U.S.-Southern Cone: Looking at Relations Through a Different Optic

By Noah Rosen*

Top: Display of bottles of Chilean wine/ David Almeida/ Flickr/ Creative Commons License
Bottom: Notebooks from the Plan Ceibal/ Jorge Gobbi/ Flickr/ Creative Commons License

While headlines track the highs and the lows in the United States’ relations with Latin America, a closer look at the broad range of interaction shows that, at least in some sectors in some countries, long-term economic relationships and knowledge exchanges have encouraged mutual benefits that rarely get mentioned in public discourse.

Chile’s wine industry, for example, is a powerhouse that has benefited from U.S. investment, open markets, and research and development work. Chilean wine underwent a sea change beginning in the late 1980s and early 1990s, as liberalization and democratization in the country opened opportunities for massive upgrades in quality and opportunities for export to new markets. Global recognition of the quality of Chilean wine grew throughout the 2000s and 2010s, and today bottled wine is Chile’s third most valuable export after copper and salmon. Exports to the United States in 2019 totaled $238 million, reflecting the vital importance of wine to Chile’s economy.

  • Though Chilean exporters were eventually able to diversify their export markets to include Europe and Asia, the exploding U.S. market in the 1990s and 2000s was key to the industry’s upgrading and expansion. Wines of Chile, a public-private partnership that markets Chilean wines, maintains a permanent U.S. office, runs events throughout the country, and organizes visits by U.S. sommeliers to provide feedback to Chilean producers. Knowledge exchange and technology transfer between experts in California, including the University of California at Davis, and Chilean counterparts has helped Chile’s wine industry stay on the cutting edge of production technologies, spurring advances in genetic identification and sequencing of key Chilean varietals.
  • U.S. foreign direct investment and joint ventures have also promoted innovation, technological advances, and access to international markets. For example, an early partnership allowed Concha y Toro to gain a foothold in the U.S. market and opened the door for other Chilean exporters. California winemakers Robert Mondavi, Kendall Jackson, and Canandaigua have established operations in Chile, bringing with them advanced trellis systems, drip irrigation, and other technology that have led to a marked increase in quality across the sector.

The remarkable success of Uruguay’s technology sector has also been aided by U.S. markets and tech exchanges. Visionary domestic programs such as “Plan Ceibal” in 2007, which promoted nationwide digital literacy and provided a laptop to every public-school student in the country, and investments in some of the fastest internet in the Americas, have helped Uruguay become the largest software exporter per capita in the region and third largest per-capita exporter in the world. However, the importance of the U.S. model and the depth of relationships between the U.S. and Uruguayan sectors have earned it the nickname “Silicon Valley of South America.”

  • The United States accounts for 65 percent of Uruguay’s tech revenue (as of 2019) – the result in part of the marketing and relationship-building by Uruguay XXI, the country’s investment, export, and country brand promotion agency. The agency annually sets up a country pavilion at TechCrunch Disrupt, one of Silicon Valley’s most important tech conferences. U.S. ventures in Uruguay have also played an important role in building the local tech market and providing capital and opportunities for local software developers. Major U.S. software and IT companies, including IBM, Microsoft, Cognizant, New Context, NetSuite, and VeriFone, have established bases in Uruguay and hire Uruguayan developers. In 2017, the Agencia Nacional de Innovación e Investigación (ANII) arranged for the highly recognized U.S. tech incubator 500 Startups to run a six-week accelerator program to build skills for 20 Uruguayan startups focusing on growth, product design, fundraising, and building connections.
  • The opening in 2019 of a Uruguayan Consulate in San Francisco reflects the importance of the relationship with Silicon Valley. The incoming Consul emphasized his mission as “opening doors for Uruguayan businesspeople” and pledged to facilitate connections and provide “softlanding support.” The office will also facilitate two-way knowledge and skills exchanges between Californian and Uruguayan universities and institutions. Last month, Amazon announced that Uruguayan vendors would be eligible to sell products on their platform, thanks to the efforts of the Uruguayan Embassy in the U.S.

These positive relationships — facilitated by governments but driven by private-sector partners — don’t erase all adverse twists and turns in U.S. relations with the region. But relatively quiet successes like U.S. cooperation with Chile’s wine industry and Uruguay’s technology sector provide important ballast. They are lucrative for both sides and provide valued jobs: wine in Chile employs over 100,000 people in direct work and represents 0.5 percent of GDP; the tech sector in Uruguay employs 17,000 people, representing 2 percent of the country’s GDP.

June 25, 2021

* Noah Rosen is a PhD candidate in the School of International Service, specializing in grassroots peace movements in Colombia. This article is adapted from CLALS research on the impacts of U.S. engagement in Chile and Uruguay, funded through a cooperative agreement between the Institute for War & Peace Reporting and the U.S. Department of State.

