“We are seeing a surreptitious clash, a war that no one dares name, between China and the United States for Peru’s soul.”
These are the words (translated from their original Spanish to English by yours truly) of the renowned Mexican geopolitical analyst Alfredo Jalife-Rahme. Jalife-Rahme is a professor, writer, columnist and political analyst of Lebanese descent who specializes in international relations, economics, geopolitics, and globalization. His last two weekly video lectures (in Spanish) have dealt with the wide-ranging causes and potential consequences of Peru’s latest political crisis.
That crisis has already resulted in the impeachment and imprisonment of the democratically elected President Pedro Castillo, and has cost the lives of 27 protesters. After decades of stumbling from crisis to crisis, scandal to scandal and president to president, Peru is locked in an escalating struggle between the oligarchs and privileged classes who are determined to hold onto power at any cost and its legions of poor, voiceless and marginalized, for whom Castillo represented the possibility of something different.
Alas, it was not to be. A complete outsider in Lima, the former rural teacher was outmanoeuvred at every turn by the rabid right-wing opposition to his government in Congress. But according to Jalife, Peru is also a proxy for a much larger struggle between the world’s two geopolitical rivals, the US and China, for the control of vital strategic resources in Latin America.
The “Most Chinese Country” in Latin America
For the moment, this “war” of which Jalife speaks is rather one-sided, given that China, unlike the US, does not tend to meddle in internal politics in the region, or at least hasn’t until now. As Alexander Moldovan, a researcher on social movements and security in Latin America at York University, told Turkish state broadcaster TRT, China’s approach generally respects national sovereignty (as long as you’re not Tibetan or Taiwanese), and as such is popular among both right-wing populists and left-wing leaders alike. Instead, it lets the money do the talking.
China is already Peru’s largest trading partner on both the exports and imports side. A whopping 32% of Peru’s exports go to China, compared with just 12% to the US. In the first eight months of 2022 the total value of Peru’s exports to China grew by 3.3% — no mean feat given China’s economic slowdown resulting from Beijing’s zero Covid policies.
As Peru’s ambassador to China Luis Quesada told Dialogo China in July this year, Peru is the second largest destination for Chinese investment in Latin America, behind only Brazil. It is home to the only port in Latin America that is managed entirely by Chinese capital. An alliance of Chinese state-owned companies, including Cosco Shipping, has invested $3 billion in Chancay Port. Located 50 miles north of Lima, the port is expected to become a vital hub for trade between East Asia and South America.
Peru is also one of just three countries in the region, along with Chile and Costa Rica, that have free trade agreements (FTAs) with China, though another five, including Colombia, Panama and Uruguay, are in the process of negotiating FTAs with the Asian giant. Also, there was a clear interest on the part of Pedro Castillo’s government as well as Beijing to intensify and expand their bilateral trade. There was even talk of upgrading Peru’s FTA with China. In Quesada’s words, the Andean country must take advantage of the fact that “we are the most ‘Chinese’ country” in South America.
This probably did not go down well with Peru’s second largest trading partner, the United States, which has a long, ongoing history of organizing or lending its blessing to coups against left-leaning governments in Latin America. In 2019, the US gave its support to a right-wing coup against Bolivia’s then-President Evo Morales. According to Morales, who ended up receiving asylum in Mexico and later Argentina, the main reason for his removal from office was commercial interests in the lithium sector, including seemingly TESLA whose CEO Elon Musk famously tweeted: “We will coup whoever we want. Deal with it!”
As noted in previous pieces (including most recently here), China has made huge incursions into the US’ so-called “back yard” over the past two decades, as both a trading partner and investor.
The US continues to hold sway over Central America and, pound for pound, is still Latin America and the Caribbean’s largest trading partner. But that is predominantly due to its huge trade flows with Mexico, which account for a whopping 71% of all US-LatAm trade. As Reuters reported in June, if you take Mexico out of the equation, China has already overtaken the US as Latin America’s largest trading partner.
