Washington's Antilles energy diversification initiative moves forward

Given the success of Venezuela's oil diplomacy in the Caribbean countries (the islands account for 13 of the 35 votes in the OAS), the United States launched its own initiative in 2014 so that these small states have greater energy diversity and do not depend on Venezuelan crude. The Maduro regime's financial difficulties have reduced Chavista influence in the Caribbean, but Trump is also cutting back on U.S. aid. Diversification of energy sources, however, is moving forward because it is a real need for the islands.

▲ The tourism boom increases electricity consumption in the Caribbean islands, where there are hardly any energy sources of their own.

article / María F. Zambrano

In the Caribbean islands, energy security is at the center of national strategic concern, due to their high dependence on fossil fuels, mostly imported. Energy security is the focus where the geopolitical, diplomatic and economic interests of these small states converge, and not only of them: the great vulnerability due to the lack of their own energy sources was taken into account by Venezuela to promote the Petrocaribe cooperation agreement in 2005, which gave it great influence in the Antilles; since 2014, the United States has been trying to counteract that program with the Caribbean Energy Security Initiative (CESI), launched by the Obama Administration.

The rivalry between the two energy diplomacy initiatives will not really be settled by a political pulse between Caracas and Washington, but by the real need of the Caribbean islands to diversify their energy sources. This will reduce Venezuela's influence in the region and open the way for the U.S. offer, focused precisely on promoting alternative sources.

The main risk to national security in the Antilles lies in the high costs of Caribbean electricity. On the one hand, the islands have replaced historically agricultural economies with others driven by tourism, which forces them not only to meet the needs of their citizens but also to rely on the fixed cost of an industry with high levels of electricity consumption. On the other hand, production does not have diversified generation Structures . With the exception of Trinidad and Tobago, Suriname and Belize, the islands are supplied by oil as the only installed production capacity; in addition, 87% of primary energies (basically crude oil) are imported. We are facing a problem of high consumption and another of oil dependence.

In view of this status, and given the demands posed by energy security, understood as the physical protection of infrastructure and also the effort to guarantee the continuity of supply, Petrocaribe became a clear option for Antillean interests. Generous financing credits -from 5% to 70% for a 25-year period- contributed to the extension of the program. During the first 10 years of Petrocaribe's existence, agreement to data from the Latin American and Caribbean Economic System (SELA), Venezuela covered on average 32% of the energy demand of the participating States; the Dominican Republic, Jamaica, Nicaragua and Haiti received 87% of the supplies. The agreement also involved investments in the islands' refineries, which increased their processing capacity: up to 135,000 barrels of crude oil per day between the Cuban Camilo Cienfuegos refinery (65,000), the refinery near Jamaica's capital (36,000) and the Dominican Petroleum refinery (34,000).

The alliance alleviated the rise in crude oil prices for these countries, but the region was left in the hands of the volatility of market prices and those of the main supplier. A November 2017 IMFreport estimates that real crude oil price movements affect GDP growth in the Caribbean by 7%, with wide variations by country: 15% in Dominica, 9% in Jamaica and less than 1% in Guyana. At the same time, the continued drop in Venezuela's production, which began to allocate fewer barrels to Petrocaribe, left the area predisposed to new approaches to reduce its exhibition to market shocks.

Caribbean Energy Security Initiative

This expectation was addressed in a new energy security framework that sought to increase independence and reduce vulnerability through diversification. Taking advantage of the steep drop in crude oil prices in 2014, which relaxed energy costs for the islands and gave them more room to maneuver, Washington launched the Caribbean Energy Security Initiative (CESI). The program has focused on supporting countries in diversifying electricity generation, addressing their significant renewable energy potential. Thus, through CESI, US$2 million in technical support has been allocated to C-SERMS (Caribbean Sustainable Energy Roadmap and Strategy), a roadmap developed by CARICOM's energy policy division. This roadmap had already harmonized the goals of the 15 member states with subject to energy efficiency and the implementation of renewable energies: two strategies that sought to solve the problems previously mentioned.

