Instruction: Write an article about: Inside Latin America’s new currency plan, with Ecuador’s presidential candidate Andrés Arauz. Use the themes and topics represented by the tags provided as guidance for the content. It's not necessary to include the exact tag words in the article, but the article should reflect the essence and context of these tags.

Input: Alberto Fernández, Andrés Arauz, Argentina, Brazil, Bretton Woods, BRICS, Ecuador, Latin America, Lula da Silva, Rafael Correa, Sur, Zoltan Pozsar

Output:
Ecuadorian economist and former presidential candidate Andrés Arauz explains Latin America’s attempt to create a new currency and regional financial architecture, to challenge the “hegemonic, neo-colonial” US dollar-dominated system.

Geopolitical Economy Report editor Ben Norton spoke with Ecuadorian economist Andrés Arauz, a former presidential candidate who came close to winning the 2021 elections.
Arauz discussed Latin America’s attempt to create a new currency and regional financial architecture, to challenge what he described as the “hegemonic, neo-colonial” US dollar-dominated system.
“We need the type of bank that can really serve the Global South”, he urged, calling for a “clearing and settlement bank that can allow for these transactions to take place, and that is not afraid of sanctions from the United States”.

“We’ve seen tectonic shifts in the functioning of the international monetary system”, Arauz said, agreeing that the world is now seeing a new kind of Bretton Woods III emerge.
“There are many different initiatives, but this has to find a reasonable path forward, which goes along with regional integration mechanisms. So you have a sort of Eurasian hub, a pan-African hub, a Latin American hub, and then you have connections among those regions”.
“The society of the 21st century has to be a society of blocs, of large geopolitical blocs that can effectively allow for a sort of planetary governance, in more balanced terms, but also have common positions, but then within those blocs you can have quite a bit of diversity. So I think that’s how it will end up working also in the monetary sphere”.
“This is a historic moment for humanity”, he argued. “We have to show that there is an alternative, and we are in the conditions to prove that”.
But Arauz warned that Latin American unity must come quickly: “We cannot be facing this geopolitical moment, basically a world war, as 33 independent, small republics; this has to be faced as a Latin American bloc. And the political conditions are there. I just hope that we can get the structures, the instruments, in place for the regional bloc to actually assert itself”.

BEN NORTON: Hey everyone, I’m Ben Norton, and this is Geopolitical Economy Report. Today, I have a real pleasure of being joined by the Ecuadorian economist and politician Andrés Arauz.
He was the former minister of knowledge and human talent in the government of Rafael Correa in Ecuador. He was also a former general director of Ecuador’s central bank.
And he is brilliant when it comes to understanding new forms of finance, new economic alternatives.
He’s been a longtime critic of the International Monetary Fund. He has discussed a lot the importance of building a new currency system in the region, and has also discussed central bank digital currencies.
So that’s exactly what we’re going to be speaking about today.
Now, there was also recently a regional election in Ecuador, and the leftist Correísta movement swept the elections and won more than any other party. They won in the seven most populous regions, and they also won the mayorship of the major cities of Quito and Guayaquil.
So we are going to talk about the election, but I want to begin, Andrés, speaking about the discussion of creating a new currency in Latin America for bilateral trade.
There has been a lot of debate about this, especially in the financial press. We’ve seen economists from the IMF have denounced it as a “crazy” idea. But this is not necessarily a new idea.
You yourself were involved in a previous attempt at creating a unit of account in Latin America for international trade, which was called the Sucre. And I do want to ask you about that in a moment.
But I’m wondering if you can discuss this meeting that was held this January between the Brazilian President Lula da Silva and Argentine President Alberto Fernández. And in that meeting, Lula said that they are beginning the process of research to create a new currency, which he has tentatively referred to as the Sur. There are a lot of questions about this. I know it’s in the early stage.
I’m wondering what your thoughts are on this. You yourself have been promoting this idea for a long time.
ANDRÉS ARAUZ: Hi, Ben. Thanks for having me. Yeah, the Sur is an idea that has been in the minds of Latin American economists for decades. And we have a lot of historical precedents.
In the ‘80s, there was an initiative called the UMLA, Unidad Monetaria Latinoamericana, within the ALADI, which is the Latin American Integration Association, so that central banks could have this common currency and they could make transfers, international transfers amongst the different countries of the region without having to do it recurring to the dollar or the US financial system.
And then, you know, we had the Sucre initiative among the ALBA countries, that works, that is operation right now.
We also had the case of the Peso Andino for the Andean countries, that likewise was created in the ‘70s and ’80s.
And now we’re discussing the Sur.
Some of the critics have incorrectly basically called it a unique currency, or a currency that will replace national currencies. And that is not so.
The idea is not to replace each country’s national, sovereign currency, but rather to have an additional currency, a complementary currency, a supranational currency for trade among countries in the region, starting with Brazil and Argentina, that are the sort of two powerhouses in the Southern Cone, and that could then amplify to the rest of the region.
That’s a very important concept because people tend to compare this to the euro, and the euro had a very long process of getting there. But the euro is actually in every person’s physical wallet.
In our case, we’re not talking about replacing national currencies. We’re not talking about convergence criteria and fiscal convergence, like the Maastricht Treaty, imposing austerity and debt limits to each country.
That is not the case of our proposal. It starts from the banking sector, from the functioning of the international payment system dynamics, very much in the spirit of Keynes’ Bancor.
Now, I think that translated to the 21st century means that the Sur, this common additional currency for trade transactions within the region, has to have financial innovation incorporated in the design so that, for example, we don’t have to use the banks in Miami or in New York just to transfer funds between Chile and Uruguay, or Argentina and Colombia.
Right now, what happens is that, when a transaction from either of these countries has to take place, they have to first find what’s called the correspondent bank in the United States, usually a bank in Miami or in New York City, where the money flows.
Now, that’s not only inefficient in energy terms, and information terms, but it is also much slower because, by having to go through the US financial system, it has to comply with the United States sort of know your customer, anti-money laundering, combating financial terrorism laws and regulations. And that’s in principle okay, but they take a long time to process.
And if you think about it, if it’s a transaction between two countries within Latin America, why would they have to comply with U.S. regulations to begin with? It could be a regional financial arrangement that could make transfers in real time, what’s called real time gross settlement of these transactions.
You could have this immediately available. And you could make trade much faster. And it could be a way of promoting regional economic integration, especially for small and medium enterprises.
You usually have to wait, you know, five or six days for a transaction to finally settle.
So this is an opportunity for Latin American small businesses as well, and hopefully it can be deployed in a very quick manner.
You know, this has been discussed in theory and practice for decades. So it really shouldn’t be a challenge to get this going forward fairly quickly.
BEN NORTON: Thank you for describing that. And you mentioned something very important, Andrés, which is the Bancor.
This was the proposal that John Maynard Keynes had made back at the Bretton Woods conference in 1944, in which the US dollar was established as the global reserve currency. This is an international unit of account, so each country could still maintain its own sovereign monetary policy.
And I’m glad that you stressed that this is not based on the Eurozone model, where a country that has a current account deficit like Greece is just going to constantly be trapped in debt, whereas countries that have current account surplus like Germany, which export so much, they maintain this kind of economic hegemony.
I want to talk about what happened with the Sucre. You mentioned that the Sucre technically is still, it’s still possible to use this currency.
A lot of people associate the Sucre with former Venezuelan President Hugo Chávez, who had been a huge promoter, but it was actually under Rafael Correa in Ecuador, in whose government you served, that used the Sucre more than any other country in the region.