Over the past year or so both the US and the EU have begun refocusing their attentions on the region, often with ham-fisted attempts at diplomacy. They include the EU’s chief diplomat Josep Borrell’s remarks praising the “values” of European colonization of the Americas during a recent speech addressing European and Latin American lawmakers in Brussels.
EU and US Interest in Latin America region is on the rise as the race for lithium, copper, cobalt and other elements essential for the so-called “clean” energy transition heats up. It is a race that China has been winning prettily handily until now.
And while Peru may not form part of the Lithium Triangle (Bolivia, Argentina and Chile), it does boast significant deposits of the white metal. By one estimate, it is home to the sixth largest deposits of hard-rock lithium in the world. It is also the world’s second largest producer of copper, zinc and silver, three metals that are also expected to play a major role in supporting renewable energy technologies.
In other words, there is a lot at stake in how Peru evolves politically as well as the economic and geopolitical alliances it forms.
A “Conspicuous” Meeting
As I noted in my June 22, 2021 piece, Is Another Military Coup Brewing in Peru, After Historic Electoral Victory for Leftist Candidate?, Peru’s largest trading partner may be China but its political institutions — like those of Colombia and Chile — remain tethered to US policy interests:
Together with Chile, it’s the only country in South America that was invited to join the Trans-Pacific Partnership, which was later renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership after Donald Trump withdrew US participation.
Given as much, the rumours of another coup in Peru should hardly come as a surprise. Nor should the Biden administration’s recent appointment of a CIA veteran as US ambassador to Peru, as recently reported by Vijay Prashad and José Carlos Llerena Robles:
Her name is Lisa Kenna, a former adviser to former US Secretary of State Mike Pompeo, a nine-year veteran at the Central Intelligence Agency (CIA), and a US secretary of state official in Iraq. Just before the election, Ambassador Kenna released a video, in which she spoke of the close ties between the United States and Peru and of the need for a peaceful transition from one president to another.
A year and a half later, the presidential transition from Castillo to Boluarte has been anything but peaceful. Almost 30 lives have already been lost in the new government’s brutal nationwide crackdown on protesters.
And it seems that Kenna may have played a key role in setting things in motion. As Jalife notes in his talk, she had a “conspicuous” meeting with Peru’s Defense Minister Gustavo Bobbio Rosas on December 6, just a day day before Peru’s democratically elected left-wing President Pedro Castillo was ousted in an internal coup spearheaded by then-Vice President and now President Dina Baluarte.
A retired brigadier general from the Peruvian military, Bobbio Rosas was appointed as defense minister just one day before his meeting with Kenna and has already been replaced by Jorge Chavez Cresta, a graduate of the West Virginia National Guard and the William J. Perry Center for Hemispheric Defense Studies in Washington. According to the following tweet by Peru’s Ministry of Defense, the meeting between Kenna and Bobbio was meant to tackle “issues of bilateral interest”:
Ahora 📸 | Ministro de Defensa, Gustavo Bobbio, se reúne con la embajadora de @USEMBASSYPERU, Lisa Kenna, para abordar temas de interés bilateral. 🇵🇪🇺🇸 pic.twitter.com/9p7JuKNx75
— Mindef Perú (@MindefPeru) December 6, 2022
A Suicidal Move
At the time of this meeting, it was already known that Peru’s congress was preparing its third attempt to overthrow Castillo. A day later, Castillo sealed his own fate by declaring on national television that he was temporarily dissolving Congress just hours before the impeachment vote against him. It remains a mystery why he would make such a suicidal move given: a) he had no support from the judiciary or the military; b) he would probably have prevailed in the afternoon vote, as his advisors reportedly told him; and c) opinion polls had shown he enjoyed significantly higher levels of public support than Peru’s notoriously corrupt, oligarch-controlled Congress.