Brazil: The WhatsApp President

By Barbara dos Santos*

Bolsonaro social medis

Graphics from Brazilian presidential candidate Jair Bolsonaro’s social media detailing his followers on Facebook (left) and Twitter (right). / Twitter: @jairbolsonaro / Creative Commons

If polls predicting a landslide victory for Jair Bolsonaro in Sunday’s runoff election are correct, Brazil on January 1 will inaugurate its first president to win by virtue of his superior social media prowess rather than the strong party bases that propelled his predecessors.  He gained strong support from different sectors of Brazilian society by delivering – legally and potentially illegally – the message his supporters wanted to hear directly to their personal electronic devices, without the validation and transparency of traditional media.  The receptivity of his young supporter base compensated for the low amount of TV time allotted to him under Brazilian law.

  • WhatsApp has around 120 million users in Brazil, around 60 percent of the population, for a wide array of personal and commercial communication needs. The polling firm Datafolha found that two-thirds of Brazilian voters use WhatsApp, and that of them a majority (61 percent) are Bolsonaro supporters likely to follow political news on the service – compared to 38 percent of the backers of his opponent, Fernando Haddad.
  • The platform is perfect for manipulation of information. Messages are encrypted and are therefore beyond the domain of electoral authorities, independent fact-checkers, or even WhatsApp managers.  Real and fake news spread like wildfire.  Agência Lupa, a fact-checker service, has found that only 50 of the most shared pictures in 347 WhatsApp groups were factually correct.  During the weekend of October 6-7, the company found that 12 of the fake news items it evaluated were shared 1.2 million times.  The Federal Electoral Court (TSE), which created a consultative council earlier this year to tackle online misinformation, has been slow to respond to the threat – perhaps out of fear it would be accused of limiting free speech.

Bolsonaro’s campaign also used Facebook effectively even after it twice shut down pages carrying content of his deemed to be fake – 197 pages and 87 accounts in July, and 68 pages and 43 accounts two weeks ago.  Many of the pages portrayed Haddad as a Communist whose Workers Party would turn Brazil into another Cuba and convert children to homosexuality.  One attack – alleging that Haddad would distribute “gay kits” to expose schoolchildren to homosexuality – was so blatant that the TSE ordered Bolsonaro’s campaign to stop it.

  • Haddad’s presence on Facebook (1.5 million followers) is minuscule compared to Bolsonaro’s (7.8 million). Some of Haddad’s followers used social media to spread rumors that Bolsonaro staged his near-fatal stabbing at a rally last month; social media have not shut down any of Haddad’s pages or accounts.

Bolsonaro’s social media campaign has also allegedly been tainted by illegal funding.  Folha de São Paulo, one of Brazil’s biggest newspapers, last week reported that wealthy businesspersons spent US$3.2 million on a WhatsApp fake news operation.  If true, they broke electoral laws barring undeclared corporate campaign donations and the purchase of contact lists from a third party.  Speaking on Facebook Live, Bolsonaro said Folha had no evidence, adding in an interview later that he has no control over the businesspersons anyway.

Fake news in elections – in the traditional or social media – is not a new phenomenon, but its wildfire impact has caught many in Brazil by surprise.  The mere speed that disinformation travels makes it nearly impossible for Brazilian authorities to curb its spread, and self-policing by social media platforms also seems an implausible solution given their benefit from the high traffic fake news drives.  Bolsonaro and his campaign team realized this earlier and embraced it more aggressively than Haddad, who did not enter the race until September 11, ever did.  Haddad was busy trying to simultaneously convince Lula’s supporters to vote for him and others that he was not Lula’s puppet, while Bolsonaro’s message was reaching tens of millions of Brazilians with smartphones.  The likely president’s expertise in using social media (legally or not) has clearly boosted his campaign, but governing by WhatsApp, Facebook, or Twitter remains an untested proposition.  It seems that Bolsonaro may also follow U.S. President Donald Trump’s playbook into government.  Crushing his opposition under a barrage of half-truths and lies does not bode well for democratic governance.

October 26, 2018

*Barbara dos Santos is a Ph.D. Candidate in Political Science at the School of Public Affairs at American University.

Fake News: Threat to Democracy

By John Dinges*

Newspaper stand in Mexico City

A newspaper stand in Mexico City. As traditional news media faces growing competition from social media and emerging technologies, fake news poses a threat to legitimate news media and democracy itself. / Pablo Andrés Rivero / Flickr / Creative Commons

Fake news threatens to destroy the fundamental values of a free press throughout the hemisphere, and only a redoubling of efforts to build and protect investigative journalism would appear to offer hope in stemming its growing influence.  Journalism faces a number of challenges, including violence, authoritarian pressure, manipulation by commercial interests, and competition from “social media.”  But the combination of fake news and new technologies to spread it pose an asymmetric threat to legitimate news media and to democracy itself.

