British Foreign Secretary, Jeremy Hunt warns Myanmar’s Suu Kyi ‘no hiding place’ for Rohingyas’ attackers

Aston Martin sets £5.07bn IPO valuation

Rothesay leads race for £900m state-owned equity release loans

Barclays digital banking services back up after ‘technical hitch’

EU airports unable to cope with safety risks of ‘no-deal’ Brexit, leaked memo reveals

 

China retaliates with $60bn tariffs in Trump trade war escalation

Equifax fined £500,000 for failing to protect customer details in cyber attack

FINANCE TOP STORIES

Russia: Playing a Geopolitical Game in Latin America

Souring attitudes toward the United States throughout Latin America have opened opportunities for Moscow to stoke anti-U.S. sentiment and advance its own interests.

INTRODUCTION

Russia is working to expand its presence in Latin America, largely at Washington’s expense, and 2018 presents it with many opportunities to do so. Five Latin American countries—Cuba, Venezuela, Colombia, Mexico, and Brazil—are going through political transitions this year with multiple openings for Russia to meddle. Souring attitudes toward the United States throughout the region over trade and immigration issues, the rise of populist candidates, and the deepening internal economic and social challenges facing many Latin American countries create favorable circumstances for Russia to advance its interests.

Capitalizing on opportunities to gain a foothold in Latin America is a familiar strategy for Russia. As White House Chief of Staff John Kelly testified before the Senate Armed Services Committee in March 2015 in his capacity as head of the U.S. Southern Command, the arm of the U.S. military responsible for operations in Central and South America:

Periodically since 2008, Russia has pursued an increased presence in Latin America through propaganda, military arms and equipment sales, counterdrug agreements, and trade. Under President [Vladimir] Putin, however, we have seen a clear return to Cold War-tactics. As part of its global strategy, Russia is using power projection in an attempt to erode U.S. leadership and challenge U.S. influence in the Western Hemisphere.

Putin will want to be well positioned to spotlight his Latin American ties for the upcoming G20 summit, scheduled for November 30–December 1 in Buenos Aires, Argentina—the first of these to be hosted in South America. For Moscow, this event will be one way to push back against the outcry and diplomatic isolation from Western governments after the March 2018 poisoning of former Russian spy Sergei Skripal in the United Kingdom and the April 2018 chemical weapons attack in Syria. Putin is likely to tout his relationships with Latin American leaders—such as the strategic partnership agreement he signed earlier this year with Argentinian President Mauricio Macri—to avoid a repeat of the chilly reception that he received at the 2014 G20 summit in Australia after Russia’s illegal annexation of Crimea.

RUSSIAN FOREIGN POLICY UNDER PUTIN

For much of the post–Cold War era, the United States and Europe paid little attention to Russia’s efforts to expand its political, economic, and military influence abroad. The Soviet Union’s dissolution, Russia’s internal challenges, and Moscow’s stated desire for integration with the West sharply constrained the Kremlin’s interest and capacity to project its influence on a global scale and diminished the West’s interest in Russia’s foreign policy and global activities. The West saw these efforts as primarily confined to Russia’s immediate neighborhood and largely ineffective elsewhere.

However, since Vladimir Putin’s return to the presidency in 2012, Russia has engaged in a broad and surprisingly effective campaign to expand its global reach. His reelection in March 2018 is likely to see this campaign continue. To advance Russian objectives, Moscow has relied on a wide array of diplomatic, military, intelligence, cyber, trade, energy, and financial tools to influence political systems, public attitudes, and elite decisionmakers in Europe, the Middle East, Africa, Asia, and Latin America. These objectives—as outlined in the 2017 Carnegie paper “The Return of Global Russia: An Analytical Framework”—include, primarily, undermining the U.S.-led liberal international order and the West’s cohesion; enhancing Putin’s domestic legitimacy by demonstrating Russia’s status as a global power; and promoting specific Russian commercial, military, and energy interests.1

Russian activity in Latin America has not received nearly the same attention as Russian meddling in the former Soviet space, Europe, or the United States, where its impact is far more visible and wide-ranging. Yet Moscow may view its gains in Central and South America as payback for what it has viewed as U.S. interference in Russia’s backyard. How effectively can Moscow expand its fairly limited standing in the region beyond long-standing ties with Cuba, Nicaragua, and Venezuela? Can it significantly complicate U.S. relationships with partners such as Mexico, Colombia, Brazil, and Argentina? Will it be able to degrade the United States’ image and reputation in the region? For the United States, Russia’s increasing presence in the Western Hemisphere is an unwelcome factor that can further roil relations with its southern neighbors and could present new military and security threats.

Russia is active in Latin America primarily through arms sales, commercial agreements, and high-level political outreach. While these activities are driven largely by financial incentives, Putin’s motivation to boost Russia’s profile is also firmly rooted in geopolitics. Moscow has looked to develop partnerships with countries that share an interest in creating institutions and relationships that are not dominated by the United States or Europe. It has cultivated a relationship with Brazil through the BRICS (Brazil, Russia, India, China, and South Africa) group, for example. Moscow has also sought to deepen ties with allies that share the Kremlin’s increasingly authoritarian approach to governance and resentment of U.S. global leadership, such as Nicaraguan President Daniel Ortega, Venezuelan President Nicolás Maduro, and Bolivian President Evo Morales.

More recently, Moscow’s efforts have sought to take advantage of U.S. policy shifts that have created tensions in some countries’ relations with the United States. U.S. President Donald Trump’s administration has sharply criticized Mexico’s stance on NAFTA and has called for a crackdown on immigration from Latin America. The administration threatened the Maduro government with military force in 2017 and has imposed increasingly severe financial sanctions to encourage a political deal between the Venezuelan regime and its opponents. Moscow appears poised to capitalize on these tensions in 2018 and to manipulate the environment to its advantage. 

RUSSIA’S AGENDA

As Russia looks to take advantage of opportunities in Latin America, it will remain focused on three key areas of interest: alliances, trade, and security.