Following the TV address, Castillo’s impeachment was inevitable. On leaving the presidential palace, Castillo and his family scrambled to the Mexican consulate to apply for asylum but they were arrested en route. Castillo himself has been sentenced to 18 months of pre-trail detention on charges of, among other things, rebellion, conspiracy and abuse of authority. His two defense lawyers have resigned in recent days, raising suspicions that Castillo could be “suicided”, as some people believe happened to Peru’s former President Alan Garcia.
Castillo’s wife and children, who face no criminal charges, were released and swiftly granted asylum by the Mexican government. The Baluarte regime responded to Mexico’s “intervention” in its internal affairs by expelling Mexico’s Ambassador Pablo Monroy and declaring him persona non grata.
Naturally, the US government has lent its full support to the Boluarte regime, which from the get-go declared a nationwide “state of emergency.” The new government has so far deployed 140,000 soldiers to the streets in an attempt to crush nationwide protests. Twenty-seven protesters have so far perished in the resulting bloodbath. The protests appear to have coalesced around a number of demands:
- Boluarte’s immediate resignation
- The release of Pedro Castillo as well as full disclosure of what happened on December 7
- New elections (Peru’s Congress has committed to hold fresh general elections but not until April 2024)
- A national referendum on forming a Constitutional Assembly to replace Peru’s current constitution, which was imposed by Alberto Fujimori following his self-imposed coup of 1992.
Amid all the chaos, Jalife identifies a number of what he calls “fractals” that continue to provide some degree of stability. They include the broader economy, which boasts one of the fastest growth rates in Latin America, the financial system and the national currency. The fact that the Peruvian Sol has remained stable since Castillo’s ouster would suggest that the so-called “markets” are not exactly displeased with the recent developments.
By contrast, many governments in Latin America have criticized or even refused to recognize Peru’s unelected coup regime, including Mexico, Argentina, Bolivia, Colombia, Honduras, Venezuela, Cuba, and various Caribbean nations.* Mexico’s President Andrés Manuel Lopez Obrador (aka AMLO), who is scheduled to meet President Joe Biden on Jan 9, has even raised suspicions of US involvement in the coup.
“The first message after President Pedro Castillo’s removal came from the ambassador of the United States in Peru,” AMLO said in a recent morning press conference. “Then when they declare a state of emergency, the ambassador goes to meet with the president appointed by Congress at the [Presidential] Palace in Lima.”
Rising tensions between Peru’s new government and those governments in Latin America that refuse to recognize its legitimacy have fuelled concerns about the potential repercussions for the so-called “Pacific Alliance”, one of Latin America’s biggest trading blocs. The bloc, which was already floundering before the latest crisis in Peru, currently has four full-fledged members: Chile, Peru, Mexico and Colombia, all of whose governments were closely aligned with Washington when the trade agreement was first formed, in 2011.
Today, both Mexico and Colombia’s left-leaning governments refuse to recognize the Baluarte regime. AMLO already suspended a Pacific Alliance summit in late November due to events in Peru, most notably the Congress’ refusal to allow Castillo to travel to the event. The summyr was then scheduled to take place in Lima on December 14, but with Castillo languishing in a jail Mexico once again postponed the event.
Meanwhile, on the ground in Peru the cycle of violence continues. As Peru’s civilian institutions fight among themselves, Peru’s armed forces — the last remaining “backbone” in the country, according to Jalife — is taking firm control.
The newly appointed head of the National Directorate of Intelligence (DINI), Juan Carlos Liendo O’Connor, insists that the ongoing protests in the country are not of a social character but rather form part of a “terrorist insurgency.” A former retired colonel of Peru’s armed forces, Liendo O’Conner has also worked in the Directorate of Strategy, Policy and Plans for US Southern Command, which probably speaks to where his loyalties lie.
But doubts remain as to how long Boluarte’s government will be able to cling to power. Given her government has zero democratic legitimacy, it is unlikely to hang on until the scheduled elections in 2024. As happened with Castillo’s government, its ministers are already falling like flies.