  • In its strict – and now largely unused – definition, fake news is fabricated information that’s designed to look like journalistic content but whose real purpose is to twist the truth and manipulate people’s behavior. Also called “black propaganda” and “disinformation,” it was engendered principally by intelligence agencies.  The CIA used it during the Cold War in Chile and other Latin American countries.  The Soviet Union’s KGB disseminated fabricated documents with authentic-looking formatting and signatures from Chile’s secret police.  Cuba’s Radio Havana promoted the false narrative that socialist president Salvador Allende was murdered in the 1973 military coup – he actually committed suicide.
  • The phenomenon now is broader and more threatening. Fake news has evolved to include attacks on the legitimacy of independent media, and its agile use of social media spread rapidly through personal electronic devices enhances its impact.  U.S. President Donald Trump has alleged (as recently as July 15) that the “media are the enemy of the American people.”  Latin American politicians have used accusations of fake news to attack legitimate media.  In Venezuela, the Chavista government invented the concept of “media terrorism.”  Fake news techniques are found most commonly in campaigns by authoritarian parties and governments.  Russia’s intelligence services, under President Vladimir Putin, have weaponized the techniques and are now systematically using them to intervene in European and U.S. elections, notably in supporting the 2016 victory of Donald Trump.

There is no consensus among journalists on a solution.  Tough experiences have shown, for example, that government regulatory actions tend to backfire against a free press; political leaders all too easily resort to actions that lead to the imposition of political hegemony and control.  Media laws in Ecuador, Venezuela, and Argentina were hailed as progressive in some quarters – mandating fairer distribution of broadcast spectrum, for example.  But they were most effectively used to impose political control on opposition media.  Journalists, moreover, have been thrown off balance by the phenomenon of fake news.  They have struggled to respond to effective attacks on their credibility and so far have failed to develop the tools needed to mount an effective counterattack.

  • The double challenge is how to enable consumers of media information to distinguish between false and truthful information – especially because the fake news products are designed to resonate with their biases – and how to strengthen legitimate journalists’ ability to rebuild their beleaguered credibility. Talking Points Memo journalist Josh Marshall, speaking of politically motivated falsehoods in a memo published by the U.S. House Permanent Select Committee on Intelligence last February, said:  “Conventional news and commentary [are] incapable of handling willful lying in the public sphere.”  In the case of the committee’s misleading memo, most observers agree, the legitimate media published accurate fact checking, but apparently the accurate stories had little corrective impact on public perceptions of the memo – handing a victory to fake news.

The other serious threats that journalism faces – such as the murder of dozens of Mexican journalists with practically total impunity, and the consolidation of ownership of the media in the hands of very few owners in most countries – are not insignificant.  Fake news, however, presents a more serious, even existential, threat because it short-circuits all three of the main functions of journalism in the preservation and consolidation of democracy – as sources of information the public needs in voting, as forums for political debate, and as investigators to monitor and evaluate government and private power.  In the ongoing asymmetric war between journalism and fake news, investigative journalism, if protected and funded, would appear to offer the most efficient defense for democracy.  Digital platforms have created new tools and platforms for investigative journalism, and new organizations, such as ProPublica, the International Consortium for Investigative Journalism, among others, are raising the skill level of professional journalists and enhancing their best practices.  Investigative journalists have the methodology, international base, and decades of experience needed to be the guard dogs against fake news – to investigate its purveyors, lay bare their agendas, and, over time, re-establish the truth upon which all democracies depend.

July 24, 2018

*John Dinges is an emeritus professor of journalism at Columbia University and lectures frequently in Latin America on media and democracy and investigative journalism.

Brazil: Will Marielle’s Murder Help Build Consensus on How to Reduce Violence?

By Marcus Rocha*

A woman with a microphone stands in front of a crowd

Marielle Franco campaigning in 2016. / Mídia NINJA / Wikimedia

The murder in March of Marielle Franco – a popular 38-year-old black, gay city councilor in Rio de Janeiro – has stirred outrage across Brazil, but debate over how to increase security has been stifled by political agendas and fake news.  Marielle and her driver were shot dead on March 14 in what press reports characterized as a professional hit job.  Some commentators have speculated it may have been retaliation for her outspoken criticism of the police and military deployments in the cities and favelas.  One of her final posts on Twitter called attention to police violence, citing the case of a young man gunned down by authorities while leaving church.

