Community of Latin American and Caribbean States (CELAC)

_{^{United States hegemony in Latin America is in question | credit Prensa Latina}}

The United States proclaimed the Monroe Doctrine 200 years ago and ever since has arranged Latin American and Caribbean affairs to its advantage. Nevertheless, struggles for national and regional independence did continue and the poor and marginalized classes did resist. Eventually there would be indigenous movements, labor mobilizations, and progressive and socialist-inclined governments. Cuba’s revolutionary government has endured for 63 years.

The U.S. political hold may have weakened, but U.S. control over the region’s economies remains strong; after World War II it extended worldwide. Now cracks are showing up. In particular, the U.S. dollar’s role as the world economy’s dominant currency may have run its course.

In 1944, 44 allied nations determined that the value of their various currencies would correlate with the value of the U.S. dollar instead of the value of gold. The nations since then have relied on the U.S. dollar for their reserve currencies, for foreign trade and in banking transactions.

There seemed to be good reason. The United States was supreme in producing and marketing goods and so, presumably, the dollar’s value would remain stable and predictable. The dollar would be readily accessible to bankers and traders and its valuation would be unambiguous. Nations could also build their currency reserves through the dollars they accumulated in the form of bonds sold by an increasingly indebted United States.

The United States has benefited. In currency exchanges involving the dollar, U.S. companies and individuals experience only minor add-on costs. U.S. importers know that the more the dollar strengthens in value, the less expensive will be products they buy abroad. U.S. borrowing costs overseas are relatively low because U.S. bonds, and the investments they represent in dollars, are appealing abroad, for a variety of reasons.

Dollar dominance has caused pain abroad. Exporters to the United States take a hit when the exchange value of the dollar weakens. Importers of U.S. goods are hurt when the dollar strengthens.

Most importantly, the U.S. government gains an opening to punish enemy countries through their use of dollars in international transactions. It imposes economic sanctions requiring that dollars not be used in a targeted country’s overseas transactions. The U.S. Treasury Department penalizes foreign banks and companies that disobey. Sanctioned nations have included Cuba, Iran, North Korea, Syria, Venezuela, Nicaragua, and more recently, China and Russia.

The U.S. government’s frequent resort to economic sanctions has greatly contributed to new stirrings on behalf of a new international currency system. Confiscation of currency reserves deposited in U.S. and European banks that belong to Iran, Venezuela, and Afghanistan have likewise encouraged calls for change.

On March 29 China and Brazil announced they would use their own currencies in trading with each other. China is Brazil’s biggest trade partner. China’s renminbi currency presently constitutes a major share of Brazil’s currency reserves.

Earlier in 2023, Brazil and Argentina proposed cooperation toward creating a common currency for themselves. At the January meeting of the Community of Latin American and Caribbean States (CELAC), Brazilian President Lula da Silva opined that, “If it were up to me, I would promote a single currency for the region.” He would call it the “SUR” (South). The ALBA regional alliance in 2009 proposed an electronic currency called the “Sucre” aimed at reducing dollar dependency.

Former Brazilian President Dilma Rousseff is the recently named head of the New Development Bank which, headquartered in Shanghai, serves the BRICS nations (Brazil, Russia, India, China, and South Africa). The bank represents an alternative to the U.S. -dominated International Monetary Fund and the World Bank.

The shift away from dollar dependency is evident elsewhere. At a Russian-Indian “Strategic Partnership …Forum” recently, a Russian official announced that the BRICS states would be creating a new currency and that the formal announcement would be made at the BRICS summit meeting in Durban South Africa in August.

The BRICS countries account for “40% of the global population and one-fourth of the global GDP.” According to People’s Dispatch, Iran and Saudi Arabia, having recently signed a peace accord, will soon be joining BRICS. Egypt, Algeria, the UAE, Mexico, Argentina, and Nigeria apparently are giving consideration. The values of new currencies will rest not on another currency but on the value of “products, rare-earth minerals, or soil.”