If Boluarte herself were to fall, she would be replaced by the president of Congress, a position that has been occupied since September by José Williams Zapata, a former military general who allegedly once had ties to the Tijuana drug cartel in Mexico and is suspected of covering up the Accomarca massacre (1985), one of the most notorious examples of human rights violations by the Peruvian state during the country’s 20 years of terrorism insurgency.
* Conspicuously absent from the list are the two left-leaning governments of Chile and Brazil.
26 comments
Comments are closed.
Anyone reading this far has seen, in my opinion, a clear example
of “Fearless commentary on finance, economics, politics and power.”
Thanks, everyone, for this rare forum. The footnote re Chile and Brazil suggests, I hope, more to come!
While the tile is really compelling, there doesn’t seem to be much evidence in the piece to indicate a conflict between the US and China in Peru. Rather, this seems to follow the familiar pattern of America “waging a war” against China, while the latter goes about its business.
While Castillo was putatively de Izquierda, his actual program seemed very mild, and not specifically antagonistic to the US. While I don’t doubt that the US was deeply involved with his ouster, I don’t think this indicates any sort of competence or coherence on USA’s behalf, and consequently it doesn’t yield any benefits to the US. On the contrary it seems to be an indicator of incompetence and a lack of agency by US actors, they are driven by inertia and historical dog whistles like “Leftist”, more than any specific policy goal.
The trade figures listed above, to indicate a conflict between the US and China, aren’t the result of a specific Chinese challenge to US regional dominance. They are the result of organically grown trade relations- China has demand for LatAm goods which exceed that of the US. Additionally, China has both the financial and physical capital to develop more efficient infrastructure to manage this trade, the US seems to lack both. Aiding the corrupt Peruvian elite in their internal conflict doesn’t give the US any marginal political benefit, these people are already spiritually American (or at least DeSantis voters), and they still do and will continue to do business with China, because they pay better.
This American inability to pay, coupled with the self-inflicted diplomatic wounds of this and other meddlesome and useless interferences, will diminish future American capacity in the region. Mexico has settled comfortably into the role of our regional foil; and while Lula seems to be keeping quiet, it is because he knows Brazil is “worth a mass”, and he needs to be in power and clean house before making any proclamations.
Castillo was foolish to do what he did. He should’ve rallied his power base before starting a fight. He acted impetuously and now he and his supporters are suffering the consequences. Hopefully he won’t fall victim to any “suicides” and hopefully his people can defend Peruvian democracy and perhaps find a more a capable figure to rally behind than Profe. But Pedro Castillo only lost the presidency of Peru, something that as a born Peruvian I wouldn’t wish on anyone I cared for. On the other hand, the US continues to bare its posterior around the world, showing its ineptitude to all those would be antagonists it’s trying to intimidate.
Thank you for sharing the perspective of a Peruviano. My suspicion has been that “Profe” booted an own-goal in this circumstance. However, it’s a bad look when the U.S. places a CIA agent as ambassador and she meets with the general who is Minister of Defense the very day before “Profe” lost his mind.
Without question the Peruvian circumstance plays into the narrative that the U.S. is a “bad actor” not to be trusted as a trading partner. I think that this is the point that Jalife-Rahme is speaking to. Perhaps “Profe’s” own-goal will blow-over in terms of Peruvian politics but I’m more interested in watching how AMLO uses these events to shape Mexican politics. The U.S. has become increasingly dependent on exploiting Mexican industrial labor for cheap consumer goods. They can ill-afford for China to step-up with industrial deals that improve Mexican living standards but raise consumer prices in the U.S.
I think it is a constant feature that the US or the collective West are unable to do any business elsewhere without resulting on nearly total extraction of resources with little benefit staying in each country, if any, when you account resulting debt and interests. On the other side, China may not be very much better but if their offers are only slightly better they have an advantage over the West. An African friend of mine tells me how French investments in West Africa are highly extractive while, for instance, Russian’s have traditionally left much more of a benefit in each country (this accounts possibly for investments in gas and oil extraction). I have no real data but this seems to be the perception of the natives and perception counts. In any case other posts here at NC have shown the reality of French extracting wealth in the region.
