Varieties of imperial decline: effete money

US global dominance depends on inflating its money and credit to maintain its military spending. That system has always depended on intimate collusion between Western Bloc governments, their central banks and their countries' major financial houses. That is why, against the interests of the US people, the Obama administration is bailing out companies like Goldman Sachs, J.P.Morgan and Citigroup and helping them to consolidate by devouring failed rivals like Lehman Brothers or Wachovia. Western Bloc allies – European and Pacific country governments - continue to accept this system as the price they pay to piggy-back on US imperialism, maintaining their global dominance without the politically unacceptable price of large militaries.

The current G-20 talks seem to be essentially about how to adapt long-standing Western Bloc dominance of world affairs and wealth to new circumstances resulting from the spectacular failure of free-market capitalism. In Latin America, one important aspect of the recent summit in Viña del Mar of “progressive governments” was an effort by European members of the dominant Western Bloc to coax cooperation from Brazil, Argentina, Chile and Uruguay for US and European Union proposals at the G-20 meeting in London (which will include Brazil and Argentina, as well as Mexico). Immediately after that Viña del Mar meeting in Chile, US Vice-President Joe Biden met Central American leaders in Costa Rica.

That meeting in Costa Rica exposed several interesting aspects of potential resistance in the majority world to a recycled Western Bloc imperial system. Scheduled to be a summit of Central American Presidents, the Costa Rica meeting took place just five days after the Central American Integration System summit in Managua, Nicaragua, involving all the Central American countries (except Costa Rica, whose President Oscar Arias chose not to attend nor even send a representative) and various observers from Caribbean nations. It was a crass failure of US State Department diplomacy to snub that meeting in favour of the event promoted by Costa Rica's President Arias.

Various sub-plots make up the whole story, but the underlying theme is regional integration and its competing versions. Costa Rica has remained aloof from that process in Central America apart from its somewhat sniffy decision to join Petrocaribe – the regional energy framework promoted by Venezuela. All the Central American countries except El Salvador are members of Petrocaribe. Honduras and Nicaragua are also members of Petrocaribe's big sister, the wider regional economic integration initiative ALBA – the Bolivarian Alternative for the Americas.

The Presidents of both Honduras and Nicaragua refused to attend the meeting with Joe Biden in Costa Rica. Among other matters, they cited their objection to the exclusion of Leonel Fernandez, President of the Dominican Republic, which they regard as a vital player in the region's development. Fundamentally, they rejected what they regarded as an imposition of the US government's agenda using the Costa Rican government as a proxy.

So the meeting in Costa Rica could hardly have failed to flop, since it was so obviously a footnote to what was, for the US, the much more important meeting in Viña del Mar. That failure to engage with the Central American integration process made more obvious the option US diplomacy is developing to counteract the ALBA solidarity-based vision of regional cooperation and integration promoted by the governments of Venezuela and Cuba. Essentially, that US government option consists of a trade-off of regional influence with Brazil.

Brazilian President Lula da Silva is content to see US influence decline if that permits Brazil's own regional influence to grow. His Janus-faced policy allows him to play a double game of cooperation with the Venezuela's President Chavez and collaboration with whoever happens to be fronting for the US plutocracy at the moment, currently President Barack Obama. With the election of Mauricio Funes as President of El Salvador, Brazil now has a trojan horse inside Central America. Funes, who has openly stated his alignment with the US and Brazil, is married to the former representative to El Salvador of President Ignacio da Silva's Workers' Party.

Central America is an important region both strategically – since it is is a crucial transit area for global trade – and now also economically because it is building a common market of over 40 million people. That is why the kind of regional integration it implements is such an important ideological and trade battleground. It is also why Europe and the United States make such a fuss about tiny Nicaragua, ALBA's leading promoter in Central America. If the ALBA solidarity-based trade and cooperation model can be made to work then US and European multinational corporations can kiss goodbye to the fabulous profits they have always made in the region to the detriment of the region's peoples.

The dilemmas of US decline in Central America reflect the Obama administration's wider regional policy failure. The acid test of a change in US foreign policy in Latin America is its commitment to peace in Colombia and in Mexico. But there is no sign of such a commitment. Traditional US military policies in the region prevail. US Vice President Joe Biden made clear at the meeting in Costa Rica that the US was not offering any financial aid to the region to help impoverished countries cope with the global economic depression. Instead he offered a few more tens of millons of worth-less-and-less US dollars to implement Plan Merida - an even deeper militarization of Mexico's narcotics wars, now spilling over into neighbouring Guatemala.

But governments in the region are not waiting for orders from the US and Europe any more. It looks as though the crucial arguments are now going to be between what Raul Zibechi has called Brazilian sub-imperialism and the radical dynamism of Hugo Chavez backed by the wisdom and experience of his ALBA colleagues in Cuba. In Central America, the arguments boil down to one between the ALBA protagonists led by the FSLN government in Nicaragua, Brazil's new Central American champion Mauricio Funes in El Salvador and defenders of the failed model of US style free market capitalism, principally Oscar Arias in Costa Rica. In the background, snug in their military bases throughout the region, the US military stroke their ironware.

Toni writes for tortillaconsal.com

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