Alliances and Relationships

Russia is looking to develop a presence in all corners of the globe to solidify its image as a world power. It also seeks to build relationships and create institutions that further its aim of creating a multipolar world. Moscow has almost certainly taken note of the many Central and South American nations that have sought to assert their foreign policy independence and have not consistently aligned themselves with the United States. For example, the Rio Group denounced the 1999 NATO bombing of Yugoslavia.2 In 2003, Chile and Mexico indicated they would vote against the draft UN resolution for military action in Iraq. In 2014, Bolivia, Cuba, Nicaragua, and Venezuela voted against the resolution condemning Russia’s action in Crimea. This year, less than half of member heads of state attended the Summit of the Americas in Lima, Peru. Such a decline in enthusiasm for an event that has long been an opportunity for the United States to showcase its leadership among American nations probably provides further incentive for Moscow to continue building bridges with the region.

Trade and Investment

Starting from a very low base, Russia stands to gain economically by expanding its trade and investment relationships in the region, particularly in the face of U.S. and European sanctions. Although total trade between Russia and the Latin American and Caribbean region was only $12 billion in 2016, it has increased by 44 percent since 2006, with Brazil and Mexico representing about 50 percent of all Russian trade with the region. During this period, Russian firms have made significant investments in the oil and gas sector in countries such as Bolivia, Mexico, and Venezuela. The broader economic relationship with Latin America remains subdued due to Russia’s overall economic decline.

Military Power Projection

Moscow probably calculates that close relations—whether built around arms sales, trade or energy deals, or similar political views—will translate into physical access for Russian military and security activities. Access to ports and airfields enables Moscow to deploy military assets to the region, projecting its power and messaging the United States. After the Georgian war in August 2008, for example, Russia sent ships on port visits to the Caribbean and Venezuela and flew bombers on long-range patrols. Although Moscow claimed these exercises had been long planned, they were well timed to message its displeasure with Washington’s support for the Georgian government, which had included sending U.S. ships to the Black Sea. Amid worsening tensions with the United States, Russia has opened facilities in Nicaragua ostensibly for counternarcotics-related activities, and Russian officials have spoken periodically about potentially reopening an intelligence collection facility in Lourdes, Cuba, that was shuttered in 2001. Such efforts, at a minimum, serve as a reminder that Moscow could expand its military and security footprint in the Western Hemisphere to counter or pressure the United States militarily.

THE CHINA FACTOR

Russia’s engagement in Latin America should be seen in the context of China’s growing role there. While the United States remains the region’s most significant trade partner, trade with China is rising rapidly. Total trade between China and Latin America from 2006 to 2016 increased by more than 200 percent, compared to a 38 percent increase in trade between the United States and Latin America. Russia’s role as a trading partner is demonstrably smaller (see figure 1).

China has been a steady importer of Latin American commodities, but in recent years its activity in the region—as elsewhere in the world—has expanded to include infrastructure investment. In Ecuador, for example, China built a massive hydroelectric plant that provides 35 percent of the country’s energy. China has also built two nuclear power plants in Argentina, a 152-mile-long motorway in Colombia, and a container port in northern Brazil. China holds a 23-percent stake in Brazil’s third-largest energy firm.

China has not only harnessed its economic power to rival the United States, but it has also pushed initiatives, such as the promotion of educational exchanges and cultural activities as outlined extensively in the National Endowment for Democracy’s “Sharp Power” report. China is both an ally and a competitor to Russia’s agenda in the region. The two countries share an interest in eroding U.S. hegemony in Latin America, but they compete in some spheres, such as arms sales and rights to oil fields. Although Moscow does not have the resources to match China as an economic actor in Latin America, it has been able to leverage other instruments in its toolkit to gain, sustain, and expand its presence.

ECHOES OF A SOVIET APPROACH

Moscow’s approach to Latin America today echoes Soviet outreach in the 1960s through 1980s. The Soviets had largely accepted U.S. dominance there, viewing it as too far away to defend militarily and too expensive to prop up economically. But when and where domestic politics were in flux, Moscow did not hesitate to insert itself, much as it is doing today. Moscow looked to develop ties with leftist parties and revolutionary movements that were sympathetic to communist and socialist leanings. These efforts kicked off in 1959, when Fidel Castro’s revolution in Cuba opened up new opportunities for the Soviet Union to project its influence in the Western Hemisphere.

During this time period, Moscow sought to capitalize on regional rivalries, anti-U.S. sentiments, and the ambitions of local dictators to help it establish a presence and exploit polarizations within and between countries.

  • In the wake of the 1962 Cuban Missile Crisis, Moscow provided Havana with financial and security benefits—about $4 billion in annual subsidies through the 1980s. In exchange, Cuba became an outpost for Soviet intelligence gathering and a platform to support other revolutionary movements in Latin America. Even as Soviet resources dwindled, the 1989 Soviet-Cuba treaty provided for the continuation of a special relationship that included financial support and arms supplies.
  • In the 1980s, Moscow sent weapons to the leftist Sandinista government in Nicaragua as it fought to suppress the U.S.-backed Contras. Moscow also supplied Nicaragua with oil, machinery, and food. The relationship suffered when the Sandinistas were voted out in 1990, and Soviet financial support withered.
  • In Peru, following the 1968 leftist military coup, the Soviets provided aircraft, tanks, and other equipment that contributed to Peru’s tense relations with Ecuador and Chile. The country returned to democracy after the 1975 countercoup. Peru’s ties to Moscow were subsequently reduced.
  • In Argentina in the 1980s, the Soviet Union supported right-wing military groups and purchased beef and grain. This trade relationship, which also included sales to Argentina of heavy water and uranium, helped Moscow offset the partial trade embargo imposed on it by the United States in the wake of the Soviet invasion of Afghanistan. These economic and military ties evolved into political support when the Soviets sided with Argentina against the UK in the Falklands War and blocked UN discussions of Argentina’s human rights violations.

Latin America’s progress toward democratic governance in the 1980s and 1990s limited Soviet and Russian influence there, as did the implosion of the Russian economy after the Soviet collapse. Yet the ties established during this period provide Moscow with a base of experience and networks it can draw upon today, particularly when negotiating commercial deals or arms sales.