The Inter-American development Bank (IDB) estimated that for the implementation of the C-SERMS roadmap, the Caribbean energy sector would require an investment of 7% of the regional GDP between 2018 and 2023. Countries with stronger financial sectors would have the capacity to finance the projects without altering debt sustainability, with these projects being self-financed over a 20-year period.

In the framework of the U.S. initiative, energy efficiency was materialized in the CHEER program (Caribbean Hotel Energy Efficiency and Renewables program), which has provided technical attendance to the hotel industry, the main source consumption. However, in this field, the IMF urges the implementation of broader public policies to further reduce oil imports and increase GDP in the long term.

In the implementation of renewable energy, the U.S. Overseas Private Investment Corporation (OPIC) has promoted infrastructure with public-private financing. Among other projects, it financed the construction of a 36 MW wind power plant and a 20 MW solar power plant, both inaugurated in 2016 in Jamaica. These projects also have macroeconomic influences on reducing dependence on crude oil; in the case of Jamaica, however, dependence has been decreased mainly by the expansion of natural gas receiving capacity, which has allowed that country a reduction from 97% to 80% dependence on imported oil (in fact, it no longer imports Venezuelan crude oil). Since 2016, the business New Fortress Energy has been working on the submission of liquefied natural gas to the Bogue plant in Jamaica.

Since its launch, OPIC has financed up to $120 million in energy agreements. To this must be added those promoted by the CEFF-CCA fund, also from the U.S. Government, which provided $20 million non-refundable for projects in initial phases; in 2015 the "Clean Energy in the Caribbean" project began, with a duration of five years and with special incidence in Jamaica.

Venezuela... and Trump's clippings

The U.S. initiative for energy diversification in the Caribbean had its response from Venezuela. In 2015, Petrocaribe held a special summit where it quadrupled the ALBA Caribe fund, raising it from $50 million to $200 million, destined to finance mainly social projects, along the lines of what Javier Corrales and Michael Penfold have called "social power diplomacy". However, Venezuela's severe economic crisis and the reduced finances of its national oil company, PDVSA, have forced the government of Nicolás Maduro to cut back on Venezuelan oil diplomacy.

For its part, the arrival of the Trump Administration has led to a significant decrease in the investment earmarked for CESI. In the framework of a generalized cutback in financial aid programs abroad, Washington reduced to $4.3 million the amount earmarked to promote new sources of energy in the Caribbean.

The United States, in any case, is not the only one trying to occupy the energy space previously filled by Venezuela. In 2015, the Renewable Energy and Efficient Energy Center was inaugurated in Barbados, promoted by UNID (United Nations Industrial Development Organization) with the support of Austrian and German funds. In addition, last year Russia made fuel shipments to Cuba, replacing supplies that Venezuela had not been able to cover.

High levels of corruption and impunity in the region make it difficult to eradicate millionaire bribes in public procurement contracts

The confession of the construction and engineering company Odebrecht, one of the most important in Brazil, of having delivered large sums as bribes to political leaders, parties and public officials for the awarding of works in several countries in the region has been the biggest corruption scandal in the history of Latin America. The budget B during the "golden decade" of raw materials occurred in a framework of little improvement in the effectiveness of the rule of law and control of corruption, which led to high levels of illicit deviations in public contracts.

article / Ximena Barría [English version].

Odebrecht is a Brazilian company that conducts business in multiple industries through several operating sites. It is engaged in areas such as engineering, construction, infrastructure and energy, among others. Its headquarters in Brazil are located in the city of Salvador de Bahia. The business operates in 27 countries in Latin America, Africa, Europe and the Middle East. Over the years, the construction company has participated in public works contracts in most Latin American countries.

In 2016, the U.S. department Justice published an research alleging that the Brazilian company had bribed public officials in twelve countries, ten of them Latin American: Argentina, Brazil, Colombia, Ecuador, Guatemala, Mexico, Panama, Peru, Dominican Republic and Venezuela. The research was developed from the confession made by Odebrecht's top executives themselves once they were discovered.

The company provided officials in these countries with millions of dollars in exchange for obtaining public works contracts and benefiting from the payment for their execution. The business agreed to submit millions of dollars to political parties, public officials, public candidates or persons related to the government. Its purpose was to have a competitive advantage that would allow it to retain public business in different countries. 

