berg, “Colombia’s Gustavo Petro Promises New Approach to Security and Drugs,” OE Watch, 10-2022. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-2-singular-format/428038; Missy Ryan, “In Test of Ties with U.S., Colombian Leader Proposes Shift on Drugs,” Washington Post, 27 September 2022. https://www.washingtonpost.com/national-security/2022/09/27/united-states-colombia-drugs/

[ii] For more information on Petro’s views on guerrilla groups and Colombia’s security challenges more generally, see: Ryan Berg, “Colombia’s Congress Authorizes “Total Peace” Negotiation With Guerrilla and Criminal Groups,” OE Watch, 1-2023. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-2-singular-format/434199; Ryan Berg, “Colombia’s Leftist President Seeks To Resume Negotiations With National Liberation Army,” OE Watch, 9-2022. https://community.apan.org/wg/tradoc-g2/fmso/m/oe-watch-articles-2-singular-format/425694; Christina Noriega, “Colombia’s Radical New Approach to Cocaine,” Foreign Policy, 30 October 2022. https://foreignpolicy.com/2022/10/30/colombia-cocaine-coca-industry-policy-war-drugs-gustavo-petro/

Image Information:

Image:  An aerial eradication operation conducted by helicopter.
Source:  https://www.flickr.com/photos/umpquawild/28702214956
Attribution: CC BY-NC 2.0


China Deepening Cooperation in Latin America’s Sizeable Lithium Sector 

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Lithium mines in Jujuy Province, Argentina.

Lithium mines in Jujuy Province, Argentina.

“China’s consumption of lithium accounted for 65 percent in the global lithium market, driven partly by the fast-developing new-energy vehicle sector and the energy storage industry, along with the country’s carbon emissions reduction goals.”

The price of lithium, a key ingredient in battery technology, has skyrocketed amid the rush for critical minerals. Lithium can be found in abundance throughout South America’s so-called “Lithium Triangle,” which comprises Argentina, Bolivia, and Chile and contains approximately 55 percent of the world’s known lithium deposits.[i]  Mexico also has known lithium deposits. Collectively, Latin America’s lithium reserves has attracted global attention, especially from China. According to the first excerpted article from China’s state-run Global Times, Chile’s Consul General in Chengdu vowed to increase the country’s cooperation with China to stabilize the global supply and price of lithium. In Mexico’s case, President Andrés Manuel López Obrador has sought to nationalize the metal known as “white gold.” According to the second excerpted article from privately held popular media outlet Radio Formúla, a new state company called Lithium for Mexico will control the metal in Mexico, demanding foreign partners to enter joint ventures and junior partnerships. The article reports that only one company has received a unique exception to this rule—China’s Ganfeng Lithium. Mexico’s government justifies this exception on the basis that Ganfeng had an existing agreement to control lithium at the Bacanora site before the mineral’s nationalization. These developments demonstrate China’s advances in Latin America with respect to its critical minerals strategy, as well as the success of its economic diplomacy in achieving carveouts for its companies.

Sources: 

“Chile vows to enhance cooperation with China in lithium sector,” Global Times (state-owned media outlet under the auspices of the People’s Daily), 9 November 2022. https://www.globaltimes.cn/page/202211/1279134.shtml  

Chile’s consul general in Chengdu…Gustavo Díaz Hidalgo, on Wednesday vowed to further enhance cooperation with China in the lithium sector, in a bid to stabilize the global supply of the vital mineral for making batteries…Díaz predicted that the global demand for lithium each year would surpass 1 million tons by 2025, crossing 2.5 million tons by 2030.
 
The consul general said that China’s consumption of lithium accounted for 65 percent in the global lithium market, driven partly by the fast-developing new-energy vehicle sector and the energy storage industry, along with the country’s carbon emissions reduction goals.

“Litio para México: Empresa estatal lo explotará en exclusiva…salvo una excepción china (Lithium for Mexico: State company will exploit it exclusively…with one Chinese exception),” Radio Formúla (a popular outlet owned by the large media conglomerate Grupo Formúla), 24 August 2022. https://www.radioformula.com.mx/economia/2022/8/24/litio-para-mexico-empresa-estatal-lo-explotara-en-exclusiva-salvo-una-excepcion-china-728919.html

The Secretary of Energy, Rocío Nahle, explained that the current concession for exploration and exploitation of lithium at the hands of a private company will be maintained… Although concessions will no longer be granted to explore and exploit the mineral…the only one in force for exploitation before the reform to the Mining Law, in the hands of an Asian company, will remain in force.