Hugo Chavez: you will never have a coup in Washington because there’s no US embassy.
Thanks for the in depth report. Guess you can’t have a New Cold War without the US once again meddling in South American politics.
Elon Musk’s deplorable tweet about “we will coup wherever we want” speaks volumes about how the CIA is essentially the tool of American corporate interests. It recalls Alan Dulle’s words about the CIA being the “State department for unfriendly nations”. I would also recommend Multipolarista podcast that is run by Ben Norton for very good information on Latin America. He had reported about the Biden administrations appointment of Lisa Kenna and her background as a CIA agent quite a few weeks back.
With Musk it seems hard to know when he is making one of his stupid jokes. But assuming he was serious it says it all that the establishment is a lot more upset about his Twitter coup than one in Bolivia.
As with Trump you suspect their real beef is that he is saying all the things they secretly think. After all Bill and Hill were great friends of Donald until he opposed their power goals.
Musk is the billionaires’ Id.
All this talk of political leanings as being the impetus for actions in foreign lands – defending democracy, and moral high ground, shining beacon of freedom etc. – I have had enough of our US politicians proclaiming how virtuous they are in protecting me and keeping me safe from demons abroad and at home and to trust their superior abilities, trust – Our findings remain intact for alternative definitions of trust..
“A highwayman is as much a robber when he plunders in a gang as when single; and a nation that makes an unjust war is only a great gang.” -Benjamin Franklin.
So US foreign policy don’t give a crack about democracy or freedom yet they tell me they do. They don’t seem to know that the simple citizen I am knows freedom and loves this Constitution and by that knowledge am quite disagreeable to some dictator or other ruler trying to take that away from me in this land – I suspect our politicians just don’t think me capable of thwarting tyranny whence it comes looking for me.
So just be honest – its about obtaining resources on the cheap while keeping populations abroad as bond servants to the USA. Give em more cash to put em in debt so that they have to sell their natural resources and labor to us as a form of repayment of the deliberate allocation of funds. Well anyway, it only benefits serves as entrenchment of the financial wars that have been going on for decades.
Sorry about the open ended rant
“They can ill-afford for China to step-up with industrial deals that improve Mexican living standards but raise consumer prices in the U.S.” Oh, I so hope they do. “An African friend of mine tells me how French investments in West Africa are highly extractive while, for instance, Russian’s have traditionally left much more of a benefit in each country.” Oh, thought he was Hitler. “Interest in Latin America region is on the rise as the race for lithium, copper, cobalt and other elements essential for the so-called “clean” energy transition heats up.” On course for neocons and the west.
“Renewable” and “clean” – words that are being stripped of their meaning like the environment around these mines will be stripped of its life.” More indigenous homelands are threatened as we pontificate.
“When I hear about mining in South America, one of the first things I remember are the horrors told about Potosi, Bolivia beginning around the 17th Century. People used to maim their children so that they couldn’t be forced by the corporations and associated goons or by circumstance to work in the mines.”
and then there’s this: “I am guessing that Pedro Castillo was told to resign or have his family killed.”
TomDority, I think you right on with your rant. What I don’t know is what to do about these “truths” that you and I agree upon, and how to change the world into a better place for all. I think alternative media, like this site, full of journalists impassioned to speak truth to power and are making a difference in our collective awareness of what is truly happening in our world. My hope is that they reach enough people in time.
(as long as you’re not Tibetan or Taiwanese),
Or Alaska, Hawaii, Puerto Rico, Guantanamo Bay, ….. then there’s places like the Ryukyu that are give to proxies.
Or Golan Heights, or Western Bank, or eastern 1/3 of Syria, or Kosovo, or Crimea, or Western Sahara, or Socotra Island, etc…
Amen, Every time I start making the list I get depressed after 30 minutes and give up.
Interesting that Peru is a signatory to the TPP and China is their biggest trading partner. Wasn’t limiting China the raison d’etre of the TPP? If the US were to become a signatory to the TPP would that result in the US depositioning China as Peru’s largest trading partner?