In order to cover up these illicit capital movements, the business created fictitious corporations in places such as Belize, the Virgin Islands and Brazil. The business set up a secret financial structure to cover up these payments. The research by the U.S. department Justice established that the bribes in the aforementioned countries totaled US$788 million (almost half in Brazil alone). Using this illegal method, contrary to all business and political ethics, Odebrecht obtained the commission of more than one hundred projects, which generated profits of US$ 3,336 million.

Lack of an effective judiciary

This matter, known as the Odebrecht case, has created consternation in Latin American societies. Its citizens consider that in order for acts of this subject not to go unpunished, countries must have greater efficiency in the judicial sphere and take more accelerated steps towards a true rule of law. 

agreement World Bank indicators, none of the ten Latin American countries affected by this bribery network reaches 60% of effectiveness of the rule of law and corruption control. This would explain the success of the Brazilian construction company in its bribery policy.

Judicial independence and its effectiveness is essential for the resolution of facts of these characteristics. The proper exercise of justice shapes a proper rule of law, preventing the occurrence of illicit acts or other political decisions that may violate it. Although this is the ideal, the countries involved in the Odebrecht case do not fully comply with this due judicial independence.

Indeed, according to the Global Competitiveness Report for 2017-2018, most of the affected countries obtain a leave grade with respect to the independence of their courts, which indicates that they lack an effective judiciary to judge those allegedly involved in this case. This is the case, for example, with Panama and the Dominican Republic, ranked 120th and 127th, respectively, in terms of judicial independence, out of a list of 137 countries.

One of the problems that the Judicial Branch of the Republic of Panama suffers from is the high issue of cases handled by the Supreme Court of Justice. This congestion makes it difficult for the Supreme Court to work effectively. The high number of processed files doubled between 2013 and 2016: the Criminalconference room of the Court processed 329 files in 2013; in 2016 there were 857. Although the Panamanian Judiciary has improved its budget, this has not represented a qualitative increase in its functions. These difficulties could explain the Court's decision to reject an extension of the research, although this could mean a certain impunity. In 2016, only two people were arrested in the Odebrecht case. In 2017, of the 43 defendants who could have been involved in the acceptance of bribes valued at US$60 million, only 32 were prosecuted.

The Dominican Republic is also in a similar status . According to a survey of 2016, only 38% of Dominicans trust the judicial institution. This low percentage may have been contributed to by the fact that active members of political parties were elected to serve as Supreme Court judges, something that tarnishes the credibility of the judiciary and its independence. In 2016, the Dominican courts only inquired about one person, when the US Supreme Court estimated that the Brazilian business had given US$92 million in political bribes, one of the highest amounts outside Brazil. In 2017, the Supreme Court of the Dominican Republic ordered the release from prison of 9 of 10 allegedly implicated in the case due to insufficient evidence.

Need for greater coordination and reform

In October 2017, public prosecutors from Latin America met in Panama City to share information on money laundering, especially in relation to the Odebrecht case. Officials expressed the need to leave no case unpunished, thereby contributing to solving one of the biggest political, economic and judicial problems in the region. Some prosecutors reported having suffered threats in their investigations. All of them valued the meeting positively, as it highlighted the need for greater fiscal coordination and legislative harmony in Latin America. However, it is important to note that the Dominican Republic was absent from the meeting.

Any awareness of Latin American public ministries is essential given the correlation observed between the countries affected by Odebrecht's bribes and their poor ranking in indexes provided by different international organizations and research centers. The ineffective rule of law and the lack of control of corruption allow companies like Odebrecht to succeed in their bribery policy to gain a competitive advantage. 

The shortcomings of the judicial systems in countries such as Panama and the Dominican Republic, in particular, may make it possible for public officials to go unpunished for crimes committed. In addition, the Odebrecht case, of great magnitude in the region, could further congest judicial activity if effective reforms are not made in each country. 

The constant expansion of the crop in Mercosur countries has led them to exceed 50% of world production.