Notes:

[i] For more information on U.S. opportunities in the Lithium Triangle and how the United States might effectively compete, see: Ryan C. Berg and T. Andrew Sady-Kennedy, “South America’s Lithium Triangle: Opportunities for the Biden administration,” 17 August 2021. https://www.csis.org/analysis/south-americas-lithium-triangle-opportunities-biden-administration

Image Information:

Image:  Lithium mines in Jujuy Province, Argentina.
Source: https://www.flickr.com/photos/earthworks/47617675391
Attribution: CC BY-NC 2.0

Indonesia Extends Counter-Drug Trafficking Cooperation to South America

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National Narcotics Agency (BNN) logo.

National Narcotics Agency (BNN) logo.

“I have just carried out a working visit as Chair of the Indonesian Delegation to several countries in South America in order to anticipate the entry of cocaine and other trafficked narcotics into Indonesia…”

According to the excerpted article from centrist Indonesian-language website tvonenews.com, Indonesia’s National Narcotics Agency (BNN) is now cooperating with South American countries to prevent the entry of cocaine and other narcotics into Indonesia.  In the article, BNN head Petrus Golose discusses his recent working visit to South America.  Although he notes that narcotics trafficking in South America has not yet directly affected Indonesia, it is necessary to address because Indonesia has seen an increase in domestic drug use and could become a destination country for illicit South American drugs.

The Indonesian Foreign Ministry’s website, kemlu.co.id, discusses the BNN delegation’s visit to Panama in particular.  Indonesia is concerned about Panama’s role as a drug trafficking hub, albeit not a producer.  Indonesia intends to share best practices with Panama in terms of law enforcement strategies to counter drug trafficking.  A memorandum of understanding between the two countries was signed, marking the first time Panama has ever cooperated with an Asian country to combat drug trafficking.

Indonesian-language media outlet databoks.com reports that there had been a surge in narcotics arrests in Indonesia, peaking in 2018, and decreasing since then.  According to the data, North Sumatra is the most affected region.  Marijuana is the most seized drug followed by methamphetamine and ecstasy.  Given that cocaine dominates narcotics trafficking from South America, these facts indicate that Indonesian counter-narcotics initiatives with South American countries is a longer-term preventative measure.

Source:

“BNN Jalin Kerja Sama dengan Negara-Negara di Amerika Selatan Cegah Masuknya Kokain dan Peredaran Narkotika Lain (BNN Cooperates with Countries in South America to Prevent the Entry of Cocaine and Other Narcotics from Circulating),” tvonenews.com (considered neutral Indonesian language media source), 9 June 2022. https://www.tvonenews.com/berita/nasional/45935-bnn-jalin-kerja-sama-dengan-negara-negara-di-amerika-selatan-cegah-masuknya-kokain-dan-peredaran-narkotika-lain

Head of the National Narcotics Agency of the Republic of Indonesia (BNN RI) Petrus Reinhard Golose said that his team was cooperating with a number of countries in South America to prevent the entry of cocaine and other trafficked narcotics into Indonesia. Golose explained that the cooperation that BNN has established with countries in South America targets areas around the Andes Mountains. The head of the NNA confirmed that although the circulation of cocaine took place in the Americas, it was possible for Indonesia to become one of the destination countries for the circulation.

Source: “Panama – Indonesia untuk Pertama Kalinya akan Melakukan Kerja Sama Penanggulangan Narkoba (Panama – Indonesia for the First Time to Conduct Drug Countermeasures Cooperation), kemlu.go.id (website of the Indonesian Ministry of Foreign Affairs), 25 May 2022. https://kemlu.go.id/portal/id/read/3631/berita/panama-indonesia-untuk-pertama-kalinya-akan-melakukan-kerja-sama-penanggulangan-narkoba

With the support of the Indonesian Embassy in Panama City, the Head of the National Narcotics Agency and his team held a meeting with ministerial-level officials…. Panama itself is not a drug-producing country, but is a hub area for drug dealers in Latin America who come from surrounding drug-producing countries…. In this case, Panama and Indonesia can share experiences both in handling and tackling the use and distribution of drugs, as well as proper law enforcement techniques for dealing with drug issues.

Source: “Jumlah Tersangka Narkoba Menurun dalam 3 Tahun Terakhir (Number of Drug Suspects Decreased in the Last 3 Years),” databoks.katadata.co.ide (web-based Indonesian language media outlet), 29 May 2022. https://databoks.katadata.co.id/datapublish/2022/05/26/jumlah-tersangka-narkoba-menurun-dalam-3-tahun-terakhir

According to a report by the National Narcotics Agency (BNN), the number of suspects in narcotics and illegal drugs or narcotics cases in Indonesia has decreased over the past three years. However, if one looks at the trend, since 2009 the number of narcotics suspects has tended to increase, with a record high of 1,545 people in 2018.

Image Information:

Image: National Narcotics Agency (BNN) logo
Source: Kampung Jawa, https://commons.wikimedia.org/wiki/File:Logo_BNN.svg
Attribution: CC x 2.0