Regional mentions in DNI threat assessment

Continuing my series of posts of Latin America and Caribbean mentions in larger US strategy documents, copied below is the regional portion from today's testimony of Dennis Blair, Director of National Intelligence, to the US Senate Select Committee on Intelligence. The document is intended to provide a "threat assessment" from the intelligence community's perspective. I have some disagreements with the document, but am posting without comment for now.


The following is copied directly from the DNI testimony and does not reflect my views.
Latin America Stable, but Challenged by Crime and Populism

Democratic governance remains strong in Latin America and the Caribbean where a vast majority of countries are committed to representative democracy, economic liberalization, and positive relations with the United States. In some countries, however, democracy and market policies remain at risk because of the continued threats from crime, corruption, and poor governance. In most states, serious economic problems have added further stress to democratic institutions. In parts of Mexico and Central America, for example, powerful drug cartels and violent crime undermine basic security. In other countries such as Venezuela, Bolivia, and Nicaragua, elected populist leaders are moving toward a more authoritarian and statist political and economic model, and they have banded together to oppose US influence and policies in the region. Venezuelan President Hugo Chavez has established himself as one of the US’s foremost international detractors, denouncing liberal democracy and market capitalism and opposing US policies and interests in the region.

The region is showing signs of a slow economic recovery because countercyclical monetary and fiscal policies, coupled with rising commodity prices, helped most countries in the region stabilize by mid 2009. We judge that economic activity dropped by about 2.5 percent in 2009, led by Mexico with about a 7 percent decline. Latin American economies are expected to grow, on average, about 3 percent in 2010, but until a more robust recovery in the United States and Europe takes hold, regional economic growth will be modest. Exports from the region in 2009 have been down 25 to 30 percent from 2008, and we expect foreign direct investment will drop by about 30 percent. Besides Mexico, smaller countries in Central America and the Caribbean have been hit hard because of their close trade ties to the United States, falling tourism earnings, and declining remittances.

Mexico: Democracy Strong, But Faces Severe Test
President Calderon of Mexico has political backing and popular support for strengthening the rule of law in the face of violence, corruption, and criminal influence of his countries’ powerful drug cartels. About 90 percent of all the cocaine that reaches the US from South America transits via Mexico, providing an enormous source of revenue and influence for illicit drug traffickers and giving gangs the means to threaten institutions, businesses, and individual citizens of Mexico. According to National Drug Intelligence Center, Mexican and Colombian drug trafficking organizations annually earn between $18-39 billion from drug sales in the United States.

Calderon is determined to break the cartels power and influence and reduce drug flows despite slow progress and continued high levels of violence. He has made the war on crime a key feature of his presidency, and his approval ratings remain solid, despite the fact that drug related violence claimed more than 7,000 lives last year. Opposition political parties support a strong counter drug effort, and the Mexican military remains committed to the task. We assess that the drug cartels probably will not destabilize the political situation even with escalated violence.

Brazil: A Growing Success
Brazil, with a stable, competitive democracy and robust economy, is one of the success stories of the region. Brazil’s political system is well established and less vulnerable to populist authoritarian ambitions and its middle class has grown impressively to more than 50 percent of the population. Brazil will elect a new president this year as the popular President Luiz Inacio Lula da Silva steps down after two terms, and whoever wins probably will pursue responsible pro-growth economic policies. As an impressive sign of its economic health, Brazil suffered relatively little from the world financial crisis, and its GDP will probably grow at a rate of 5 percent this year.

Brazil, however, has crime and drug problems that will persist. Its major cities are among the region’s most violent, and according to a UN study, Brazil is one of the world’s largest consumers of cocaine. In Rio de Janiero, the site of the 2016 Olympics, authorities have initiated a program to recapture poor neighborhoods that are under the sway of powerful criminal gangs. The United States is working closely with Brazilian counterparts on counterdrug operations, particularly with the Federal Police.

Overall, US-Brazilian relations are positive, although lately Brasilia has made public its strong differences with us on climate change, our Defense Cooperation Agreement with Colombia, and our handling of the Honduras crisis. Nevertheless, we see Brasilia as a valuable partner in promoting hemispheric stability and democratic values.

Central America At Risk
Mounting crime and corruption in the northern tier of Central America—El Salvador, Guatemala, and Honduras—are challenging the ability of those democratic governments to provide for basic security and the rule of law. High homicide rates make the region among the most violent in the world. According to the United Nations Development Program, El Salvador, Guatemala, and Honduras have homicide rates five to seven times higher that the world average of nine per 100,000 people. El Salvador last year had a homicide rate of 71 per 100,000, the highest rate in Latin America. At the same time, the governments’ capacity to respond effectively is limited by weak institutions and endemic corruption. The challenges to regional governments are compounded by the severe economic downturn in most of the region, increased poverty owing to the loss of jobs, and reduced remittances from legal and illegal migrants to the US.

Despite holding peaceful elections last November, Honduras still faces political uncertainty and partial diplomatic isolation resulting from the forcible removal of President Manuel Zelaya from power last June. Newly elected President Porfirio Lobo will have to struggle to achieve international recognition and will face continued opposition from Zelaya’s more radical supporters at home.