  • Tens of thousands of mourners took to the streets in Rio and other cities to protest. MC Carol, a black funk singer from favelas near Rio, reflects the popular anger with her immediate hit song entitled “Marielle Franco,” in which she sings:  “You [the system] want to kill us, control us / But you won’t silence us / even bleeding we gonna make it / marching and screaming / I’m Marielle, Claudia, I’m Marisa.”  (Original Portuguese below.)  Claudia and Marisa were women killed during police operations in favelas.

There is no consensus, however, over the meaning of Marielle’s death within a broader agenda of solutions to curb violence in Rio de Janeiro amid an escalation in federal intervention in the state, now entering its second month.  Proponents of President Michel Temer’s push to mobilize the military and other federal assets claim the Councilor’s murder justified the policy.  Opponents argue that Marielle’s assassination and other high-profile murders underscore that the mobilization has not worked, and, indeed, the deaths have fueled widespread skepticism.

  • A poll conducted by Folha de São Paulo newspaper shows these mixed feelings. Seventy-nine percent of interviewees say they support the federal intervention, but 71 percent believe that nothing has changed since it started.  Moreover, 22 percent of people living in affected communities fear the police more than they do drug dealers (16 percent).  Some 15 percent have more fear of milícias– the gangs, which often include former and current police that control much of people’s lives in these communities – and 13 percent of general criminals.  Of those polled, 28 percent say fear all of them equally.  Criminal activities like car theft and robbery have shown no sign of decline.
  • Complicating discussion of Marielle’s murder has been the torrent of fake news about her. Through Facebook pages and Whatsapp messages, far-right groups have spread unsubstantiated allegations that she had links to organized crime.  One Facebook page shows a woman and a man, supposedly Marielle and Marcinho VP, a famous drug dealer, as a couple.  Marco Feliciano, a rightwing preacher turned lawmaker, said during a radio program that Marielle’s death was “just another number” and offered a crude joke.  “They shot a leftist in the head in Rio de Janeiro,” he said.  “It took a week to die because the bullet didn’t find the brain.”  Brazilian justice directed Facebook and YouTube to remove some of the offensive profiles and videos, but fake news is still being shared through social networks.

President Temer’s official announcement that he intends to run for reelection in October deepens the political dimension of his militarized solution to the violence problem.  The federal intervention in Rio de Janeiro has become a key issue on his agenda, but the lack of results is undermining his efforts to shore up his historically low, single-digit approval ratings.  Investigations into Marielle’s murder haven’t identified any suspects yet, and there’s no discussion about changes to security laws or any other measure other than putting more army troops in the streets.  Despite the general outrage, the window for change opened after Marielle’s murder is closing fast.  The Brazilian political system is looking straight to general elections in October, and the speed and depth of the politicization of the assassination, aggravated by fake news, suggest prospects for serious discussion are nil.

[Excerpt from MC Carol’s “Marielle Franco”]

Vocês querem nos matar, nos controlar
Vocês não vão nos calar
Mesmo sangrando a gente vai tá lá
Pra marchar e gritar
Eu sou Marielle, Cláudia, eu sou Marisa

April 5, 2018

*Marcus Rocha is a CLALS Research Fellow.

U.S.-Cuba: More Facts, Less Clarity on “Sonic Attacks”

By Fulton Armstrong

U.S. Embassy in Cuba at dusk

The U.S. Embassy in Cuba. / U.S. Embassy Havana / Flickr / Creative Commons

Two prestigious publications – the Journal of the American Medical Association (JAMA) and ProPublica – released in-depth investigations this week into the alleged “sonic attacks” directed at U.S. diplomats in Havana in 2016-2017, but neither could confirm the U.S. allegations, explain the technology involved, nor provide comprehensive alternative explanations of what caused the victims’ mysterious symptoms.

JAMA studied the “neurological manifestations” that 21 diplomats linked to “audible and sensory phenomena” they reported experiencing.  Evaluations began an average of 203 days after the victims felt they were exposed to the sound waves.  The 10 joint authors validated some of the symptoms that the patients reported – including problems with cognitive abilities, vision, hearing, balance, and sleep – that had “raised concern for a novel mechanism of a possible acquired brain injury from a directional exposure of undetermined etiology.”  They had concussion-like symptoms without a concussion.  Contrary to information leaked to the press several months ago, MRI brain scans came out normal in most cases, and the doctors were unable to determine the causes of mild or moderate irregularities on three of the scans.  Based on the “high levels of effort and motivation” the patients showed during testing, the authors discounted psychological factors (e.g., “mass hysteria”).  But they were not able to link the sounds or other energy that the victims reported with the symptoms.

