Home inFocus Iran’s Latin American Power Play

Iran’s Latin American Power Play

Dina Siegel Vann Summer 2007

In January 2007, Iranian President Mahmoud Ahmadinejad led a five-day official visit to Venezuela, Nicaragua, and Ecuador. His visit coincided with the inaugurations of Nicaragua’s newly-elected president Daniel Ortega and Ecuador’s Rafael Correa. While in Caracas, he signed 11 new agreements and approved a $2 billion joint investment fund to finance projects intended to “thwart U.S. domination.” In Nicaragua, he signed agreements for bilateral cooperation in 25 sectors. In Quito, he expressed the desire to increase Iranian-Ecuadorian cultural and commercial cooperation. In February 2007, Iran’s Foreign Ministry hosted “The First International Seminar on Latin America: Its Role and Status in the Future International System.” The encounter brought together representatives throughout the region to discuss ways to strengthen ties.

Iran now has fully operational embassies in Cuba, Venezuela, Mexico, Brazil, and Argentina, with plans to strengthen its diplomatic presence in Bolivia, Chile, Colombia, Ecuador, Nicaragua, and Uruguay. Looking forward, Tehran seeks to exploit the populist trend that is sweeping the region, led by President Hugo Chávez of Venezuela, and to create alliances with countries that are, or could potentially be, antagonistic to the United States.

The Venezuelan – Iranian Alliance

The alliance between Venezuelan president Hugo Chávez and Ahmadinejad is critical to Iran’s Latin America strategy. Indeed, it is crucial to each leader’s plans to widen his sphere of influence and shift the world’s balance of power. During a December 2005 International Atomic Energy Agency (IAEA) meeting, Venezuela was one of only two countries to reject a recommendation to refer Iran to the Security Council, and in February 2006, it joined Cuba and Syria in a similar vote. In late December 2006, Venezuela was the only country to oppose United Nations sanctions on Iran, defending its right to develop nuclear technology. More recently, Chávez has vowed that Venezuela would stand by Iran and halt oil exports to America should “imperial powers” attack Iranian nuclear facilities.

As founding members of OPEC, Venezuela and Iran have consistently backed efforts to undermine the U.S. petrodollar. In October 2005, Chávez announced that his country was ready to move its foreign-exchange holdings from dollars to euros to undercut the U.S. currency, and in December 2006, Iran made the same declaration in response to the U.S.-led pressure on its economy. Both countries have pursued bolstering oil prices by controlling production volumes.

Since coming to power in 1998, Chávez has pursued increased cooperation with Iran. He has made five official visits to Iran and has publicly stated that he considers Iran a model for development. Iran has cemented this relationship through investment, with bilateral trade currently standing at approximately $2.5 billion. In March 2007, Iranian vehicles were introduced to the Venezuelan market by the joint venture Venirauto. Also, Petroleos de Venezuela (PDVSA), through its subsidiary Corporacion Venezolana del Petroleo (CVP), signed a deal with the Iranian company Sadra America Latina C.A. to create the joint-venture Venezirian Oil Company.

The potential dangers of economic and political cooperation between Iran and Venezuela are overshadowed by several new and dangerous developments. Recent reports have indicated that there are Hizbullah cells operating in Venezuela, predominantly in Margarita Island. While it is known that Hizbullah operates in the “Tri-Border Region” linking Brazil, Paraguay, and Argentina, the Iran-sponsored terror group now stands to gain a new stronghold in the region as Chávez turns a blind eye to its fundraising and alleged drug trafficking activities.

There is also reason for concern over the March 2, 2007, announcement that Iran Air, Iran’s national airline, had completed its first direct flight to Venezuela. This weekly, commercial flight linking Tehran and Caracas stops in Damascus, Syria, before crossing the Atlantic Ocean. Travelers from those countries to Venezuela are visa-exempt, raising concerns that terrorists may attempt to exploit weak Venezuelan immigration controls to undertake acts of terror in the U.S. or elsewhere in the hemisphere.

The Cuban Alliance

Apart from Venezuela, Iran’s most natural ally in the region is Cuba. Indeed, both Cuba and Iran suffer from U.S. sanctions for their rogue activity. As a result, Cuba has repeatedly defended Iran’s “inalienable right to access nuclear energy.” In a February 2006 vote at the International Atomic Energy Association (IAEA), Cuba was one of only three countries (along with Venezuela and Syria) to vote against a resolution challenging Iran over its nuclear program.