REGAINING TRACTION

Russia began a gradual return to Latin America in the mid-2000s, led by loans and arms sales to Venezuela in 2005. Although Moscow no longer leverages socialist ideology to gain closer relations with Latin American nations, it seeks to exploit a shared desire for diversity in political, economic, and security relationships. On a political level, Moscow has used its connections in the region to message to the United States and the rest of the world that it is willing to stand up to Washington.

This was apparent in the latter half of 2008 in the wake of the Russian-Georgian war meant to end Georgia’s push for NATO membership and U.S. support for it. As NATO and U.S. ships sailed to the Black Sea after the war, two Russian nuclear-capable bombers landed at an airfield in Venezuela and flew training missions for several days before returning to Russia. Later, a Russian naval flotilla, including the heavy nuclear-powered cruiser Peter the Great, conducted military exercises with Venezuela and visited ports in Cuba and Nicaragua. Russia’s then president Dmitry Medvedev visited Latin America in November 2008 and, over the course of the following year, hosted Venezuela’s then president Hugo Chávez, Nicaragua’s Daniel Ortega, Bolivia’s Evo Morales, and Ecuador’s then president Rafael Correa. It was a clear signal to Washington that Moscow could reciprocate and deploy forces in the United States’ backyard.

A few years later, Moscow sought to demonstrate its global reach despite U.S. and European efforts to isolate it for its actions against Ukraine. Again it turned to Latin America. In July 2014, Putin visited Cuba, Argentina, Brazil, and Nicaragua, concluding a number of security and economic agreements. A Russian intelligence ship docked in Cuba later that year. In 2015, Russian Defense Minister Sergei Shoigu traveled to Cuba, Nicaragua, and Venezuela where he met with leaders to discuss potential Russian access to ports and airfields. In Russia’s most recent Foreign Policy Concept—a public document issued in November 2016 by the Ministry of Foreign Affairs to lay out its priorities—Latin America did not figure prominently, but its increasing importance was recognized: “Russia remains committed to the comprehensive strengthening of relations with the Latin American and Caribbean States taking into account the growing role of this region in global affairs.”

Moscow has been particularly drawn to developing relationships with countries that are part of the Bolivarian Alliance for the Peoples of Our America (ALBA), which was founded by Cuba and Venezuela and includes Bolivia, Ecuador, and Nicaragua, among others. This loose grouping has looked to create economic alternatives to Western-dominated financial institutions, holds largely anti-U.S. views, and is led by populists seeking to retain power, making it a like-minded partner for Moscow.

In recent years, Moscow has relied primarily on arms sales and commercial deals—particularly in the energy sector—as its main points of entry to the region. Other activities have also included leveraging its newly established Spanish-language media outlets, as well as strengthening cultural and political ties, including through high-level visits.

Arms Sales and Security Relationships

Moscow’s efforts to build ties to Latin America enjoy one important advantage: many of these countries are familiar with Soviet weapons and equipment, having purchased them in years past, and are attracted by the lower price tag of Russian arms. Through arms sales, Moscow looks to generate income, displace U.S. suppliers, and sustain and improve state-to-state security relationships. Cuba, Nicaragua, Peru, and Venezuela have been the leading purchasers of Russian arms in the region. For example, Russia has supplied 90 percent of Nicaraguan arms imports since 2000.

The volume of arms sales can vary significantly from year to year, often depending on one major deal. Nevertheless, Russia has demonstrated that it is a serious competitor to the United States (see figure 2). Between 2000 and 2017, the share of arms sales to Latin America from Russia was about 20 percent, on par with the share of U.S. sales, according to data from the Stockholm International Peace Research Institute. While recent deals with Argentina, Brazil, and Venezuela have stalled for various reasons, Russia is pursuing new opportunities this year with Bolivia, Mexico, Nicaragua, and Peru.

Commerce, Trade, and Energy Deals

Moscow has looked to take advantage of opportunities where countries have been disadvantaged, rejected, or declined by state or private international financial institutions, presenting itself as an alternative and reliable partner. Moreover, Moscow often offers more attractive, flexible terms than lenders who adhere to Western business standards.

From Russia’s perspective, developing commercial and trade relationships outside of the EU and the United States is an economic necessity in the face of current—and possibly future—economic sanctions. Moscow pursues state-to-state deals and uses state-owned or -controlled companies to secure footholds across the region. Russia’s strongest trade relationships, while small in absolute terms, are with Brazil and Mexico—together they make up about half of all of Russian trade in Latin America. Far more politically significant is the expansive relationship with Venezuela that has developed over the course of Putin’s time in office, with particular focus on the role of Russian energy giant Rosneft in the country’s energy sector.

News and Social Media Platforms

Around the world, the growing access to the internet and social media, primarily via smart phones, has created a host of new tools to shape and manipulate public opinion. Latin American populations are particularly vulnerable, with an internet penetration rate of 65 percent or higher in most countries, and a sharp increase in access to mobile devices in poor, uneducated communities. In addition, governments are struggling to establish regulations that enable the discovery and blocking of false information and automated or fake personas.

In this context, Moscow has worked steadily to expand its state-controlled propaganda platforms in nearly every Latin American and Caribbean country. Moscow-based RT is available across Latin America via cable providers and through agreements with local channels that rebroadcast its programs. RT Spanish was launched in 2009 and features its own news presenters and programming, as well as translated versions of RT English programming. Although based in Moscow, RT Spanish has bureaus in Buenos AiresCaracasHavanaLos AngelesMadridManagua, and Miami. Russia’s Sputnik media outlet launched a Spanish operation in late 2014, providing radio- and web-based news and entertainment to audiences across Latin America.

Populations in Latin America are particularly avid social media userscompared to other regions in the world, according to data collected in 2015, making them susceptible to potential Russian efforts to promote divisive or anti-U.S. narratives via online platforms. Recent reporting suggests Cambridge Analytica, the firm that used data from Facebook to target U.S. voters in the 2016 presidential election, has been active in Mexico, Brazil, and possibly Colombia, raising the specter of Russian or other external attempts to manipulate public opinion during an election year. Tipping just one or two countries toward an anti-U.S. stance—especially long-time U.S. partners—could complicate U.S. policy and distract Washington from its global priorities.