Soybean is the agricultural product with the highest commercial growth in the world. The needs of China and India, major consumers of the fruit of this oleaginous plant and its derivatives, make South America a strategic granary. Its profitability has encouraged the extension of the crop, especially in Brazil and Argentina, but also in Paraguay, Bolivia and Uruguay. Its expansion is behind recent deforestation in the Amazon and the Gran Chaco. After hydrocarbons and minerals, soybeans are South America's other major subject .

article / Daniel Andrés Llonch [English version].

Soybean has been cultivated in Asian civilizations for thousands of years; today its cultivation is also widespread in other parts of the world. It has become the most important oilseed grain for human consumption and animal feed. With great nutritional properties due to its high protein content, soybean is marketed both as a grain and in its oil and meal derivatives.

Of the eleven largest soybean producers, five are in South America: Brazil, Argentina, Paraguay, Bolivia and Uruguay. In 2016, these countries were the origin of 50.6% of world production, which totaled 334.8 million tons, according to FAO data . The leading producer was the United States (34.9% of world production), followed by Brazil (28.7%) and Argentina (17.5%). India and China follow on the list, although what is significant about the latter country is its large consumption, which in 2016 forced it to import 83.2 million tons. A large part of these import needs are covered from South America. South American production is centered in the Mercosur nations (in addition to Brazil and Argentina, also Paraguay and Uruguay) and Bolivia.

Strong international demand and the high relative profitability of soybeans in recent years have fueled the expansion of soybean cultivation in the Mercosur region. The commodity price boom, in which soybeans also participated, led to profits that were directed to the acquisition of new land and equipment, allowing producers to increase their scale and efficiency.

In Argentina, Bolivia, Brazil and Paraguay, the area planted with soybean is the majority (it constitutes more than 50% of the total area planted with the five most important crops in each country). If to the group we add Uruguay, where soybean has enjoyed a later expansion, we have that the production of these five South American countries has gone from 99 million tons in 2006 to 169.7 million in 2016, which constitutes an increase of 71.2% (Brazil and Bolivia have almost doubled their production, somewhat surpassed by Paraguay and Uruguay, a country where it has tripled). In the decade, this area of South America has gone from contributing 44.7% of world production to account for 50.6%. In that time, the cultivated area increased from 40.6 million hectares to 58.4 million hectares.

Countries

As the second largest soybean producer in the world, Brazil reached in 2016 a production of 96.2 million tons (28.7% of the world total), with a cultivated area of 33.1 million hectares. Its production has known a constant increase, so that in the last decade the Issue of the crop has increased by 83.5%. The leap has been especially significant B the last four years, in which Brazil and Argentina have experienced the highest rate of increase in the crop, with an annual average of 936,000 and 878,000 hectares, respectively, agreement to the United States department Agriculture (USDA).

Argentina is the second largest producer in Mercosur, with 58.7 million tons (17.5% of world production) and a cultivated area of 19.5 million hectares. Soybean began to be planted in Argentina in the mid 1970s, and in less than 40 years it has made unprecedented progress. This crop occupies 63% of the areas of the country planted with the five most important crops, compared to 28% of the area occupied by corn and wheat.

Paraguay, meanwhile, had a 2016 harvest of 9.1 million tons of soybeans (2.7% of world production). In recent seasons, soybean production has increased as more land has been allocated to soybean cultivation. agreement to the USDA, over the past two decades, land devoted to soybean cultivation has increased steadily by 6% per year. There are currently 3.3 million hectares of land dedicated to soybean cultivation in Paraguay, which constitutes 66% of the land used for the main crops.

In Bolivia, soybeans are grown mainly in the Santa Cruz region. According to the USDA, it accounts for 3% of the country's Gross Domestic Product, and employs 45,000 workers directly. In 2016, the country harvested 3.2 million tons (0.9% of world production), on an area of 1.3 million hectares.

Soybean plantations occupy more than 60 percent of the arable land in Uruguay, where soybean production has been increasing in recent years. In fact, it is the country where production has grown the most in relative terms in the last decade (67.7%), reaching 2.2 million tons in 2016 and a cultivated extension of 1.1 million hectares.

Increased demand

Soybean production represents a very important fraction of the agricultural GDP of South American nations. The five countries mentioned above, together with the United States, account for 85.6% of global production, making them the main suppliers of the growing world demand.