  • An accompanying JAMA editorial urged “caution in interpreting the findings;” noted that “a definitive conclusion cannot be reached;” said that the cases “merit consideration of a common medical, environmental, or psychological event as the potential cause;” reported that many of the symptoms described “also occur in other medical, neurological, or psychiatric conditions;” and concluded that “many potential causes for the symptoms experienced … remain possibilities.”

An investigation by ProPublica reporters Tim Golden and Sebastian Rotella, who interviewed dozens of U.S. and foreign officials, intelligence officers, and other experts, concluded that, “Even in a realm where secrets abound, the Havana incidents are a remarkable mystery.”  They report that a CIA officer first surfaced the idea that he was struck by, in the authors’ words, “a strange, disturbing phenomenon – a powerful beam of high-pitched sound that seemed to be pointed right at him,” and it was FBI that, after eight months of analysis and several investigative visits to the island, ruled out attack with some sort of sonic device.

  • ProPublica could not identify a Cuban motive in conducting or even tolerating the alleged attacks, noting that “Cuban hostility toward the American diplomats in Havana was hovering somewhere near a 50-year low.” The investigators looked into alternative attack scenarios – such as that the Russians have developed an unknown technology and conducted the operations to disrupt U.S.-Cuba relations – but concluded that evidence is lacking.  They reported allegations that the Trump Administration has used intelligence on the incidents selectively to rationalize its efforts to reverse the U.S.-Cuba normalization process started by President Obama.

Both articles, within their specialties, provide valuable texture to understanding what the U.S. personnel in Havana have experienced – while correcting some of the information leaked since the issue first arose, such as the extent and nature of the “white matter foci” in brain scans.  Neither offers a comprehensive explanation of what happened, but both lay bare the lack of evidence supporting the Trump Administration’s preferred explanation that the Embassy officers were victims of “sonic attacks.”  The difficulty understanding events is compounded by the State Department’s reluctance to allow independent examination of the patients until it was too late to look seriously at alternative explanations.  Waiting 203 days to arrange comprehensive medical examinations, such as those written up by JAMA, would suggest excessive comfort with the “sonic attack” meme.  Moreover, by refusing Cuba’s repeated requests for information on the victims’ symptoms (with patients’ identity fully masked to ensure privacy and security) and directing Embassy personnel not to call a special hotline the Cuban government established so alleged attacks can be investigated real-time, the State Department has undermined its own assurances that it’s doing everything it can to solve the mystery.  Circumstantial evidence is mounting that the Administration – having punished Cuba by drastically slashing Embassy staff in Havana and putting much of the U.S.-Cuba normalization process on hold – is fine with letting the diplomats’ ailments remain a mystery that the Cubans cannot resolve to Washington’s satisfaction.

February 16, 2018

Mexican Government Under Attack for Electronic Spying

By Fulton Armstrong

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Mexican President Enrique Peña Nieto. / Presidencia de la Republica Mexicana / Flickr / Creative Commons

Revelations of Mexico’s use of state-of-the-art software to spy on domestic critics and OAS human rights experts have dealt another devastating blow to the credibility of President Enrique Peña Nieto and the Mexican government.  Targeted in the cyberattacks were dozens of individuals and nongovernmental groups from various backgrounds, including leaders of the opposition PAN party investigating corruption allegations; anti-obesity activists lobbying for a tax on sweet carbonated soft drinks that the government opposed; and the Interdisciplinary Group of Independent Experts (GIEI) sent by the Inter-American Commission on Human Rights (IACHR) to investigate the disappearance of the 43 students in Iguala in 2014.

  • The software – known as Pegasus and estimated to cost between $32 million and $80 million – sent the targets personalized text messages with links that, when pressed, led to the total compromise of their smart phones. The messages falsely alerted victims to family emergencies, for example, and said further information was available at a link in the text.  Some purported to be from the U.S. Embassy, providing a link for updates on visa applications.  The link downloaded spyware that allowed the perpetrators full access to all voice and data communications and allowed remote control over the microphone and camera on the affected device.

Confronted with evidence developed by University of Toronto-based Citizen Lab and corroborated by the New York Times, Peña Nieto admitted in late June that his government purchased Pegasus but denied that it was used to target opponents and investigators.  He said that all of the government’s efforts have been “to maintain the internal security of the nation, fight organized crime, to generate security for all Mexicans.”  The Israeli company NSO Group, producer of Pegasus, claims it sells the software only to governments and only for specific anti-terrorism, anti-crime purposes.  The President threatened to investigate those who “have raised false accusations” – a statement his spokesman retracted several hours later – but he did acknowledge the need for an investigation.  The office of the Attorney General (PGR), which was involved in the Pegasus program, was charged with looking into the matter, drawing cries of foul from critics.

  • Officials at the UN Office of the High Commissioner on Human Rights have called on Mexico to allow a full investigation by independent experts. For the same agency that bought Pegasus to investigate its use, they said, was not credible.  An OAS official has stated publicly that the allegations “should be investigated.”