Political and Cultural Engagement

Moscow has pursued a political and cultural agenda in Latin America as well. High-level leadership meetings have served as opportunities to demonstrate Moscow’s engagement and to secure agreements for further cooperation (see text box). Moscow has tapped into Russian cultural and historical traditions, as well as its small diaspora communities, to foster a friendly environment for its agenda in Latin America and by extension in multilateral organizations, such as the UN. According to Rossotrudnichestvo, the government agency in charge of Russia’s public diplomacy, Latin America has few Russian speakers—only about 200,000—but cultural and historical events attract growing numbers of local populations. The agency has also created a New Generation program geared toward young Latin American leaders in different fields who are between twenty and forty years old. The program brings participants to Russia for one week and offers lectures in Spanish on Russian internal politics, the country’s economy, and its approach to diplomacy. According to one participant, “They want us to see Russia with our own eyes, and not through what we’ve been told by others.”

UNDERSTANDING LATIN AMERICA: THE VIEW FROM MOSCOW

Despite the geographic distance, Russia has several well-established centers for Latin American studies that are positioned to inform and serve Russian government and business engagement with the region. Soviet focus on Latin America during the Cold War created a foundation of expertise that can be built upon today. The Institute of Latin American Studies, part of the Russian Academy of Sciences, is the leading center in Russia. It was founded by the Soviet government in 1961 following closer Soviet-Cuba relations, and today it employs seventy-nine researchers within four centers of study on economic, political, cultural, and Iberian studies. The Ibero-American Studies Center—established in 2013—at St. Petersburg State University is another core center of education and expertise, and houses the LACRUS project designed to serve as a focal point for Russian academic research, cultural events, and business ties with Latin America. Other key centers of study include the Moscow State Institute of International Relations (MGIMO), which has played an outsized role in educating Russian diplomats on Latin America, including the current Russian ambassadors to Argentina, Brazil, Cuba, Mexico, and Venezuela.

HIGH-LEVEL VISITS BETWEEN RUSSIA AND LATIN AMERICA

Since 2008, Russian leaders and officials have traveled to Latin America at moments when these visits have been strategically important to Moscow’s broader foreign policy goals.1 A few months after the Russian-Georgian war in August 2008, then president Dmitry Medvedev and Foreign Minister Sergey Lavrov both attended the Asia-Pacific Economic Cooperation (APEC) summit in Peru and also traveled to Brazil, Cuba, Colombia, Ecuador, and Venezuela. Between 2010 and 2013, Lavrov made three trips to the region, visiting Cuba, Guatemala, Mexico, and Nicaragua in 2010; El Salvador, Guatemala, and Peru in 2011; and Argentina and Brazil in 2013. Chief of the General Staff Valery Gerasimov also visited Cuba and Nicaragua in 2013, and Defense Minister Sergei Shoigu visited Brazil and Peru that same year. Amid the Ukraine crisis, Lavrov traveled to Chile, Cuba, Nicaragua, and Peru in April 2014, and Putin followed up with a tour of his own that July to Argentina, Cuba, Brazil, and Nicaragua. The following year, Shoigu traveled to Venezuela, Nicaragua, and Cuba, while Lavrov visited Cuba, Colombia, Guatemala, and Nicaragua. In 2016, Putin traveled to Lima for the APEC summit, and this year, he plans to attend the G20 summit in Argentina in November.

Latin American leaders and officials have visited Russia dozens of times during the same period, but a majority of the visits have been conducted by just a handful of countries, including:

  • Venezuela: Venezuelan leaders and high-level officials have visited Russia more frequently than any other Latin American state since 2008. Former president Hugo Chávez and current President Nicolás Maduro have visited Russia seven times altogether, with Maduro’s most recent visit in October 2017.
  • Argentina: Then president Cristina Fernández de Kirchner visited Russia in 2008 and 2015, and current President Mauricio Macri traveled to Moscow for an official state visit in January 2018. Argentinian foreign and defense ministers have visited Russia nearly every year since 2010.
  • Brazil: Its presidents have visited Russia four times since 2008, and President Michel Temer most recently visited in June 2017. The tempo of Brazilian officials’ visits to Russia has slowed since 2013, with most meetings occurring on the sidelines of other international summits or conferences in Russia.
  • Cuba: President Raul Castro has visited Russia three times since 2008, most recently in May 2015. High-level Cuban officials have also continued to visit Russia regularly.
  • Nicaragua: President Daniel Ortega visited Russia in 2008. Most of Nicaragua’s recent high-level visits to the region have involved Nicaragua’s chief of the general staff (in 2014 and 2017) or commander in chief of the army (in 2013 and 2015), although lower-level Nicaraguan officials have visited Russia almost every year since 2008.

1 Visits to Russia and Latin America also include visits that coincide with multilateral forums or conferences (for example, BRICS and G20 summits) occurring in the host country. High-level visits include visits by heads of state, foreign ministers, defense ministers, or chiefs of the general staff (or equivalent). Background and dates found here:“Events,” President of Russia, March 26, 2018, http://en.kremlin.ru/events/president/news.;  “News,” Ministry of Foreign Affairs of the Russian Federation, March 26, 2018, http://www.mid.ru/en/foreign_policy/news.; “Novosti” [News], Ministry of Defense of the Russian Federation, March 26, 2018, http://ens.mil.ru/education/news.htm.

BILATERAL RELATIONSHIPS

Deepening Partnerships

In the coming year, Moscow will look to further relations with Bolivia, Cuba, Nicaragua, and Venezuela, and use these ties as launching points for extending its influence elsewhere in Central and South America.

Bolivia

Bolivia-Russia relations have grown in recent years, primarily along political lines. Bolivia’s anti-U.S. stance—fueled by the 2008 tit-for-tat diplomatic expulsions amid civil unrest in Bolivia, which Morales blamed on the United States—aligns with Moscow’s posture and plays out most notably in the UN, where Bolivia is currently serving on the UN Security Council as a rotating member from 2017 to 2018. Moscow likely sees value in pursuing a closer relationship with Bolivia, based on Morales’s anti-U.S. stance and his vocal promotion of multipolarity in the international order. In the UN, Bolivia has followed Moscow’s lead in opposing U.S.-backed resolutions condemning chemical weapons use in Syria at least three times (April and October 2017 as well as April 2018). Morales was one of the first leaders to congratulate Putin on his March 2018 reelection victory and has spoken out in support of Moscow after Western countries’ expelled Russian diplomats following the poisoning incident in the UK.

