Sunday, June 13, 2010

Chinese Military Involvement in Bolivia

The Chinese are supplying Bolivia with military vehicles and possibly more.

Military and security industries, often backed by governments, have been pursuing Latin American markets to expand their customer base on the continent. Both France and Russia sent high-powered delegations to South America to pitch for lucrative arms sales on preferential credit terms. Russia signed deals with Venezuela and France and initialed agreements in Brazil worth tens of billions of dollars.

Brazil insists on the transfer of technology and deals that will enable it to develop its own defense manufacturing industries. The smaller countries, however, lack both financial and human resources to take on technology-transfer arrangements and prefer a straightforward import of manufactured defense items.

The China-Bolivia agreement is one such deal, where the Chinese have begun supplying Bolivia with military vehicles and spare parts and more, possibly on easy repayment terms, analysts said. Bolivian President Evo Morales said China would also help Bolivia launch a low-orbit satellite "to fight drug cartels".

Bolivia has been struggling with outmoded defense equipment. Its deal with China sparked speculation that the milita
ry modernization may signal border problems with neighboring Paraguay.

Bolivia and Paraguay went to war in the 1930s over rumors of oil deposits in the bordering Gran Chaco reg
ion (no oil has yet been found). In the fighting, the bloodiest in South America in the 20th century, Paraguay captured some Bolivian land, which it continues to hold. The loss of land to Paraguay is a sore point with Bolivians. They officially mourn each year the loss to Chile of their access to the sea in the 1883 War of the Pacific.

Despite a return to peacetime conditions, any military armament triggers tension between the two countries. Morales attempted to defuse anxiety. In comments this week, he denied that Bolivia's military purchases from China were a provocation to Paraguay, and condemned critics for trying to stir up trouble between the neighbors. He called for peaceful coexistence to deliver more effective economic programs to the people of the two countries.

Paraguay media reported Bolivia has eight bases and 9,000 troops near the Paraguayan border. Morales said Bolivia needs to strengthen its border security against drug smuggling and armed militants usually working with drug smugglers.

This donation of military equipment, worth 2.6 million U.S. dollars, is the third Chinese contribution to the Bolivian military in recent years and significantly increases Chinese influence in an area traditionally dominated by the United States.

“It is the authorities’ obligation to equip the Armed Forces to serve the Bolivian people. These engines will be of much help to the social programs, to the combat against illegal trafficking and to safeguarding the security of the citizens,” Morales said.

Qu, the Chinese representative, said that the donation is a part of the “friendship and cooperation protocol” of the armed forces of both countries. “Both countries have common interests in safeguarding peace and promoting development. China has always given its support to Bolivia in its development,” Qu said.

China donated two modern patrol boats to the Bolivian army in 2009, after its previous delivery of military equipment in 2007.

In a further development, the Morales government announced that China will provide Bolivia with a $67 million loan to build infrastructure in the mineral-rich Oruro region. Other recent deals have included a $60 million loan from China late last year, part of which will be used to purchase natural gas drilling rigs. Bolivia has also announced plans to buy six Chinese light military aircraft worth $58 million "to fight cocaine traffickers".

"Now the President, the Vice President and the Finance Minister have to guarantee the funds, so that we can sign a contract and ... in three years, as the technicians are saying, we'll launch the Tupac Katari satellite," Morales said after signing the deal in La Paz.

The satellite, which will be named after an Indian who led an uprising against the Spanish conquistadors in the 18th century, will improve Internet access and communications in remote rural areas, Morales said. Public Works Minister Walter Delgadillo said the accord lays out the technical details of the project and the next step is to secure financing from China.

The Bolivian government is negotiating a loan with China for 85 percent of the value of the satellite. Bolivia announced in February the creation of a space agency to oversee the launch of the satellite. The agency will also coordinate the implementation of education, health and weather monitoring projects that would use services provided by the satellite.

The increasing Chinese role marks a shift in Bolivia, one of the poorest countries in Latin America, which for decades relied on U.S. aid.

Morales, a Washington critic, has been at odds with the United States since he took office in 2006. Two years later, he expelled the U.S. ambassador after accusing him of conspiring with the opposition to destabilize his government.

China has been strengthening ties with other governments in Latin America, signing trade deals and providing financing to Venezuela and Ecuador.

Last month, Chinese oil firm CNOOC's purchased a stake in Argentina's Bridas Holdings for $3.1 billion, a deal that highlights China's hunger for energy resources to feed the world's fastest-growing major economy (Personal Note: Watch for a move by China to purchase BP while it is in weakened condition as a result of the Gulf Oil Spill Disaster).

On a Lighter Note:
(this first one is for Margaret)




Ted Leddy said...

Very interesting article as always Gary. I very much enjoy your posts on Chinese expansionism.

I enjoyed your "drunken sailor" song too. You might like this one, which depicts a recent Irish victory against the American Navy

Gary said...

Thanks Ted. Chinese intentions have always been my main area of concern, a habit I developed in my more 'militant' days.
What concerns me most in this case is China real interest, Bolivia's rich deposits of lithium, something that has yet to be developed.

Thanks for the Irish vs American Navy link - I enjoyed it very much and may want to stick in a future post.