This production has experienced a progressive increase since its insertion in the market, with the exception of Uruguay, whose expansion of the product has been more recent. In the period between 1980 and 2005, for example, total world soybean demand expanded by 174.3 million tons, or 2.8 times. During this period, the growth rate of global demand accelerated from 3% per year in the 1980s to 5.6% per year in the last decade.

In all the South American countries mentioned above, soybean cultivation has been especially encouraged, due to the benefits it brings. Thus, in Brazil, the largest regional producer of the oleaginous grain, soybeans contribute revenues estimated at 10 billion dollars in exports, representing 14% of the total products marketed by the country. In Argentina, soybean cultivation went from representing 10.6% of agricultural production in 1980/81 to more than 50% in 2012/2013, generating significant economic benefits.

The outlook for growth in demand suggests that production will continue to rise. The Food and Agriculture Organization of the United Nations estimates that global production will exceed 500 million tons in 2050, which is double the Issue harvested in 2010. Much of this demand will have to be met from South America.

Continental U.S. neighbors are having a hard time interpreting the first year of the new Administration.

Donald Trump arrives at his first anniversary as president having sparked some recent fires in Latin America. His rude disregard for El Salvador and Haiti, for the Issue of refugees welcomed in the United States, and his intemperate attention to Colombia for the increase in cocaine production worsen relations that, although already complicated in the case of Mexico, have had some good moments throughout the year, such as the dinner of presidents that Trump convened in September in New York in which a united action on Venezuela was outlined.

▲Trump, on completing 100 days as president [White House].

article / Garhem O. Padilla [English version].

One year after the arrival of the 45th President of the United States of America, Donald John Trump, to the White House -the inauguration ceremony was on January 20-, controversy dominates the balance of the new Administration, both in its domestic and international performance. The continental neighbors of the U.S., in particular, show bewilderment over Trump's policies toward the hemisphere. On the one hand, they regret the U.S. disinterest in commitments to economicdevelopment and multilateral integration; on the other, they note some activity in relation to some regional problems, such as Venezuela. The balance for the moment is mixed, although there is unanimous agreement that Trump's language and many of his manners rather threaten relations.

From TPP to NAFTA

In the economic field, the Trump era began with the final withdrawal of the United States from the Trans-Pacific Partnership agreement (TPP) on January 23, 2017. This made it impossible for the TPP to entrance into force, as the United States was the market for which the agreement emerged, which has affected the prospects of the Latin American countries that participated in the initiative.

The renegotiation of the North American Free Trade Agreement (NAFTA), demanded by Trump, was immediately opened. Doubts about the future of NAFTA, signed in 1994 and which Trump has described as a "disaster", have been prominent so far in his administration. Some of his demands, which Mexico and Canada oppose, are to increase the quota for products manufactured in the United States and the "sunset" clause, which would oblige the treaty to be reviewed methodically every five years and would cause it to be suspended if any of its three members were not in agreement. All of this stems from the U.S. president's idea of fail the treaty if it is not favorable to his country. 

Cuba and Venezuela

If the quarrels with Mexico have not yet reached a conclusion, in the case of Cuba Trump has already retaliated against the Castro regime, with the expulsion in October of 15 Cuban diplomats from the Cuban embassy in Washington as a response to the "sonic attacks" that affected 24 U.S. diplomats on the island. The White House has also reversed some of the Obama Administration's conciliatory measures, when it realized that Castroism is not responding with open-minded concessions.

As far as Venezuela is concerned, Trump has made forceful efforts to introduce measures and sanctions against corrupt officials, in addition to addressing the political status with other countries, so that they support those efforts aimed at eradicating the Venezuelan crisis, thus generating multilateralism among American countries. However, this policy has its detractors, who believe that the sanctions are not intended to achieve a long-term goal , and it is unclear how they would promote Venezuelan stability.

Although in these actions on Cuba and Venezuela Trump has alluded to the democratic principles violated by the rulers of Havana and Caracas, his Administration has not particularly insisted on the commitment to human rights, democracy and moral values, as had been usual in the argumentation of U.S. foreign policy. Some critics point out that the Trump Administration is willing to promote human rights only when they fit its political objectives.  