Morales became the first Bolivian president to visit Russia when he joined Putin for talks in 2009. Since then, the two countries have pledged cooperation in a number of areas, including in the energy industry. Joint energy initiatives include Gazprom operations in two gas fields in Bolivia and Rosatom’s participation in a joint nuclear research and technology center project in the city of El Alto.

Cuba

Cuba was Russia’s primary partner in the region during the Cold War and remains of great interest to Moscow because of its strategic location near the United States. In reengaging with Latin America, Moscow has focused its outreach efforts prominently on Cuba. Medvedev made trips there in 2008 and 2013, followed by Putin in 2014. Moscow has effectively financed much of Cuba’s military modernization, writing off $30 billion of Cuba’s Cold War–era debt and issuing new credits for the purchase of new equipment, including helicopters and fixed-wing military aircraft. In December 2016, Cuba and Russia agreed on a defense technology and modernization program for Cuba through 2020. Last fall, Russia and Cuba signed new agreements providing for Russian investment in Cuba’s railway system and in the energy sector. Rosneft began oil shipments to Cuba last year—to help compensate for the drop in Venezuelan oil—and is in discussions with Havana regarding access to onshore and offshore oil fieldsas well as refurnishing a local refinery. Benefits to Moscow for this assistance include the establishment of a GLONASS satellite communications facility—akin to the U.S. Global Positioning System—on Cuban territory. In addition, Russian military leaders have hinted at the possibility of returning to the Lourdes signals intelligence facility, a move that would boost Moscow’s intelligence collection capabilities against the United States.

Cuba’s new leader, Miguel Díaz-Canel, faces the challenge of carrying on the Castro model without having the revolutionary credentials that gave Fidel and Raúl Castro credibility in their positions. In addition, Cuba is under significant strain economically, with growth stagnating and assistance from its close ally Venezuela dwindling. These pressures provide an opening for Russia to deepen its ties with the new leader.

Nicaragua

Nicaragua is Russia’s most steadfast political and military partner in the region. The relationship is built on years of Soviet support for President Daniel Ortega’s Sandinista movement in the 1980s. A renewed relationship began with Ortega’s return to power in 2007 and the country’s diplomatic recognition of the breakaway republics of South Ossetia and Abkhazia in the wake of the 2008 Georgian war. Nicaragua allowed Russian naval exercises to take place in its territorial waters later in 2008, and, in 2015, the Nicaraguan parliament voted to allow Russian warships to dock in Nicaraguan ports.

Nicaragua has become reliant on Russian military support. The two countries in 2013 signed an agreement of Russian commitment to the modernization of Nicaragua’s military. Moscow has sold and donated equipment to the country, and has hosted Nicaraguan forces for training. Between 2012 and 2016, Russian arms made up 100 percent of Nicaragua’s imported arms purchases. Moscow sold Managua two military transport planes earlier this year for search and rescue operations, and opened a joint counternarcotics center in November 2017 from which to train and conduct operations in Nicaragua and later across the broader region. Managua has also agreed to house a GLONASS station on Nicaraguan territory. In the face of ongoing mass protests against government-approved social security reforms, Ortega is likely to look to Moscow for public as well as financial support to bolster his position and stabilize the country.

Venezuela

Russia has stepped in over the last year to provide a political and financial lifeline to the Venezuelan government, in sharp contrast to the United States, which has threatened military intervention and is looking to increase pressure on the regime via sanctions. In November 2017, Russia agreed to refinance $3.15 billion in bilateral loans and delay almost all payments until after 2023, a delay that has given Caracas additional breathing room as it manages the consequences of defaulting on its sovereign debt. In return, Moscow is gaining preferential access to Venezuela’s enormous oil reserves—as well as leverage it could use to advance its interests when dealing with current and future Venezuelan governments.

Russia’s Rosneft has played a lead role in supporting Venezuela’s energy sector and continues to expand its operations as foreign companies have retreated in the face of the slow-motion collapse of PDVSA, Venezuela’s state oil company. PDVSA has relied on Rosneft for prepayments of future oil deliveries to meet its financial commitments and to market physical volumes of Venezuelan crude to refiners in the United States and other countries. Russian engineers are involved in a number of PDVSA-Rosneft joint ventures. Last December, a Rosneft subsidiary won licenses to develop two offshore gas fields, and a Rosneft team is currently reviewing plans to take over the aging Amuay refinery. Maduro faces reelection on May 20 and will be looking for continued support from Moscow to secure his victory, despite Venezuela’s near economic and social collapse. While Moscow has an ally in Maduro, it is also likely positioning itself to maintain a presence amid a leadership transition.

Openings for Influence

Upcoming events in Brazil, Mexico, Colombia, and Argentina present opportunities for Moscow to create problems or distractions for the United States with some of its closest partners.

Brazil

The Russia-Brazil relationship is centered on bilateral trade and commercial ties but also involves cooperation within the BRICS organization. Bilateral trade has been on the rise, reaching $4.3 billion in 2016, and consists of Russian imports of food and agricultural items and exports of fertilizer, mineral fuels, and metals. In 2016, Russia purchased 90 percent of its imported pork from Brazil and 55 percent of its imported beef from Brazil and ParaguayPresident Michel Temer visited Moscow last year to discuss opportunities to expand bilateral trade and investment.

The economic relationship between the two countries has been complemented by regular high-level leadership meetings, and by coordination and support for each other in multilateral organizations. Brazil, for example, abstained from voting against Russia in a 2014 UN resolution condemning Russia’s actions in Crimea, and Russia is a key supporter of Brazil’s candidacy for a permanent seat on the UN Security Council.

