Although Russia seems ready to increase its influence in Latin America, the U.S. doesn’t view these new initiatives as a threat.
From left, second row: Russian President Vladimir Putin and his Cuban counterpart Raul Castro Ruz at the ceremony of signing joint documents in Havana. From left, front row, center: Rosneft President Igor Sechin and CUPET Director General Juan Torrez Naranjo. Photo: RIA Novosti
Russian influence in the Americas has existed since the 1950s, most prominently in Cuba, but to a lesser extent in Nicaragua and more recently in Venezuela. Despite the severe reduction in loans and oil to Cuba in 1991, the political commitment and friendship remained.
Today that commitment is demonstrated by the renegotiation of prior loans and the sale of aircraft with a view to turning Havana into a airline hub for Russian visitors seeking to enjoy Caribbean tourist spots. The traditional Soviet system of loans, followed by sale of heavy equipment – aircraft and turbines - followed by renegotiation or forgiveness of those loans continues.
This economic relationship, together with the multiple visits of Russian tourists is not seen as a threat to the United States. Nor is it considered to be a dangerous remnant of the Cold War.
Likewise, in Nicaragua, Soviet aid, through Cuba, expanded from the early 1970s until its end in 1987. However, President Daniel Ortega's knowledge of the Russians encouraged him to renew political and economic ties when he returned to power in 2007. Russians are now discussing a maritime base and the sale of boats suitable for coast guard duties.
These discussions are open and not perceived as an immediate threat to the United States. However, the U.S. government monitors their development. So long as it remains for commercial and coast guard purposes, they present no threat.
In Venezuela, Russian interest is threefold: Encourage the Bolivarian leadership to continue supplies of oil at the rate of 90,000 - 104,000 barrels of oil per day to Cuba; hold rights to proven oil fields in the Orinoco basin for future sourcing of hydrocarbons; and sell heavy equipment, such as gas turbines and trucks.
To finance these projects, Moscow has recently established and opened a Russian bank in Caracas. The Russian experience over the last eight years has not encouraged them to expand commercial activities in Venezuela. A planned factory to manufacture Kalashnikov rifles has yet to be completed and the planned number of manufactured rifles has barely met 10 percent of its target.
However, given the rhetorical hostility of the Venezuelan government to the United States, Russian activities in Venezuela continue to be observed. Russian commercial activities present less of a threat than Iranian presence during the presidency of Mahmoud Ahmadinejad and are money losers for Russian investors, except for the oil rights in the Orinoco.
The last seven months have seen a reduction of Russian visitors to Caracas. Only the announcement to open the Russian bank has made news. This suggests that Moscow is preoccupied elsewhere.
For the governments of Brazil and Argentina, Russian investments are welcome and offer diversification. Both are producers of grains and tropical fruits, traditional products for export to Russia and Eastern Europe. Brazil is also interested in heavy equipment for its energy industry, but its high national content rules impede international investors, including Rosneft.
Overall, the size of Russian investments in the hemisphere is not significant and is considered neither a threat to the United States, nor a return to the tensions of the Cold War.
The opinion of the author may not necessarily reflect the position of Russia Direct or its staff.
Read Russia Direct’s new Brief, “Russia in America’s Backyard” that looks at the prospects for collaboration between Russia and Latin American countries, as well as the potential for rivalry with China and the U.S. in a region that was once a key battleground of the Cold War. Subscribe and download the full version of the Brief to find out. If you are already an RD subscriber, download the Brief "Russia in America’s Backyard" here.