This could explain the worsening opinion in Latin America about the United States and relations with that country. agreement to theLatinobarómetro 2017 survey , the favorable opinion has fallen to 67%, seven points below the 74% at the end of the Obama Administration. This survey sample a relevant difference for Mexico, one of the countries that, without a doubt, has the worst levels of favorable opinion towards the Trump Administration: in 2017 it was 48%, a drop of 29 points compared to 2016, when it was 77%.

Immigration, withdrawal, decline

The restrictive immigration policies applied would also explain the rejection of the Trump Administration by Latin American public opinion. In the immigration section , the most recent is the decision not to renew the authorization to stay in the United States of thousands of Salvadorans and Haitians, who once arrived fleeing calamities in their countries.

It is also worth mentioning Trump's efforts to achieve one of his main objectives since the beginning of his political campaign: to build a border wall with Mexico. The U.S. president has not been very successful so far in this goal, since despite having sought ways to finance it, what he has managed to introduce in the budgets is very insignificant in relation to the estimated costs. On the other hand, his decision

Trump's protectionism entails a retreat that may be accentuating the decline of the United States as a leader in Latin America, especially vis-à-vis other powers. China has been increasing its economic and political engagement in countries such as Argentina, Brazil, Chile, Peru and Venezuela. Russia, for its part, has strengthened its diplomatic and security relations with Cuba. It could be said that, taking advantage of the conflicts between the island and the United States, Moscow has sought to keep it in its orbit through a series of investments.

Security threats

This brings us to the new US National Security Strategy, announced in December. The document, presented by Trump, addresses the rivalry with China and Russia, and also refers to the challenge posed by the Cuban and Venezuelan regimes, because of the alleged security threats they pose and the Russian support they receive. Trump expressed his strong desire to see Cuba and Venezuela join in "shared freedom and prosperity" and called for "isolating governments that refuse to act as responsible partners in advancing hemispheric peace and prosperity.

Similarly, the new U.S. Security Strategy alludes to other challenges in the region, such as transnational criminal organizations, which impede the stability of Central American countries, especially Honduras, Guatemala and El Salvador. However, the document devotes only one page to Latin America, in line with Washington's traditional focus on the areas of the world that most affect its interests and security.

An opportunity for the United States to get closer to Latin American countries will be the Summit of the Americas, to be held next March in Lima. However, nothing is predictable given the President's characteristic attitude, which leaves a great deal of room for possible surprises.

Latin American Economics cycles are closely linked to mineral prices: the graphs are astounding

Public attention on the price of commodities is often focused on hydrocarbons, preferably oil, because of the direct consequences on consumers. But although Latin America has major crude oil producers, minerals are a more cross-cutting asset in the region's Economics , especially in South America. This is demonstrated by the largely parallel lines that follow the evolution of non-energy minerals and GDP growth, both in times of boom and bust.

article / Ignacio Urbasos Arbeloa [English version].

Mining is a fundamental activity for many Latin American economies. The sector has an enormous weight in exports and foreign investment, making it one of the main sources of foreign exchange. In contrast to the general perception of non-energy mining as a mature industry, the sector is still attractive to investors and capable of continuing to generate employment and wealth. Latin American mining receives 30% of the world's investment in the sector, which expects a recovery in prices. The impact of these fluctuations has direct consequences on the economies of the continent, some of which are highly dependent on the exploitation and sale of these resources. The goal this analysis is to articulate a convincing explanation of the Degree to which these price variations affect national GDPs.

First of all, it is important to detail the chronological evolution of prices of the main minerals exploited in Latin America. The general trend in commodity prices over the last two decades has been marked by enormous volatility. The so-called commodity super cycle [1] given approximately between 2003 and 2013, with a setback between 2008 and 2009, occurs at the same time as the so-called golden decade in Latin America. This status was produced by an unprecedented rise in world demand, thanks to emerging countries led by China, which has transformed foreign trade in the region, displacing the USA as the main partner of many of these countries.