Brazil will hold its presidential election in October 2018. With frontrunner Luiz Inácio Lula da Silva arrested for corruption, the contest is now wide open amid a highly polarized political environment flooded with social media and fake news. A recent study of social media interference in Brazil’s 2014 election by the Rio de Janeiro–based think tank FGV DAPP uncovered a significant automated network that included Twitter profiles with readily identifiable Russian iconography and Russian-language materials. These botnets operated in support of a candidate whose views were not aligned with Moscow politically and appear to have been part of a commercially arranged effort on behalf of the candidate. This discovery has raised concerns about Russia’s ability to interfere in this year’s contest and also whether these techniques were later refined and deployed as part of Russian information operations in geographical regions that are of greater interest to the Kremlin.3

Moscow’s Red Square serves as background photo for an automated Twitter profile that supported a 2014 Brazilian presidential candidate. This was one of many suspicious Russia-linked profiles uncovered by the Brazilian think tank FGV DAPP.

Mexico

Mexico-Russia relations today are modest, but U.S. government threats to abolish NAFTA and to crack down on immigration have created fissures in the relationship between Mexico City and Washington that open the door to Russian exploitation. Russia has ramped up its Mexico-related programming in recent months as part of an effort to lend support to presidential candidate Andrés Manuel López Obrador’s campaign in the upcoming July 1 election. Since last year, RT has been broadcasting Spanish-language programming favorable to López Obrador, the populist frontrunner. Other state-run Russian outlets, such as Sputnik, parrot these pro–López Obrador narratives and are available in a variety of online formats to the nearly 60 percent of Mexicans who have internet access or are on social media. Moscow likely views López Obrador as a potential ally given his populist anti-U.S. views. As Carnegie scholar Andrew Weiss described in an Atlantic article earlier this year, by devoting propaganda resources to him, Moscow seeks to promote a divisive, anti-U.S. campaign in the run-up to Mexico’s election.

The Mexican vote is also vulnerable to cyber meddling. El Universal cites an internal Mexican government report that outlines vulnerabilities in the new electronic voting system that has been designed to enable Mexicans to cast their ballots from overseas. More generally, Moscow likely sees the Mexican presidential election as an opportunity to retaliate for perceived U.S. interference in the internal politics of former Soviet states.

In the economic realm, Mexico is preparing for the potential unraveling of NAFTA and looking to Russia as one of several alternatives to U.S. trade and energy ties. Russian expertise in the fertilizer industry and in energy extraction and processing would complement Mexico’s economic needs. Mexico’s state-run oil company Pemex is looking to privatize some of its components; Russia’s Lukoil has expanded its oil production in the Gulf of Mexico after having won two tenders from the Mexican government over the past year. Moreover, although many Latin American countries welcome Chinese investment, Mexico’s relationship with China is more cautious, as the two countries have in recent years competed for access to the U.S. market. This wariness makes the prospect of commercial deals with Russian entities more attractive.

Colombia

A longtime ally of the United States, Colombia’s presidential election—with the first round slated for May 27—provides an opening for outside influence. It could yield surprising results as it is the first election since the 2016 peace deal between the Revolutionary Armed Forces of Colombia (FARC) and the government, and the field is flooded with candidates. Former FARC leader Rodrigo Londoño dropped out of the race for health reasons, but other candidates range from supporters of the peace deal to right-wing opposition figures who argue for a more heavy-handed approach to security.

Like many Latin Americans, Colombians are hooked on mobile devices and social media, making them susceptible to efforts—from within or outside the political system—to confuse and manipulate public opinion ahead of election day. In addition, Colombian authorities are investigating a series of cyber intrusions into voter registration systems that were discovered prior to the March parliamentary elections. One of the hacks was traced to a Venezuelan account, which some Colombian experts see as a Russian effort to extend influence through its relationships in Venezuela. Russian economic and security cooperation with Colombia remains relatively limited.

Argentina

The close relationship between Russia and Argentina that existed from 2007 to 2015 under the presidency of Cristina Fernández de Kirchner seemed in peril in 2016 when Mauricio Macri was elected and broke the country’s tradition of populist leadership. Yet Macri visited Moscow in January 2018 and renewed the Russia-Argentina strategic partnership with Putin. This partnership includes a proposal from Rosatom to build a nuclear power station in Argentina and plans for joint uranium exploration and mining. Buenos Aires will host this year’s G20 conference, and Macri appears to be establishing good relations with Moscow beforehand as an attempt to fend off any Russian misbehavior.

Russia created a stir with its efforts to build up a media presence in Argentina over the past few years. In 2014, RT Spanish began to broadcast on Argentina’s public television platform—only the second foreign broadcaster to do so. Following Macri’s victory in 2016, his administration announced the agreement would be suspended. Moscow reacted sharply, blaming the United States and threatening reprisals against Buenos Aires. Under pressure, Macri’s government reversed its decision, and RT was allowed to keep its place on the public television channel.

Yet there have been problems on both sides. A drug bust earlier this year has been an embarrassment for Moscow. The sting operation revealed official Russian aircraft were used to transport cocaine out of Argentina and implicated Russian embassy officials in the drug-trafficking operation between Argentina, Germany, and Russia. It underscored the presence of Russian drug and criminal networks—and their ties to Russian officials—in Latin America, representing another potential source of leverage and influence.

WHAT’S AT STAKE?

Although Russia’s efforts to engage Latin America are largely overshadowed by the U.S. and Chinese presence, Moscow’s propaganda outlets are working to stoke anti-U.S. sentiment and support populist figures in upcoming elections. Moscow is also using its military and commercial ties to establish a meaningful presence, and thus enhance its image as a global power. As Russia-U.S. relations continue to deteriorate, Russia will likely turn to the Western Hemisphere as an important symbol of its global reach and to challenge the United States. Cuba, Nicaragua, and Venezuela are poised to serve as the cornerstones of this effort but do not on their own provide enough critical mass to allow Moscow to shape the region’s overall direction.

Moscow’s reach in Latin America is limited by its modest resources. Russian military deployments there are costly and complicated, and Moscow lacks the financial resources to meet Latin America’s need for foreign investment or to serve as an important market for exports. Yet Moscow has been adept at promoting its presence at a low cost, and it can sustain this approach for a long time. When combined with China’s growing role in Latin America, this puts U.S. leadership and dominance at risk. Over time, Washington faces the prospect of losing ground with important economic and political allies.

In the political realm, Russia is looking to draw on its ties with countries in the region to promote its international agenda. Over the past ten years, it has received political support from a handful of countries—Bolivia, Cuba, Nicaragua, and Venezuela—across a host of issues important to Russia, such as Georgia, Syria, and Ukraine. Bolivia’s Morales tweeted upon Putin’sreelection that it “guarantees geopolitical equilibrium and world peace before the onslaught of imperialism.”

