Dear BWR Subscribers,
“Barbershop Whispers….Russia” begins with “My Takeaways” on the main topic, followed by the main topic discussion. The last two sections of “Barbershop Whispers…Russia” are “Follow-ups” regarding previous publications and “Quick Bites” briefly addressing emerging events.
In last week’s BWR, I summarized Putin’s war going into year three. What did Putin expect to achieve through the second invasion? What has this cost Russia, and what has Putin achieved after two years of war?
In this week’s BWR, I will discuss Russia’s political and economic relationship with Latin America. How is Russia exploiting its Latin American relationships, and are they strengthening?
Takeaways:
BANDWIDTH: The Kremlin is exploiting its inherited Soviet-era Latin American networks in a cost-efficient manner. Its economic and political footprint in Latin America is small, opportunistic, and somewhat expanding thanks to Western sanctions-induced discount pricing for Russian energy.
RESOURCES: Unlike the US and China, Russia’s value proposition to Latin America is limited. Russia does not have the global economic power to buy allies. This is a determining factor in Russia’s limited influence and presence in Latin America.
Russian Influence in Latin America
From Fidel Castro’s “Movimiento 26 de Julio” to Daniel Ortega’s “Frente Sandinista de Liberación Nacional, FSLN,” the Soviet Union challenged the US “Monroe Doctrine” policy by supporting these movements and their subsequent revolutionary governments, replacing US-friendly governments, established Russian spy bases, and developing mutually beneficial and essential trade relationships with several Latin America countries.
As the heir apparent to the Soviet Union, the Russian Federation inherited an established network of political and economic ties in Latin America. The Russian network’s footprint is a shadow of what it was in Soviet times.
The 1991 collapse of the Soviet Union forced Russian retrenchment from the region, leaving Russia with Cuba and Nicaragua as the only critical bases of influence in Latin America, and later Venezuela in the ‘00. Nevertheless, these three countries play a significant and vital role in messaging anti-American propaganda in the region and influencing American domestic politics, particularly through these countries’ exile communities in Miami.
The Soviet Union’s political and economic modus operandi in Latin America mainly had been opportunistic and political, which is still valid for today’s Kremlin. Just last week, Russian Security Council Secretary Nikolai Patrushev met with Raul Castro (although retired from Public office, still a force in the Cuban Communist Party) and Nicaraguan President Daniel Ortega in Cuba and Nicaragua, respectively.
Patrushev also traveled to Venezuela and Bolivia, countries with frosty US relations, where Russia has significant economic and political interests.
Economic Influence
Roszarubezhneft, a Russian state-owned oil company, is a significant shareholder in the Venezuelan state-owned oil company Petróleos de Venezuela, S.A. (PDVSA). Its shares in PDVSA were acquired from Rosneft, a Russian quasi-state oil company. PDVSA owes the Russian company $4.6B, and Roszarubezhneft is negotiating to take over the output sales in exchange for the debt owed. For the Russian firm to act as the off-taker will require a change in Venezuelan law that governs oil exports, and it comes at a time when an audit of PDVSA found $21B of unpaid invoices to intermediaries for past exports. This represents 84% of PDVSA’s exports since 2020.
Separately, In June 2023, Rosatom, the Russian state nuclear firm, announced a $600M investment in several lithium extraction projects in Bolivia. The latter represents the global search for, and claim on, critical rare earth minerals like lithium needed for the ongoing global green energy transition.
These transactions represent the Kremlin’s interest in keeping its long-standing regional relationships active.
The Kremlin also expands its influence network to include other Latin American countries. For example, Latin America’s biggest economy, Brasil, imported 6.1M metric tonnes of diesel fuel from Russia in 2023, a 6,000% increase from 101K metric tonnes in 2022. This represents a YOY dollar increase from $95M to $4.5B. According to the Financial Times, Brazil overtook Türkiye in October 2023 to become the largest buyer of Russian diesel fuel. Russia has also overtaken the US as Brasil’s largest supplier of diesel. The driving factor for this increase in trade is discount pricing for diesel fuel and other Russian imports, including fertilizers. Russia now accounts for 85% of Brazil’s total diesel imports.
Over the years, other Russian economic presence in Latin America include Lukoil’s $700M stake in a successful offshore project with Mexico’s PetroBal and Novatek’s not-so-successful LNG plant in Argentina. The latter never got off the ground.
Information and Security Influence
Information Influence
The Russian message to Latin America is similar to the Soviet Union’s message of the Western capitalist exploitation of the proletariat. This message is repackaged as the “Colonists exploiting the Global South – or the Majority of the World – through Western sanctions and control of the global economic system.” The latter, about G7+ sanctions against Russia, resonates with many Latin American countries – particularly Cuba, Venezuela, and Nicaragua – but also Brazil, Argentina, and Mexico.
According to the United States Institute of Peace (USIP), Actualidad RT, is one of Latin America's largest Russian information platforms. Actualidad RT has 17M Facebook followers, triple the number of its English-language equivalent, and 3.4M X (formerly Twitter) followers. Actualidad RT and Sputnik Mundo, another heavy-weight Russian media platform, are the most significant Russian Latin American media platforms and have content-sharing agreements with regional media organizations such as TeleSur. TelSur, the creation of Hugo Chávez in 2005, is owned by the Venezuelan and Cuban governments and regional governments.
Actualidad RT has become embedded and accepted into the regional media landscape, as evidenced by numerous prestigious awards over the years presented to RT reporters by the Club de Periodistas de Mexico.
Security Influence
In addition to a standing presence of 300 Russian training soldiers in Nicaragua, the Kremlin also maintains a physical presence in Cuba. In addition to the small military presence, the Kremlin also maintains signal intelligence operations in the region. For example, Brazil and Nicaragua host several GLONASS (Russia’s alternative to GPS) ground stations. New stations are being considered in Argentina, and Mexico allegedly signed a cooperation agreement with GLONASS last year. Similarly, Russia’s military runs six radar installations in Venezuela, which are meant to enhance the regime’s surveillance of the opposition and Colombia’s military movements.
Follow-ups & Quick Bites
Follow-ups:
Alexei Navalny’s Funeral - He Will Be Missed
Alexei Anatolyevich Navalny, a true Russian patriot who gave his life for his country, was laid to rest in Moscow. He won the hearts and minds of thousands of old and young Russians who dared to fight for a better Russia. They demonstrated their support by turning out in the thousands in Moscow and across the country to mourn his death.
Rest in Peace, Alexei Anatolyevich.
Quick Bites
Bulgaria Terminates Russian Oil Imports
Effective 1 March, Bulgaria officially halted the use and importation of Russian oil.
Bulgaria ended its importation of Russian oil early, as it was initially slated to be in effect until the end of 2024. Bulgarian lawmakers stated the decision was made to avoid indirectly financing Putin’s war on Ukraine.
Vol 2, No 12 - BWR 03.03.2024
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