Iran and Russia in January agreed on methods useful for bypassing the SWIFT banking system, the U.S. tool for servicing its dollar dominance. To evade U.S. sanctions, the two countries reply on their own currencies for most transactions.

At their summit in March, Russian and Chinese leaders reiterated their intention to expand bilateral trade and utilize their own currencies. China increasingly is using its own currency in transactions with Asian, African, and Latin American countries. The yuan “has become the world’s fifth-largest payment currency, third-largest currency in trade settlement and fifth-largest reserve currency,” according to Global Times.

Saudi Arabia is on the verge of selling oil and natural gas in currencies other than the dollar, and China occasionally pays Arabian Gulf nations in yuan for those products.

The finance ministers and governors of the central banks of the member states of the Association of Southeast Asian Nations (ASEAN) met in Indonesia on March 28. At the top of their agenda were “discussions to reduce dependence on the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements in local currencies”. The ASEAN nations, an alliance of 10 southeast Asian nations, are developing a digital payment system for member states’ transactions.

Dollar dominance may be losing its appeal closer to home. Former Goldman Sachs chief economist Jim O’Neill claims that, The U. S. dollar plays a far too dominant role in global finance … Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic.”

Gillian Tell, chair of the Financial Times’ editorial board notes that, “concerns are afoot that this month’s US banking turmoil, inflation and looming debt ceiling battle is making dollar-based assets less attractive.” Plus, “a multipolar pattern could come as a shock to American policymakers, given how much external financing the US needs.”

There are wider implications. Argentinian economist Julio Gambina bemoans “disorder in the world economy …[and] this attitude of unilateralism represented by the US sanctions.” Interviewed on March 29, Gambina points out that “wealth has a father and a mother: labor and nature.”

He adds that, “Latin America and the Caribbean … where inequality is growing the most … have a highly skilled working class, willing to carry forward the production of wealth. We have the resource of assets held in common for sovereign development through which the interests of our peoples and the reproduction of nature, life and society are defended.”

_{W.T. Whitney Jr. is a political journalist whose focus is on Latin America, health care, and anti-racism. A Cuba solidarity activist, he formerly worked as a pediatrician, lives in rural Maine. W.T. Whitney Jr. es un periodista político cuyo enfoque está en América Latina, la atención médica y el antirracismo. Activista solidario con Cuba, anteriormente trabajó como pediatra, vive en la zona rural de Maine.}

_{^{Photo credit: People’s Dispatch}}

On the occasion of Cuban President Miguel Díaz-Canel’s visit recently to Mexico, Mexican President Andrés Manuel López Obrador (AMLO) raised the possibility of many nations cooperating to oppose the U.S blockade of Cuba. AMLO has become Cuba’s champion in the international arena, and perhaps not accidentally: the governments of the two nations each originated from social and political revolutions.

The two leaders have built a tight relationship. Diaz-Canal visited to Mexico in September, 2021. AMLO was in Cuba in May, 2022. And AMLO refused to attend a U.S – organized Summit of the Americas in Los Angeles in June 2022 because Cuba had been excluded.

Accompanied by Cuban government officials, Díaz-Canel on February 11 joined AMLO in the Mexican state of Campeche. That Cuban medical teams are working there now may have helped determine the meeting’s location.

In remarks at a medical center, AMLO lauded Cuba’s medical solidarity and described his own people’s unmet social needs. He called upon the U.S. government to end its blockade of Cuba:

[Cuba] has our respect, our gratitude, our support, and we are going to continue demanding the removal, the elimination of the blockade against Cuba, which is inhumane. And there’s more than voting in the United Nations where the anti-blockade resolution is always approved overwhelmingly, and then it’s back to the way it was.

I promise President Miguel Díaz-Canel that Mexico will be leading a more active movement so that all countries come together and defend the independence and sovereignty of Cuba. No longer will there be anything about treating Cuba as a terrorist country or putting Cuba on the black list of supposed terrorists.