In the economic realm, Russia is ready to capitalize on the fallout from NAFTA renegotiations, and while it cannot economically replace the United States as a consumer or an investor, it is well positioned to respond to Latin American nations’ eagerness to diversify away from what they see as an unreliable, uncooperative United States.

In terms of security, the United States faces potential military and intelligence challenges if Moscow is able to establish a greater physical presence in the region. Short of establishing its own bases, Moscow could pursue agreements with key countries that would provide it with the option of placing its assets and forces in the United States’ backyard. Cuba, Nicaragua, and Venezuela have hosted Russian ships in their ports and have engaged in joint exercises.

The risks to Moscow from its low-cost influence and engagement efforts are relatively limited, but it does face the prospect of financial losses from its investments in countries such as Cuba and Venezuela. In particular, should instability in Venezuela lead to the government’s collapse, Russian firms could be left with unpaid loans or lose access to potentially lucrative energy projects. Many of the oil and gas deals struck over the past two years were negotiated at the presidential level and did not receive legislative approval.

To counter Russian activity that may complicate U.S. partnerships and challenge U.S. security interests, the United States can engage in three broad lines of effort that are likely to be well received by Latin American leaders and their publics:

Demonstrate long-term commitment to the region. Showing that Washington is a reliable partner looking to foster close partnerships on shared challenges is likely to resonate with Latin American leaders and could help offset Russian efforts to degrade the U.S. image. This would include engaging in joint efforts to tackle concrete threats such as transnational crime and drug trafficking, terrorism, and human trafficking. It could also include collaborative efforts to promote regional investment and development.

Focus efforts on key partners and key values. Efforts by the United States to improve ties with states that are key to its political, economic, and security interests—such as Argentina, Brazil, Colombia, and Mexico—would reduce tensions and could help stem Russian advances. Emphasizing shared goals and values could be contrasted with Moscow, which is leveraging opportunities for its own destabilizing purposes—including using Latin American states to counter or threaten the United States. Given the concerns democratic governments in the region have regarding the vulnerabilities of fake news, social media networks, and automated bots, U.S. efforts to partner on these issues would be welcome.

Highlight Russia’s malign activity. Exposing cases where evidence points to Russian attempts to manipulate public sentiment to influence an election or to exploit social divisions would highlight the extent to which Moscow is using Latin American states for its own purposes, to the detriment of the countries’ involved. The United States and other Western countries can usefully share their experience and lessons learned from such efforts and encourage Latin American countries to shore up their own societies’ resilience. In addition, exposing corrupt or criminal Russian efforts can touch on the very issues that are growing in salience with Latin American publics.

APPENDIX: RECENT RUSSIAN ACTIVITY IN LATIN AMERICA

# Member of the Bolivarian Alliance for the Peoples of Our America, ALBA
* Election or leadership transition planned in 2018

Argentina

  • Economic Influence: Russia and Argentina cooperate in the nuclear energy sphere. In 2018, the two countries signed an agreement to pursue uranium exploration and renewed plans to cooperate on a nuclear power plant project.
  • Political Influence: Despite skepticism that Russia and Argentina would grow apart after Mauricio Macri entered office in late 2015, Macri renewed the Russia-Argentina strategic partnership during a visit to Moscow in January 2018.
  • Information Space: In 2014, RT became available on public TV networks throughout Argentina—it was only the second foreign TV program in Argentina to do so.
  • Military Ties: Between 2012 and 2017, there were no recorded Russian arms sales to Argentina. In 2010, Argentina purchasedtwo Mi-8/Mi-17 helicopters and ordered another three in 2015. Roscosmos has plans to establish a GLONASS station in Argentina.

Bolivia #

Brazil *

  • Economic Influence: Brazil is an anchor of Russian economic activity in Latin America. In 2016, Brazil-Russia trade reached $4.3 billion. RosneftRosatom, and Gazprom are actively pursuing projects in Brazil.
  • Political Influence: Russia-Brazil cooperation within the BRICS format drives bilateral political relations and reinforces Russia’s commitment to multipolarity.
  • Information Space: The Brazilian government is worried fake news will have an adverse effect on its October 2018 presidential election, fearing rival campaigns will disseminate fake news from abroad. However, they have not explicitly expressed fear of Russian interference.
  • Military Ties: Between 2012 and 2017, Russian arms sales made up 7 percent of Brazil’s imported arms purchases. Since 2010, Russia has delivered Mi-35M combat helicopters and SA-24 portable surface-to-air missiles to Brazil. Brazil has expressed interest in buying SA-22 Greyhound surface-to-air missiles. Russia has four GLONASS stations in Brazil.

Colombia *

  • Economic Influence: In light of Colombia’s traditional alignment with the United States, Russia and Colombia maintain only low-level economic interactions.
  • Political Influence: Formal political relations between Russian and Colombian leaders have not been a key feature of the relationship. Instead, Russia has historically engaged with antigovernment guerilla groups in Colombia—the FARC and ELN. In 2014, it was discovered that corrupt Russian military officers and criminal networks were exchanging weapons for cocaine with those groups. Surrounded by ALBA states with close ties to Russia, Colombia is unique in its long-established relations with the United States.
  • Information Space: Colombia’s 2018 election is the first since the 2016 peace deal between the FARC and Juan Manuel Santos. Russian media, namely RT, supported ex-FARC leader Rodrigo Londoño’s candidacy with positive coverage and an exclusive interview before he dropped out of the race due to health problems.
  • Military Ties: In 2009, Colombia purchased 5 Mi-8/Mi-17 transport helicopters from Russia. Between 2012 and 2017, there were no recorded Russian arms sales to Colombia.