The raison d’etre of the TPP was the creation of the anti-democratic-self-rule Investor State Dispute Korporate Kangaroo Kourts to torture democratic jurisdictions within TPP states into permitting foreign corporate exploitation, pollution, etc. It was also for various kinds of near-infinite “intellectual property rights” protection for corporations. I can’t remember what its other raison’s d’etre were.
“Limiting China” was invoked as an Eleventh Hour excuse to try rallying Americans into supporting TPP on the bogus excuse that it was to “limit China”. Enough Americans saw through that to where the notorious liar Barack Obama was not able to convince enough of his audience into believing he even cared about “limiting China” to trick us into supporting his TPP.
> Is Another Military Coup Brewing in Peru, After Historic Electoral Victory for Leftist Candidate?,
Good call.
Thanks Lambert. If you throw enough darts, every now and then you’ll hit the target ;-]
“EU and US Interest in Latin America region is on the rise as the race for lithium, copper, cobalt and other elements essential for the so-called “clean” energy transition heats up. It is a race that China has been winning prettily handily until now.
And while Peru may not form part of the Lithium Triangle (Bolivia, Argentina and Chile), it does boast significant deposits of the white metal. By one estimate, it is home to the sixth largest deposits of hard-rock lithium in the world. It is also the world’s second largest producer of copper, zinc and silver, three metals that are also expected to play a major role in supporting renewable energy technologies.”
“Renewable” and “clean” – words that are being stripped of their meaning like the environment around these mines will be stripped of its life.
When I hear about mining in South America, one of the first things I remember are the horrors told about Potosi, Bolivia beginning around the 17th Century. People used to maim their children so that they couldn’t be forced by the corporations and associated goons or by circumstance to work in the mines.
When we speak of the “soul” of Peru, which “soul” are we talking about? The Spanish settler descendant “soul” or the Andean Indigenous “soul”?
I suppose the Spanish Settler soul might feel it needs to choose between China or America for whatever the reasons. But what could Chinamerica possibly offer the Andean Indigenous soul?
” Anti-colonialism” is often invoked by one set of colonialists against another. Bolsonaro is one of the purest expressions of white settler racist colonialism in Brazil. But he accused various Americans of “colonialism” for opposing his program of white settler racist colonial genocide and ecocide against the Amazon, for example.
and the free trading dim wits will simply offshore the production from the raped south american commodities to china anyways, thinking they will still be in full control.
after all, can’t have unions and environmental laws interfering with the free markets can we.
its simply a waiting game for china now. in the end, they will win. the free traders know this, its why hillary proclaimed we will ring them in with missils till they know their place.
Come, come! Neither Tibet nor Taiwan has been recognized as a nation, whether by the UN or individual nations.
Tibet has been part of China longer than Wales has been part of the UK.
Both the ROK and the PRC insist that they are indivisible from ‘China’.
It’s just that they disagree on who runs the show.
It’s a boardroom squabble, like ARM vs. ARM China.
If Peru truly wants to be a democratic independent sovereign nation it will make the correct decision!
….I am guessing that Pedro Castillo was told to resign or have his family killed.
My thoughts as well!!
Hey Nick, I don’t know if you saw this article in Reuters. The election in Paraguay is coming up in April and there is US/China competition at play:
https://www.reuters.com/world/americas/paraguay-election-race-puts-taiwan-ties-knife-edge-2023-01-05/
7Nick, here’s another article I came across regarding us/china competition in South America. This article comes from America’s quarterly, which is definitely a us-led publication and the person being interviewed was the Finance Minister under Chile’s recent neoliberal government.
https://www.americasquarterly.org/article/aq-podcast-how-chinas-presence-in-latin-america-is-changing/
PS, I had to laugh at the advocacy of the interviewee for the US to join the reconstructed version of the TPP so that it could have more influence in Latin America!
Always be selling! Am I right?