The evolution of prices has followed a very similar patron saint in non-energy mining, which rule follows the price trends of the rest of the commodities. As we can see in Figure 1.1, the Latin American and Caribbean region has had an economic growth very similar to the average evolution of gold, silver, tin, nickel, lead and copper prices. It is important to mention that the relationship between these two variables is not isolated, and should be analyzed in the above-mentioned context of a general rise in the prices of other raw materials of vital importance for the region, such as hydrocarbons or agricultural products. 

The case of Chile can be extremely useful. Chile has an Economics particularly specialized in non-energy mining, highlighting the exploitation of copper, an activity in which it is a world leader and which accounts for 50% of its exports. The mining sector in Chile [2] reached almost 20% of GDP in the mid-2000s; in 2017 it has accounted for around 9%. In Figure 1.2 we see how the price of copper sets the country's economic path, with the greatest periods of Chilean economic growth coinciding with the increase in copper prices. Despite being one of the most developed economies in the region [3], with a 74% weight of the services sector in GDP, the country is still conditioned by the situation of its primary sector and specifically mining.

Another interesting case is Peru, a country whose exports include a good share of non-energy minerals [4], reaching 46% of exports in the case of gold (18%) and copper (26%). Similarly to Chile, the share of mining in Economics is 15% of GDP. Again, we can appreciate the correlation between the prices of certain strategic non-energy minerals and economic growth.

This relationship is logical and responds to several realities. On the one hand, the great quantitative value of raw materials in Latin American economies, which concentrate their exports in agricultural, mineral and energy products. On the other hand, its qualitative importance, since the sector generates large amounts of employment (up to 9% in Chile), is the object of many of the main companies in the region (5 of the 20 largest in Latin America are dedicated to extraction), is the main source of foreign exchange and leaves enormous benefits for the coffers of the States, since they are governed under a particular tax system more burdensome. Likewise, a large part of the payment of foreign debt is covered by these revenues, and price instability could bring back the ghosts of the debt crisis of the eighties, something that is already a reality in the case of Venezuela.

Although the countries of Latin America cannot be analyzed as a heterogeneous unit, in general terms the region does face a common challenge : to be able to reduce the dependence of its economies on the exploitation and export of raw materials. This activity has problematic elements such as its impact on the environment, a particularly complex issue in the region due to the reluctance of indigenous groups, or the quality and stability of the employment generated. In any case, industrial development in the region continues to be deficient and there are more and more voices warning that the golden decade of 2003-2013 was not used to make the necessary structural changes to mitigate this status [5].

The existence of complex partner realities in Latin America has often led to the use of the benefits derived from extraction in short term and electoral politics, a blight that increases the exhibition of social welfare to the ups and downs of the mining and energy sector. Although commodity price predictions point to an imminent recovery [6], a status similar to that of around 2008, when prices reached historic highs, is not expected. This new situation will demand the maximum from Latin American economies, which will not have such a favorable international Economics status .

Russia's GLONASS positioning system has placed ground stations in Brazil and Nicaragua; the Brazilian ones are accessible, but the Nicaraguan one is open to conjecture.

At a time when Russia has declared its interest in having military facilities in the Caribbean again, the opening of a Russian station in the Managua area has raised some suspicions. Roscosmos, the Russian space agency, has opened four stations in Brazil, managed with transparency and easy access; in contrast, the one it has built in Nicaragua is shrouded in secrecy. The little that is known about the Nicaraguan station, strangely larger than the others, contrasts with how openly data can be gathered about the Brazilian stations.

article / Jakub Hodek [English version].

It is well known that information is power. The more information one has and manages, the more power one enjoys. This approach should be taken when examining the station facilities that support the Russian satellite navigation system and their construction in close proximity to the United States. Of course, we are no longer in the Cold War period, but some traumas of those old days can perhaps help us to better understand the cautious position of the United States and the importance Russia sees in having its facilities in Brazil and especially in Nicaragua.

