Yesterday I examined Nicaragua’s approval of a massive concession to build an interoceanic canal through the lens of its viability and the government’s motivation for rushing the project through. Equally interesting though, is the fact that the concession has been granted to a Chinese company and what that says about Latin America’s perceptions of China and the limits of the left’s anti-imperialism and self-professed socialism.
While many in Latin America, including even some on the right, view significant involvement of US and European companies in “critical” industries with suspicion, few seem to have developed the same attitude toward Chinese companies. To a large degree this is due to China being the new alternative; there hasn’t yet been a Chinese United Fruit Company in Latin America. Moreover, particularly on the Latin American left, there is a strong sense of solidarity with China. Some of this is admiration for Chinese resistance to the US during the Maoist era, and in less radical circles, it is a form of South-South solidarity—China is considered more in tune with Latin America’s development needs because it is also part of the Global South.
While understandable, this perception of China is exceptionally naïve. China, at least as of now, is not a rapacious, burgeoning imperial power in Latin America, but it is a giant country with a fragile (if deeply rooted) political system that must put domestic considerations at the forefront. This typically manifests itself in a sort of neo-mercantilist strategy in Latin America. The Chinese government and Chinese firms are happy to build infrastructure for, provide loans to and pursue joint resource extraction projects with Latin American governments, but these are projects that ensure a stable supply of resources keep the Chinese economy growing, not ones that necessarily add any productive capacity in Latin America. Beyond that, Chinese firms have been known to bring Chinese workers with them for the most lucrative jobs, blunting the job-creating effect of Chinese investment.
Why, then, would an anti-imperialist and socialist government in Nicaragua give a fifty year concession to build the most important piece of infrastructure in the country’s history to a private firm from a foreign country? Most importantly, for the Latin American left, being anti-imperialist means being anti-American and occasionally anti-European. This is how Fidel Castro can be described as an anti-imperialist despite the decades-long presence of Soviet troops in Cuba and his government’s marching lock-step with the Soviet Union while it invaded Czechoslovakia and Afghanistan. So while no politician would ever dare giving a fifty year concession to an American company, one can with a Chinese company. Moreover, since there are geopolitical implications to a second interoceanic canal, having the Chinese build it is a way to agitate the United States and challenge the Monroe Doctrine.
Similarly, socialist in the context of the new left in Latin America is better understood as referring to a highly statist political economy, but not one where there is a significant attempt to have the state own even a majority of the means of production. In the case of Nicaragua, it is even more simply crony capitalism. Daniel Ortega is pro-business when it benefits him either personally or politically. In this instance, it allows him to wrap himself in the glory that comes from finally fulfilling Nicaragua’s 200 year national dream, with, as I wrote yesterday, limited immediate downside risk on his part.