Venezuela: Leading Anti-US Regional Force
President Chavez continues to impose an authoritarian populist political model in Venezuela that undermines democratic institutions. Since winning a constitutional referendum in early 2009 that removed term limits and will permit his reelection, Chavez has taken further steps to consolidate his political power and weaken the opposition in the run up to the 2010 legislative elections. The National Assembly passed a law that shifted control of state infrastructure, goods, and services to Caracas in order to deprive opposition states and municipalities of funds. Chavez has curtailed free expression and opposition activities by shutting down independent news outlets, harassing and detaining protestors, and threatening opposition leaders with criminal charges for corruption. Chavez’s popularity has dropped significantly in recent polls as a result of his repressive measures, continued high crime, rising inflation, water and power shortages, and a major currency devaluation, raising questions about his longer term political future.

On foreign policy, Chavez’s regional influence may have peaked, but he is likely to continue to support likeminded political allies and movements in neighboring countries and seek to undermine moderate, pro-US governments. He has formed an alliance of radical leaders in Cuba, Bolivia, Ecuador, Nicaragua, and until recently, Honduras. He and his allies are likely to oppose nearly every US policy initiative in the region, including the expansion of free trade, counter drug and counterterrorism cooperation, military training, and security initiatives, and even US assistance programs.

• In Bolivia, President Evo Morales easily was reelected in December 2009 for another five year term after changing the Constitution. He is likely to continue to pursue an authoritarian, statist domestic agenda and an anti-US foreign policy. Relations with the US remain poor, and Morales has sharply curtailed cooperation with US counterdrug programs since expelling the US Ambassador in 2008 and three dozen DEA personnel in early 2009.

• Ecuadorean President Rafael Correa, after modifying the Constitution to permit himself another term, was reelected in 2009. Relations with the US have not been close especially since Correa ended US use of the Manta airbase in 2008 and reduced cooperation on counternarcotics programs.

Chavez’s relationship with Colombia’s President Uribe is particularly troubled. His outspoken opposition to Colombia’s Defense Cooperation Agreement with the US has led to an increase in border tensions. Chavez has called the agreement a declaration of war against Venezuela. He has restricted Colombian imports, warned of a potential military conflict, and continued his covert support to the terrorist Revolutionary Armed Forces of Colombia (FARC).

Chavez Embraces Extra-Regional Actors
Chavez will continue to cultivate closer political, economic, and security ties with Iran, Russia, and China. He has developed a close personal relationship with Iranian President Ahmadi-Nejad, and they have signed numerous agreements, primarily on joint energy ventures. The two counties also have conducted regular flights between their two capitals since 2007. Following Chavez’s lead, Bolivia, Ecuador and Nicaragua have increased their ties to Iran.

Most of the agreements Moscow has signed with Chavez relate to arms sales and investments in the Venezuelan energy sector. Over the past five years, Venezuela has purchased more than $6 billion in weapons from Moscow, including 24 SU30MK multi-role fighters, along with helicopters, tanks, armored personnel carriers, air defenses missiles, and small arms. On paper, Venezuela’s acquisitions are impressive, but their armed forces lack the training and logistics capacity to use these to their full capability. Yet, the scale of the purchases has caused concern in neighboring countries, particularly Colombia, and risks fueling a regional arms race. In addition to the arms deals, Russian naval warships and long range strategic bombers visited Venezuela in late 2008 to demonstrate Moscow’s ability to deploy its military forces into the region.

Cuban Economy Under Stress
Cuba has demonstrated few signs of wanting a closer relationship with the United States. Without subsidized Venezuela oil shipments of about 100,000 barrels per day, the severe economic situation would be even worse. President Raul Castro fears that rapid or significant economic change would undermine regime control and weaken the revolution, and his government shows no signs of easing his repression of political dissidents. Meanwhile illegal Cuban migration to the US, which averaged about 18,000 per year from 2005 to 2008, decreased by almost 50 percent in 2009 mainly because of the US economic slowdown and tightened security measures in Cuba. While we judge the chance of a sudden Cuban mass migration attempt is low, if the regime decides it cannot cope with rising public discontent over economic conditions, it could decide to permit more Cubans to leave the island.

Haiti: Earthquake Threatens Viability of State
The 7.3-magnitude earthquake that devastated Port-au-Prince, Haiti on 12 January 2010 killed and injured hundreds of thousands—in a city of nearly three million people—largely wiping out the international effort to promote nation-building over the last two decades. With the destruction of entire neighborhoods, logistics infrastructure, and key public buildings, including the UN headquarters, Haiti faces a daunting rebuilding challenge far beyond its internal capacity to address. The long-term commitment and support of the international community will be required to help it recover. Even with a robust, long-term international commitment, the threat of political and economic instability will always be present, as will the potential threat of maritime mass migration by Haitians desperate to reach the United States.

Please note, the above is copied directly from the DNI testimony and does not reflect my own views.