The internal spying scandal is yet another blow to the credibility of the Mexican government on human rights – whether the spying and harassment was approved by Peña Nieto or was the work of rogue agencies.  The President’s credibility has been battered by scandals involving his family and administration, and corruption by state governors from his ruling Institutional Revolutionary Party (PRI) has deepened perceptions of impunity at all levels.  Violence is also creeping back to levels experienced during the term of Peña Nieto’s predecessor, Felipe Calderón.  Among his most corrosive failures, however, has been the lack any progress investigating the brutal killing of the Iguala students.  The government’s claims that it was unable to bring anyone to justice for Iguala – while spending tens of millions of dollars to spy on and harass international experts investigating the incident – has deepened popular cynicism about the President.  Even if he accedes to an independent inquiry, the damage has been done, and he seems likely to limp, at best, toward general elections scheduled for mid-2018.  InSight Crime (a CLALS-sponsored foundation) has also called the scandal “a massive self-inflicted wound in [Mexico’s] fight against organized crime” because it compromised anti-crime operations and undermined the government’s credibility.

July 24, 2017

Post-Snowden Challenges for U.S. Information and Communication Technology Firms

By Robert Albro

infocux Technologies / Flickr / CC BY

infocux Technologies / Flickr / CC BY

A year after Edward Snowden’s dramatic disclosures about NSA surveillance in Latin America, U.S. companies hoping to make inroads into the region’s fast-growing information and communication technology market are running into increasing obstacles.  If the political costs were immediately forthcoming, especially in Brazil, the fallout for Silicon Valley’s tech giants has taken longer to assess. The biggest problem is the lingering lack of trust resulting from the revelation that the U.S. companies enabled the NSA’s eavesdropping by giving it direct access to their servers.  A 2014 NTT Communications survey found that, in response to the Snowden affair, 88 percent of information and communication technology decision-makers around the world, including Latin America, have changed their buying behavior around large-scale data storage.  In Brazil, Argentina, Mexico and Chile, “data sovereignty” has become a major issue, in the form of new data privacy and disclosure laws now shaping the direction of the region’s developing market.

According to the Information Technology & Innovation Foundation, U.S. software firms are expected to lose $35 billion in sales overseas through 2016. Forrester Research, an independent technology and market research company, puts potential losses as high as $180 billion.  Latin American investors have been questioning the wisdom of using US data storage companies, and established U.S. dominance in the cloud computing sector has already taken a hit. Cisco’s last quarterly earnings, for example, were down 7 percent – 27 percent in Brazil – even as the cloud computing market in Latin America is predicted to grow at a 26 percent clip through 2018.  The emergence of Miami as a major global tech hub and gateway to Latin America’s fast-growing information technology markets is threatened by a proposed EU-Brazil trans-Atlantic cable to circumvent the city as a key node for Latin American access to the global internet.  As investor e-news service 4-Traders has reported, Chinese tech giants like Baidu, Alibaba and Tencent are establishing and expanding beachheads in Latin America, while China’s government pursues cooperative partnerships with Latin American counterparts to accelerate the development of the region’s information infrastructure.  Meanwhile, US-based data mining and analytics firms like Choicepoint Inc., currently major players in the region’s business intelligence and online security markets, have become the subject of investigation by skeptical governments and privacy advocates in the region.

The U.S.-centric view of the internet as “free and open,” a basic feature of the business model of U.S. tech firms, is being challenged in Latin America, where the regulatory balance between free expression and privacy is increasingly tilting toward the latter.  Despite the fact that the region’s online population is the world’s fastest growing and that it boasts a dynamic tech start-up movement, U.S. internet technology firms should expect more such challenges.  Regional trends in internet governance are largely anti-American, focused on displacing U.S. commercial dominance of the internet, and promoting open-source software as alternatives to U.S. products and services.  As Latin America builds out its cloud computing market, it is doing so in ways poised to compete and not collaborate with U.S. companies.  Privacy controls and requirements to conform to local laws already create new and costly disincentives for U.S. companies, which might opt to pull up stakes.  Meanwhile, business models for Latin American start-ups are not copycatting U.S. models as frequently as in the past.  If Latin American entrepreneurs have maintained close ties with U.S. centers of innovation and investors, they are now more focused on developing their own intellectual property, instead of technology transfer, to meet specific demands of their local and regional markets.  What just yesterday seemed wildly improbable – that U.S. tech giants might lose their edge in Latin America – has become a credible scenario.