This historical background of the Cold War is at the origin of the two major navigation systems we use today. The United States launched the Global Positioning System (GPS) project in 1973, and possibly in response, the Soviet Union introduced its own positioning system (GLONASS) three years later. [ 1] Almost 45 years have passed, and these two systems no longer serve the purpose of Russians and Americans trying to obtain information about the opposing side, but are collaborating and thus providing a more accurate and faster navigation system for consumers who purchase a smartphone or other electronic device. [2]

However, to achieve global coverage both systems need not only satellites, but also ground stations strategically located around the world. For this purpose, the Russian Federal Space Agency Roscosmos has erected stations for the GLONASS system in Russia, Antarctica and South Africa, as well as in the Western Hemisphere: it already has four stations in Brazil and since April 2017 it has one in Nicaragua, which due to the secrecy surrounding its function has caused mistrust and suspicion in the United States [3] (USA, for its part, has ground stations for GPS in its territory and in Australia, Argentina, Argentina, the United Kingdom, the United States and the United States), for its part, has GPS ground stations in its territory and in Australia, Argentina, United Kingdom, Bahrain, Ecuador, South Korea, Tahiti, South Africa and New Zealand).

The Russian Global Navigation Satellite System(Globalnaya Navigatsionnaya Sputnikovaya Sistema or GLONASS) is a positioning system operated by the Russian Aerospace Defense Forces. It consists of 28 satellites, allowing real-time positioning and speed data for surface, sea and airborne objects around the world. [ 4] In principle GLONASS does not transmit any staff identification information; in fact, user devices only receive signals from the satellites, without transmitting anything back. However, it was originally developed with military applications in mind and carries encrypted signals that are supposed to provide higher resolutions to authorized military users (same as US GPS). [5]

In Brazil, there are four ground stations used to track signals from the GLONASS constellation. These stations serve as correction points in the western hemisphere and help to significantly improve the accuracy of navigation signals. Russia is in close and transparent partnership with the Brazilian space agency (AEB), promoting research and development of the South American country's aerospace sector.

In 2013, the first station was installed, located on the campus of the University of Brasilia, which was also the first Russian station of that subject abroad. It was followed by another station at the same location in 2014, and then, in 2016, a third one was placed at the Federal Institute of Education Sciences and Technology of Pernambuco, in Recife. The Russian Federal Space Agency Roscosmos built its fourth Brazilian station on the territory of the Federal University of Santa Maria, in Rio Grande do Sul. In addition to fulfilling its main purpose of increasing the accuracy and improving the performance of GLONASS, the facility can be used by Brazilian scientists to carry out other types of scientific research . [6]

The level of transparency that surrounded the construction and then prevailed in the management of the stations in Brazil is definitely not the same applied to the one opened in Managua, the capital of Nicaragua. There are several pieces of information that sow doubts regarding the real use of the station. To begin with, there is no information on the cost of the facilities or on the specialization of the staff. The fact that it is located a short distance from the U.S. Embassy has given rise to speculation about its use for eavesdropping and espionage.

In addition, the vague answers from representatives of Nicaragua and Roscosmos about the use of the station have failed to convey confidence about the project. It is a "strategicproject " for both Nicaragua and Russia, concluded Laureano Ortega, the son of the Nicaraguan president. Both countries claim to have a very fluid and close cooperation in many spheres, such as in projects related to health and development, however none of them have materialized with such speed and dedication. [7]

Given Russia's increased military presence in Nicaragua, empowered by the agreement facilitating the docking of Russian warships in Nicaragua announced by Russian Defense Minister Sergei Shoigu during his visit to the Central American country in February 2015, and also concretized in the donation of 50 Russian T-72B1 tanks in 2016 and the growing movement of Russian military staff , it can be concluded that Russia clearly sees strategic importance in its presence in Nicaragua. [ 8] [ 9] All this is viewed with suspicion by the U.S. The head of the U.S. Southern Command, Kirt Tidd, warned in April that "the Russians are pursuing a disturbing attitude" in Nicaragua, which "impacts the stability of the region".

Undoubtedly, when world powers such as Russia or the United States act outside their territory, they are always guided by a combination of motivations. Strategic moves are essential in the game of world politics. For this very reason, the financial aid a country receives or the partnership it can establish with a major power is often subject to political conditionality. In this case, it is difficult to know for sure what exactly is the goal of the station in Nicaragua or even those in Brazil. At first glance, the goal seems neutral - to offer a higher quality navigation system and provide a different option to GPS - but given the new value Russia is placing on its geopolitical capabilities, there is the possibility of a more strategic use.