Cuba #*

  • Economic Influence: Russia has provided Cuba with generous debt relief, and the two countries cooperate in the energy sector. In 2014, Russia wrote off Cuba’s $32 billion debt. In October 2017, Russia and Cuba signed an agreement to expand petroleum sector cooperation and to continue Russian donations of oil.
  • Political Influence: Both Medvedev and Putin have visited Cuba during their tenures as president. Cuba has supported Russia in international forums. In 2014, Cuba voted against the UN resolution condemning Russian action in Crimea.
  • Information Space: RT and Sputnik are often cited as main sources by official Cuban media.
  • Military Ties: Russia-Cuba military cooperation extends back to the Soviet era and continues today. Russia and Cuba signed a defense agreement in 2016 and are in the midst of talks regarding access to bases and the reestablishment of the Russian intelligence collection facility at Lourdes. Roscosmos has plans to establish a GLONASS station in Cuba.

Ecuador #

  • Economic Influence: Russia-Ecuador economic ties span cooperation in the following sectors: petroleum, infrastructure construction, banking, and nuclear power. Ecuador has historically run a trade surplus with Russia. In response to Russian countersanctions against the West, Ecuador increased agriculture exports to Russia.
  • Political Influence: Ecuador is willing to work with Russia in opposition to the U.S.-led international order. The two countries grew closer around 2008 within the context of the Russian-Georgian war. However, neither Medvedev nor Putin has visited Ecuador while president.
  • Information Space: Since 2012, Ecuador’s embassy in London has sheltered WikiLeaks founder Julian Assange. WikiLeaks’ work is often in line with the Kremlin’s agenda. Recently, Ecuador twice cut off Assange’s internet access in order to preserve relations with European nations.
  • Military Ties: Between 2012 and 2017, there were no recorded Russian arms sales to Ecuador. Roscosmos has plans to establish a GLONASS station in Ecuador.

Mexico *

  • Economic Influence: After Brazil, Mexico is Russia’s largest economic partner in the region. Due to hiccups in the NAFTA renegotiation process, both Russia and Mexico have expressed interest in deepening commercial ties. However, Russia-Mexico trade is still dwarfed by U.S.-Mexico economic relations.
  • Political Influence: The frontrunner in Mexico’s presidential race, Andrés Manuel López Obrador, is Moscow’s preferred candidate due to his populist, anti-U.S. position.
  • Information Space: RT’s program The Battle for Mexicosupports López Obrador. The show’s host, John Ackerman, is married to Irma Sandoval, an adviser to López Obrador. Ahead of the elections, Mexico’s National Electoral Institute (INE) made an online portal where citizens abroad can vote. Russian computers make up the majority of traffic to the site.
  • Military Ties: Between 2012 and 2017, Russian arms sales made up 2 percent of Mexico’s imported arms purchases. Since 2006, Moscow sold Mexico nine Mi-8/Mi-17 helicopters. Roscosmos has plans to establish a GLONASS station in Mexico.

Nicaragua #

  • Economic Influence: Russia has leveraged economic cooperation to pursue a military presence in Nicaragua. Since Ortega returned to power in 2006, Russia has donated sorghum and wheat to Nicaragua and has pursued infrastructure projects in the country, including an anti-narcotics center and factory to manufacture vaccines.
  • Political Influence: Ortega’s connections to Russia go back to Cold War times when the Soviet Union supported his Sandinista movement. After Ortega was reelected in 2006, Russia-Nicaragua relations deepened. In 2014, Nicaragua voted against the UN resolution condemning Russian action in Crimea. Nicaragua has also recognized the independence of Abkhazia and South Ossetia.
  • Information Space: Nicaragua’s long-standing ties to Russia and the Soviet Union make for a welcome audience for Russian cultural and media outreach. RT programming is available on Nicaraguan television.
  • Military Ties: Nicaragua is heavily dependent on Russia for its security needs. Between 2012 and 2017, Russian arms sales made up 100 percent of Nicaragua’s imported arms purchases. Russia has constructed a GLONASS satellite communications facility in Managua, which some U.S. officials suspect has “dual use” capabilities. In 2015, the Nicaraguan parliament voted to allow Russian warships to dock in Nicaraguan ports.

Peru

  • Economic Influence: Economic ties between Russia and Peru are modest in comparison to political and military relations. However, economic collaboration offers Peru an alternative to engaging with the U.S.-led international system. Peru runs a significant trade deficit with Russia, which is unique in comparison to the rest of Latin America. Rosatom and Gazprom have demonstrated interest in Peru.
  • Political Influence: After 2008, Russia began to reengage with Peru via high-level visits to the region. Medvedev visited Peru in 2008, and in 2013, Shoigu also made a trip to the country. In 2016, Putin traveled to Peru as part of the APEC summit.
  • Information Space: RT programming is available on Peruvian television.
  • Military Ties: Military cooperation is the cornerstone of Peru-Russia relations. Peru maintained a robust military relationship with the Soviet Union, buying arms and receiving Soviet advisers. Between 2012 and 2017, Russian arms sales made up 24 percent of Peru’s imported arms purchases, and in 2015, Peru signed a strategic partnership agreement with Russia.

Venezuela #*

  • Economic Influence: Russian financial support is critical as Venezuela copes with the effects of a chaotic default, hyperinflation, and economic collapse. State-controlled Russian oil giant Rosneft has invested heavily in Venezuela’s oil and gas sector. In November 2017, the Russian government agreed to restructure approximately $3 billion in loans to help ease Caracas’s debt burden.
  • Political Influence: President Nicolás Maduro has followed in Hugo Chávez’s footsteps, establishing close ties with Russia. Billions of dollars in Russian advance payments for deliveries of Venezuelan crude have helped Maduro hold on to power. In 2014, Venezuela voted against the UN resolution condemning Russian action in Crimea.
  • Information Space: RT programming is available on Venezuelan television. Venezuela has even participated in spreading Russian disinformation. In late 2017, the Spanish newspaper El País reported that during the Catalan secession crisis, the “Russian network [RT] used Venezuelan accounts to deepen the Catalan crisis.”
  • Military Ties: In the early 2000s, Chávez worked to deepen military cooperation between Russia and Venezuela. Between 2012 and 2017, Russian arms sales made up 69 percent of Venezuela’s imported arms purchases. Venezuela has purchased aircraft, transport and combat helicopters; SAM systems; MRLs; mortars and anti-tank missiles, as well as IFVs and tanks. Roscosmos has plans to establish a GLONASS station in Venezuela.

 

-JULIA GURGANUS

Leave a Comment