This text belongs to ‘Peninsulas’, the newsletter that Enric Juliana sends out every Tuesday. If you want to receive it, sign up here.
It will be nine years very soon, on July 17, 2014, a Boeing 777 of the Malaysia Airlines company, with 298 people on board, was shot down by a missile while flying over one of the eastern regions of Ukraine controlled by pro-Russian militias. There was no formally declared war and the plane, which had taken off from Amsterdam for Kuala Lumpur, was authorized to cross the Dombas region in the direction of the Caucasus. There were no survivors.
Europe was stunned. I remember that I heard about it during a trip to Colombia and Brazil. In the Latin American newscasts, the horror seemed blurred by the distance. America, let’s not forget, is a big island. Barack Obama had not yet concluded his second term and at that time the president of the United States seemed like an insurance policy. Obama did not want to strain relations with Moscow too much as suspicions grew that the plane had been shot down by a Cossack unit armed with a battery of Russian-made Buk surface-to-air missiles. Those suspicions were confirmed after a year.
Reading the Folha de S. Paulo, one of the main newspapers in Brazil, I realized that from Latin America the European mosaic is seen as a distant and especially convoluted place. I remember a very lucid chronicle about the contradictions of European countries when discussing what sanctions could be imposed on Russia for that outrage. They all agreed to sanction, but each European country had its own list of products to protect. The next day, Folha surprised me again. He announced to five columns that the Brazilian government had just closed an agreement with Moscow to increase meat exports to Russia. Brazil did not have the slightest intention of sanctioning the Vladimir Putin regime, on the contrary. At that time, Dilma Rousseff, Lula da Silva’s successor, was ruling. Jair Bolsonaro had not yet arrived.
While preparing this weekly bulletin, a few days ago I did a search on Brazilian meat exports to Russia and came across an interesting chronicle from Folha de S. Paulo. The Russian Minister of Foreign Affairs, Sergei Lavrov, traveled to Brazil in April to agree on the relaunch of the purchase of meat, as well as a greater export of Russian fertilizers to the largest country in Latin America. Fertilizers, this is a key product to better understand the position of the majority of Latin American countries in the face of the drama taking place in distant Europe, back in the ancient lands of the Don Cossacks. We have talked a lot about gas in the last two years and less about fertilizers. Without gas there are no artificial fertilizers.
The German chemist Fritz Haber took a revolutionary step in 1913 by achieving, with the help of catalysts invented by Carl Bosch, the manufacture of nitrates on a large scale, from ammonia, without necessarily having to resort to Chilean saltpeters, the famous nitrate of Chile, the object of one of the most beautiful publicity campaigns in history. The British had blocked the arrival of Chilean nitrates in Germany and the militarized German chemical industry found the alternative, since nitrates were also necessary for the manufacture of explosives. The Haber-Bosch process currently produces more than 100 million tons of nitrogen fertilizer per year, on which the livelihood of a third of humanity depends.
If the price of gas goes up, the price of artificial fertilizers goes up. And that is what has happened in the last two years, with the consequent decline in agricultural production in many countries around the world. Russia not only extracts huge amounts of gas, it is also the world’s leading exporter of fertilizers. Russia not only has an arsenal of 6,000 nuclear bombs, it could also bring Latin America to its knees by reducing the sale of fertilizers, and cause greater famines in Africa by restricting grain exports. I think we are understanding the war in Ukraine better. China and Russia, in this order, are large buyers of raw materials in Latin America. Soy and meat, mainly. Brazil, for example, sells more to China than to the United States and the European Union combined.
Paraguay is an example of economic growth thanks to the sale of meat to Russia. That cattle country can grow 4% in 2023 in a context of general stagnation, according to projections by the United Nations Economic Commission for Latin America and the Caribbean (Cepal). Brazil could raise its head a little more (2%). Stagnation in Mexico and Colombia with growth of just over 1%, and worrisome setbacks in Argentina and Chile. Catastrophic situation in Cuba, with rumors, pending verification, of a Chinese offer for the installation of an electronic espionage center on the island. The other exception is Venezuela, which may grow by 5% thanks to the revaluation of its oil as a result of the oil embargo on Russia. Again, the Ukrainian war. A truce is opening between the United States and the Venezuelan government ahead of the presidential elections scheduled for 2024. Delegations from both countries met secretly in Qatar recently.
Soybeans, meat, oil and fertilizers. Let’s remember this quartet before judging political positions. The only leader of the Latin American left who has expressed explicit support for Ukraine is the young Chilean president Gabriel Boric, who has made a significant rectification of his policy after two severe defeats in the constituent process.
Europe is no longer the center of the world, but the general elections in Spain on July 23 will be followed with great interest by all Latin American governments, mostly located on the left in the largest and most decisive countries. Spain can be a bridge between Latin America and the European Union in a very delicate phase of international relations. The EU-Latin America and Caribbean summit scheduled for July 17 and 18 in Brussels, under the Spanish presidency, will be important. Bridge or siege. Depending on how things go, Spain could also become a fearsome battering ram in the near future against governments that do not fit in with the interests of the increasingly powerful Latin American colony installed in the center of Madrid. Here is the dilemma. Indeed, the elections on July 23 are going to be decisive in many aspects.
Gradually the city of Madrid is becoming the new Miami. There is an avalanche of Latin American money in the capital of Spain, increased by political circumstances -the new and not so new governments of the left in the main Latin American countries do not like the great fortunes- and by the restrictions of the United States in the concession of residence permits, even for people with high income levels.
There are more incentives: the language, attractive real estate prices for people with a high purchasing power, ease in obtaining a residence permit, the possibility of accessing Spanish nationality in the future (EU passport), safety on the streets, a attractive and interesting country, good business opportunities and the proximity of good European universities for children. The conjunction of all these factors is turning Madrid into the new mecca for the rich Latin Americans willing to move between Europe and America. Venezuelans, Mexicans, Colombians, Peruvians…
Not everyone is a billionaire. Middle-class families dissatisfied with the political line of their governments and attracted by a more affordable Madrid than the city that has become Florida’s great showcase are also arriving in the capital of Spain. More affordable and more secure. In certain areas of the Salamanca district of Madrid, the ownership of real estate is beginning to be predominantly Latin American. The restaurant area on Jorge Juan street, between Serrano and Velázquez, has become an emblem of this new and thriving reality.
The new and powerful Latin American colony of Madrid has a precedent in the important fortunes that arrived in Madrid between the fifties and sixties of the last century accompanying great exiles welcomed by General Franco: the Argentine populist leader Juan Domingo Perón, the family of the fierce the Dominican dictator Leónidas Trujillo, the Venezuelan Marcos Pérez Jiménez, the Cuban dictator and billionaire Fulgencio Batista… These capitals left their mark on the upper part of Avenida de la Castellana, as can be seen in the gazetteer of the Chamartín neighborhood.
The new Miami from Madrid has not yet voted in Spain, but it influences. And it will influence much more with the passage of time.
