South America, the Bush foreign policy and the future of American hegemony.

Conferencia dictada por el Dr. John E. Rielly, en el Instituto de Estudios Internacionales, Universidad de Chile, el 15 de julio de 2005.

It is a great pleasure to return to this platform at the University of Chile where I have had the pleasure of lecturing before. I want to thank the Director for the kind invitation and thank you all for coming. It has been my good fortune to have visited Chile regularly since June of 1964, now forty years ago. Interest in Chile remains high in the United State, and the American role in Chile in the twentieth century continues to generate passionate debate-as readers of Foreign Affairs journal have been reminded us in recent months.

My subject today is South America, the Bush foreign policy and the future of American hegemony. I will comment briefly on the overall priorities of the Bush foreign policy; second, on the Bush policy in relation to South America, especially Brazil, Argentina and Chile; and then conclude with some comments about the future of American hegemony.

As we know, the strategy of containmed and deterrence which shaped US policy for almost half a decade became no longer relevant after the disappearance of the Soviet Union in 1991. After the terrorist attacks on New York and Washington on September 11,2001, President George W Bush decided, like President Franklin D. Roosevelt after the attack on Pearl Harbor in 1941, that some drastic overhaul of US strategy was needed to meet the new threat posed by Islamic terrorism. The main outlines of this strategy are known to most of you: 1. The policy of preemptive unilateralist military attacks on potential enemies-whether state or non-state actors; 2. A willingness to use force without the sanction of the UN Security Council or any other multilateral organization; and 3. An assertion that "the overlap between states that sponsor terrorism and those that pursue weapons of mass destruction compels us to action".

The latter assertion would become the justification for the attack on Iraq. We know that both of those assumptions were unsubstantiated or outright false, that there is no convincing evidence that Iraq has nuclear weapons or had close links to Al Quaeda. We now have seen the results of that military intervention: Saddam Hussein has been removed from power, the US has not suffered any new major terrorist attacks at home, a prolonged and bloody insurgency in Iraq continues, the US alienated some of its closest allies, and the US has come to be regarded in much of the world, including in South America, as an international pariah.

One further consequence of the Iraq obsession is that it has led to a policy of "benign neglect" toward South America. Like the Vietnam issue from 1965 to 1969, the Iraq issue has pushed aside all other issues for the past three years. With the second term of the Bush administration, there are already signs that this may change. Both the President and the new Secretary of State have made extensive visits to Europe in February and committed the US to renew its priority to relations with the EU and NATO Europe.

Secretary of Defense Rumsfeld visited Argentina in March. Secretary Rice made a well received visit in April to Brazil, Chile and Colombia. So issues other than Iraq may receive renewed attention during the second Bush term. While the President and other top officials may not have abandoned their unilateralist dreams, event-particularly the disastrous Iraq occupation--have compelled them to move in a multilateral direction, if the label "benign neglect" is accurate, characterization of US policy toward South America during the previous four years, certainly in some countries, Argentina for example, the neglect may not have so benign. In most of South America since the beginning of the 21st century, there has been a strong backlash against the Washington Consensus, the view that the ultimate guide to economic and social progress in the rapid liberalization of the economy and the reduction of government influence. It is now clear that whatever the advantages of this policy prescription, the conditions were not in place for its successful implementation in a number of countries. In some cases, fragile government structures proved ill equipped to accommodate and sustain liberalizing policies. In others, regulatory frameworks and oversight mechanisms were obviously deficient. Adherence to the rule of law was uneven at best. And corruption added another obstacle. As a result you have populist governments today in Brazil, Argentina, Uruguay and Venezuela.

How has this attitude of benign neglect affected Argentina, Brazil and Chile? When, following the Peronist coup against President de la Rua in December 2001, Argentina collapsed and rapidly deteriorated into third world conditions, the Bush government did nothing to help avoid the disaster that followed. Ignoring the remarkable economic performance of Argentina in the 1990s, Treasury Secretary Paul O'Neill publicly scoffed and encouraged a negative hard line approach by the IMF. Because the problems facing Argentina-staggering foreign borrowing and indebtedness, profligate spending by the Menem government and the provinces, widespread corruption, weak savings rate, capital flight, an excessively prolonged link of the peso to the dollar-because these were...