October 23, 2014

Brazilian Leadership and the Global Internet

By Sybil D. Rhodes and Leslie Elliott Armijo*

Photo credit: Blog do Planalto / Flickr / CC

Photo credit: Blog do Planalto / Flickr / CC

Brazil’s efforts as defender of internet privacy and rights may be effective even if it sparks criticism from all sides of the issue.  Along with German Chancellor Angela Merkel, President Dilma Rousseff has been among the most vocal protestors against spying by the U.S. National Security Agency (NSA).  She used her opening remarks at the United Nations General Assembly (UNGA) in September to criticize the spying.  Three months later, the UNGA passed a resolution initiated by Brazil and Germany in favor of the right to privacy in the digital age.  The Brazilian Chamber of Deputies and Senate have passed legislation, known as the Marco Civil da Internet, which web leaders and scholars consider a pioneering framework for internet governance.  Last week, Brazil hosted the international meeting NETMundial, focused on standards for name registration, domains, and IP addresses.  Rousseff and her Science, Technology, and Innovation minister, Cleio Campolina, emphasized that, as the first such event since U.S. intelligence contractor Edward Snowden leaked information about abuses, privacy concerns should be paramount at the meeting.

Brazil has considered itself an emerging leader in internet governance for at least the last fifteen years, although until 2013 “digital sovereignty” and the allocation of commercial benefits appeared to be more important goals than protecting civil liberties.  Brazil also has counted itself as an important member of a coalition — including India, China, Russia, Arab countries, and the United Nations Working Group on Internet Governance – that has called for less U.S. dominance of internet governance.  The group has proposed that the UN’s International Telecommunications Union (ITU) assume responsibility for the Internet Cooperation for Assigned Names and Numbers (ICANN), the non-profit organization in charge of distributing domain names since 1998.  An American creation, with headquarters in Los Angeles and a Board of Directors supervised by the US Department of Commerce, ICANN is seen by many as embodying U.S.-centric internet regulation.  Critics in Brazil and elsewhere claim that the private-sector and civil-society input into ICANN decisions is disproportionately pro-American.  The U.S. and its supporters, including Google, Microsoft, and civil associations like the Mozilla Foundation and the Electronic Frontier Foundation, argue that the existing regime promotes a “free and decentralized internet” – and that any changes must preserve these principles.

Since Snowden, President Dilma has also renewed emphasis on “digital sovereignty” measures.  For example, provisions in legislation passed in the lower house (but removed from the Senate version) required that Google, Facebook and other companies doing business with Brazilians store their data about Brazilians on local servers.  The government has also promoted building fiber optic cables connections that do not go directly through the United States as a way of preventing NSA espionage.  The economic and technical feasibility of some of these projects is not clear, and some of them have encountered important political opposition within Brazil – because, according to an informal survey of experts, many Brazilians are suspicious of their own government’s regulation of the internet as well.  Language in the new bill simply obligates business to obey national legislation regarding privacy.

Snowden’s revelations have given a boost to efforts to reduce U.S. dominance of internet governance, which previously was viewed as a technical issue for which the existing regulatory regime worked well.  Announcing that the U.S. Department of Commerce will not renew its contract with ICANN when it expires in September 2014, the Obama administration appears to recognize that U.S. credibility as the guarantor of a free and open internet has been undermined.  The exact technical and legal procedures through which privacy and national sovereignty might be better protected on the internet remain open questions in national and global debates.  But Brazil appears poised to play a leading role in setting a moderate middle-range course, one that allows for multipolar or global governance of the internet while protecting the liberal principles the U.S. has long claimed are core values.  Dilma could come in for criticism from both sides – U.S. conservatives who believe that only the United States can guarantee a free internet as well as “anti-imperialist” advocates who will accuse her of selling out to corporate interests.  Moderate heroes are sometimes the most unsung but also the most necessary.

*Sybil D. Rhodes is Director of the MA in International Studies at the Universidad del Cema in Buenos Aires.  Leslie Elliott Armijo is a Visiting Scholar at Portland State University and a Research Fellow at CLALS.  They are currently writing a book about international cooperation in the Western Hemisphere.

Brazil-U.S.: Implications of Postponed State Visit

By Luciano Melo

Picture2The postponement of Brazilian President Dilma Rousseff’s state visit to Washington was officially cast as the consequence of the lack of a good explanation for the National Security Agency’s cyber-espionage targeting her, the cabinet, Petrobras (the national oil company), and others.  Although the Brazilian Foreign Ministry issued a letter stating that both countries agreed to the postponement, Dilma’s remarks at the UN General Assembly on September 25 about NSA’s activities were so harsh that it was clear that frustration with the Americans’ widespread spying on Brazilians remains extremely high in Brasilia.