Some Cuba analysts report that Iran has deployed an electronic jamming station outside Havana, which Cuba uses to block broadcasts beamed by the U.S.-backed Radio Marti. Cuba and Iran are now exploring cooperation in the textile, agriculture, and petrochemical fields. It is estimated that Tehran-Havana trade will top $50 million in 2007.

Economic Outreach

Seeking to replicate the Cuban and Venezuelan successes, Iran is now reaching out to a number of countries in Latin America, using economic cooperation as a springboard for closer ties. Iran’s exports to the region have reached an all time high of nearly $2 billion, while Ahmadinejad and other government officials travel regularly to the region to intensify contacts. Tehran’s goal is to bring these nations into the Iranian orbit as it continues to challenge the West.

Iran and Bolivia signed a Memorandum of Understanding in August 2006 to expand bilateral industrial and mineral cooperation. At the signing, Iran’s Deputy Industries and Mines Minister for Economic and International Affairs, Mohsen Shaterzadeh, said that Iran’s private sector was ready to invest in Bolivian infrastructure projects and industry. As South America’s poorest country, despite having the second largest natural gas reserves in Latin America, Bolivia badly needs this assistance.

The rise of Daniel Ortega has led to closer Iran-Nicaragua relations. Ahmadinejad was a guest of honor at Ortega’s inauguration ceremony in January 2007, where the Iranian president was awarded two state medals. The two leaders signed agreements for bilateral cooperation in 25 sectors including energy, trade, the economy, infrastructure, student exchange, and joint business ventures.

In 2004, Brazil and Iran took a first step toward greater economic and political cooperation by signing a Memorandum of Understanding for increased communication and commercial exchange.

In the case of Mexico, a country with an interdependent relationship with the U.S., Iran’s goal has been to build economic ties that could some day yield political fruit. In February 2005, Iran and Mexico signed a Memorandum of Understanding to promote cooperation in oil, gas and petrochemical sectors. Iranian authorities have already met with officials from Mexico’s state oil company, Pemex, to pursue these goals.

The Argentine Garrison

While Iran has successfully bolstered ties with left-leaning nations of Latin America, Argentina is one country with which it has little hope of forging an alliance. Argentina suffered two Iran-sponsored terrorist attacks in Buenos Aires in the early 1990s. The bombings of the Israeli Embassy and the Argentinean Jewish Mutual Association (AMIA) in 1992 and 1994, respectively, caused 115 deaths and more than 500 injuries. The AMIA bombing on July 18, 1994 was the deadliest terrorist toll ever in Argentina’s history, and resulted in the largest Jewish death toll from terrorism outside Israel since the Second World War.

On October 25, 2006, after more than a decade of bureaucratic red tape, the Argentine government released its official report on the bombing, confirming Iran’s and Hizbullah’s responsibility for the AMIA attack. The report was upheld in Argentine court, and in March 2007, Interpol’s executive committee unanimously approved the decision to issue Red Alerts for suspects named in the report, including Hizbullah mastermind Imad Mugniyah, former Iranian President Hashemi Rafsanjani, Ali Fallahijan, a former intelligence chief, and Ali Akbar Velayati, a former minister. Indeed, the Argentine population has little interest in diplomatic relations with a country that is known to have caused so much chaos in their country.

What’s Next?

Iranian Foreign Minister Manouchehr Mottaki spent a week in April 2007, visiting Venezuela, Cuba, and Nicaragua. Mottaki and other Iranian officials continue to chase Ahmadinejad’s dream of an anti-U.S. axis in the region, spurred by joint ventures, political and economic agreements. Tehran hopes that this growing alliance can somehow offset the international community’s opposition to an Iranian nuclear program. Iran further hopes to find new partners that embrace its anti-American ideology; that oppose what is generally perceived as interventionist Western policies; and that seek a political realignment that weakens the United States.

Cuba and Venezuela are firm in their commitment to stand with Tehran as it defies the world and continues to develop its nuclear program. If Iran’s plan succeeds, its economic and political overtures could tempt other nations into a dangerous Latin American-Iranian alliance that supports Iran’s foreign policy of proliferation and terrorism, opening up yet another front in the global war on terrorism.

Dina Seigel Vann, is the director of the Latino and Latin American Institute at the American Jewish Committee. The author wishes to acknowledge Stephanie Guiloff, Assistant Director, and Amanda Farfel, Research and Program Associate, for their contributions to this essay.