Cuba has been able to count on support from Mexico. As the Bay of Pigs invasion was unfolding in 1961, former Mexican President Lázaro Cárdenas spoke in defense of Cuba before 80,000 people in Mexico City’s Zocalo. Soon afterwards, Mexico’s government backed Cuba in the United Nations. Later Mexico rejected calls by the U.S. – dominated Organization of American States for member states to impose economic sanctions against Cuba and break off diplomatic ties.

AMLO visited Cuba in May, 2022. Speaking before Cuban leaders, he recalled “times when the United States wanted to own the continent …. They were annexing, deciding on independence wherever; creating new countries, freely associated states, protectorates, military bases; and … invading.” The U.S. government, he declared, needs to know “that a new relationship among the peoples of America … is possible.”

While in Cuba he signed agreements for Mexican young people to study medicine in Cuba, for Cuba to provide Mexico with anti-Covid vaccines, and for hundreds of Cuban physicians to work in Mexico in underserved areas.

Months before, in September 2021, Díaz-Canel was the honored guest at celebrations in Mexico City of the 200^th anniversary of Mexico’s national independence. Welcoming his guest, AMLO praised Cuba’s steadfastness in defending its revolution. Calling upon U.S. political leaders to lift the blockade on Cuba, he appealed to their good sense and rationality, saying nothing about nations uniting in opposition to the blockade.

[The U.S. government] must lift its blockade against Cuba, because no state has a right to subjugate another people, or another country … [And] It looks very bad that the U.S. government uses the blockade to hurt the people of Cuba in order to force them by necessity to confront their own government … President Biden, who shows political sensitivity, [must] take a wider view and put a permanent end to the politics of grievances against Cuba.

The emphasis was different, however, when the two leaders met recently, on February 11 in Campeche. AMLO unveiled an evolved and more forceful approach to ending the blockade. He bestowed upon Díaz-Canel Mexico’s highest recognition extended to foreign notables, the Aztec Eagle, and then praised Cuba as a special case for its strenuous resistance to U.S. enforcement of the Monroe Doctrine. He continued:

I also maintain that it is time for a new coexistence among all the countries of America, because that model imposed more than two centuries ago is completely exhausted, it is anachronistic, it has no future. There is no way out, it no longer benefits anyone, we must put aside the trade-off imposed on us either to go along with the United States or be in opposition, courageously and defensively.

It is time to express and explore another option, that of dialoguing with the leaders of all the countries and especially with U.S. leaders, and convince and persuade them that a new relationship between the countries of our continent, of all America, is possible. I believe that conditions are perfect now for achieving this goal of mutual respect.

In an interview later on, Mexican foreign minister Marcelo Ebrard offered some specifics:

President Lopez Obrador wants to bring the presidents of the progressive states of Latin America together to address food security, well-being and other issues that are important for our community of nations. This is something we have to discuss with other foreign ministers and move forward in the coming months.

The progressive governments AMLO has in mind, according to Ebrard, are Mexico, Argentina, Brazil. Colombia, Cuba, Venezuela, Bolivia, Chile, and Honduras. They include “the three largest economies in Latin America.” The implication may be that these countries, collaborating on various issues, political ones included, have sufficient economic clout to pressure the United States on Cuba.

President Díaz-Canel himself has been building other bridges. In recent weeks he visited Belize, Saint Vincent and the Grenadines, and Barbados, for the 7^th CARICOM (Caribbean Community) – Cuba Summit meeting.

AMLO’s focus on progressive nations is crucial. He has worked toward reviving the Community of Latin American and Caribbean States (CELAC) as a vehicle for collective action, despite participation there by conservatively-governed nations. Yet he did not attend the CELAC summit taking place in January and so may be discouraged as to prospects for CELAC serving his purposes.

AMLO’s power to orchestrate regional support is limited. Only 18 months remain of his six-year term as president of a country dependent economically on the United States and divided geographically, ethnically, and by social class. Nevertheless, Cuba, whose external resources for ending the U.S. economic blockade are hardly infinite, badly needs international partnering that offers persuasive power. Lifelines thrown by AMLO are a start in that direction.