Experts agree that economically the postponement and bilateral tensions hurt the United States more than Brazil.  Contracts worth billions of dollars between Boeing and the Brazilian air force (FAB) are at stake, as are agreements that would favor cooperation in oil exploration and development of biofuels and others that would facilitate the transfer of “sensitive technologies.”  For Brazil, on the other hand, the postponement jeopardizes progress in talks to allow Brazilian citizens to enter the United States without visas – a project long-desired by Brazilians that was on the agenda for the state visit. Some observers in Brazil also speculate that, with the overall Brazilian economic slowdown, Dilma may actually prefer to have Brazilians spending their reais at home, not in the United States.

In a tactical sense, Dilma may have feared that Edward Snowden will leak more damaging information during her visit to the U.S., causing her even greater embarrassment at home and abroad.  In this way, fear and self-protection certainly played a role in her decision. On the other hand, the Brazilian president almost certainly saw domestic political advantages in a good old fight between the Brazilian David and the American Goliath.  She is desperately in need of boosting her popularity after the demonstrations against corruption in the country.  In fact, opinion polls show that public approval of her leadership increased from 45 to 54 percent just since the NSA dustup.

In strategic terms, the postponement fits Brazil’s strategy for claiming its position as a global player – and expressing unhappiness when it feels frustrated.  Dilma already had told President Obama in 2011 that Brazilians would seek a “more balanced relationship” with the United States. The postponement, like the speech at the UN, clearly reflects Brazilians’ desire to be treated better by the United States.  Obama’s speech at the General Assembly the same day, on the other hand, was interpreted by many Brazilians as emphasizing the United States’ traditional role as world policeman – not as the respectful neighbor in a new, multi-polar world order.  In this battle of self-images, Brazil sees itself as one of the global leaders, while the United States sees itself as the mighty one, considering only the European powers as full equals.  The broad base of Brazilians that Dilma is reaching out to is not “anti-American” in sentiment, and indeed wants a robust and respectful U.S.-Brazil relationship.  That is in the interest of both countries, but for this shared objective to be achieved, Washington will need to recalibrate its responses to Brazilian concerns.

Luciano Melo is a PhD candidate in the Department of Government at American University.

Snowden’s Revelations Rile Latin America

"Snowden Day in Brasilia, Brazil" Photo credit: midianinja / Foter / CC BY-NC-SA

“Snowden Day in Brasilia, Brazil” Photo credit: midianinja / Foter / CC BY-NC-SA

Allegations by former U.S. intelligence officer Edward Snowden about U.S. operations in Latin America have stirred further recriminations toward Washington.  According to press reports, Snowden revealed that U.S. agencies monitored internet traffic, especially in Colombia (with a special focus on the FARC guerrillas), Venezuela, Brazil and Mexico.  The National Security Agency (NSA) allegedly spied on military procurement and the oil industry in Venezuela, as well as the energy sector and political affairs in Mexico.  The Huffington Post reported that almost every Latin American country was targeted to one degree or other.

Regional reaction has been strong:

  • O Globo (Brazil) columnists, claiming that Brazil was the most spied upon country in Latin America, called the surveillance a genuine invasion of privacy that undermines both Brazilian authorities and citizens.  Former President Cardoso said, “If such activities existed, if they were done, as with all espionage, it was outside the law.”  The Senate has already “invited” Cabinet ministers to testify – and they have pledged to investigate.  (It also invited U.S. Ambassador Tom Shannon, but he is under no obligation to appear before the Brazilian Congress.)
  • El Espectador (Colombia) said the U.S. spying was an attack on Colombian sovereignty.  It quoted various senators as saying that “one does not spy on one’s friends and even less when they’ve been political allies in big decisions between states” and demanding that the government limit such activities.  Foreign Minister Holguín sent a delegation to Washington to seek explanations.
  • Mexican President Peña Nieto called the U.S. spying “totally unacceptable,” and the opposition PRD has accused the government of being “too soft” in its response to the alleged espionage.
  • The ALBA countries have been strident.  Venezuelan President Maduro has demanded “answers and explanations, [and] more than explanations, apologies.”  Ecuadoran President Correa said “we will put up with no more abuses, arbitrariness, disrespect for human rights.”

The extent of U.S. intelligence operations will not be known for decades.  It took experts 30 years, for example, to pry loose information about the CIA’s role in the coup that brought Chilean strongman Pinochet to power.  But the tensions such allegations create do not fade rapidly.  Even accounting for hyperbole in political rhetoric, these protestations cannot be helpful to U.S. short-term efforts to win Latin American help in capturing Snowden, nor in long-term efforts to revive the Obama Administration’s stated goal of building “partnership” in the region.  Continued threats – thinly veiled – from unnamed senior U.S. officials also run counter to that goal of building partnership and the related objective of minimizing fallout from accusations of spying.