This is a graph showing the volume of trade, at least converted to U.S. dollars, of the use of the Sucre in bilateral trade in Latin America from 2010 until 2016. And Ecuador was responsible for the vast majority of the transactions.
Now, we do know that there are political reasons for [the reversal of] that. After Correa left power in 2017, we saw that he was betrayed by his former vice president, Lenín Moreno, who basically did a kind of internal coup.
But I’m wondering if you can discuss your experience with the Sucre, I believe you were involved in helping to develop it, what lessons you have learned from it, and if you think that it’s something that could be brought back in the future, or if the Sur is going to kind of replace it, or, in general, if you can reflect on the experience of the Sucre.
ANDRÉS ARAUZ: The Sucre is like building an extra highway for financial transactions.
So you have the conventional financial system that by default requires that a US correspondent bank intermediates financial transactions, and that correspondent bank is usually based either in Miami, for the Latin American countries, or New York City, if it’s a larger business.
For example, a transaction between South America, any South American country and, for example, an East Asian country, it usually requires a correspondent bank account, and a common correspondent bank account, and that’s very hard to find.
So they have to call their bankers, and they say, “Hey, do you have any relationship with a bank in Argentina?” And they say, “No, I don’t. Let me call my bankers’ bankers”.
Then they make successive calls until they find that they both share an account at the Federal Reserve, for example, or a big bank like JP Morgan.
And so then these banks, which are in fact grouped in these large global private commercial banks, that intermediate financial transactions, are grouped into an organization called the Wolfsberg Group.
This Wolfsberg group is the group of the 13 largest international banks, and they settle most of the international trade in the world.
And they are all private banks. And they have their own standards, their own principles, and their own logic as to how they work.
Of course, they want to make money, but then they also follow their country of origin’s rules and regulations, which are hegemonic in nature, neocolonial in nature as well, and are not designed for the interests of the sort of peripheral countries or marginal users of these transactional systems.
So in the case of the Sucre, it’s a highway, it’s a platform that connects the central bank of each of the countries, of the ALBA countries, with the domestic commercial banks, where people have accounts, and then the central banks are connected amongst themselves with the Sucre platform, which is really a piece of software, a messaging protocol, which allows the central banks to talk to each other and to pay each other in Sucres.
The Sucre is the unit of account of the system, of this platform system. And like I said, it’s fully operational, in technical terms. Anyone can do a transaction, if they want to.
But politically, when Lenín Moreno came to power in Ecuador, he decided to stop sending the Ecuadorian delegates to the monthly and yearly sort of meetings that the Sucre council had, had, where they were discussing the technical operational workings of the system.
And so after Ecuador stopped sending the delegates, some of the issues on the technical workings of the Sucre started to sort of be on pause and on hold. And until now, they’re like that.
So it was a political manipulation of the process to make it slow at first, and then to completely halt. However, the software itself, the technical design, and the possibility to make transactions, could be easily retaken, if there is just enough political will to bring it back to life.
The Sur also has other precedents in the Southern Cone of South America, which was the SML, Sistema de Pagos en Monedas Locales, or Local Currency Payment System, that within the Mercosur was developed by first Argentina and adopted by Uruguay and Paraguay as well, which allows exporters to invoice their sales in local currency to get paid in local currency with transactions within Mercosur countries as if they were domestic transactions.
But then the central banks settle, at the end of the day, at the New York Fed. So again, they have to go to this sort of correspondent banking network, designed where the New York Fed has protagonism.
So it won’t be hard to sort of merge these initiatives and to have the Sur come out of that. It is not necessary to have, you know, a physical or legal merge of these two instruments. It is enough to have a conceptual merge.
We have the ideas from one, the ideas from another. We can easily design something new that takes the best from all of these designs, the historical precedents that we do have in the region.
That’s why I trust that it can be deployed fairly quickly.
I followed President Lula and President Fernández’s announcement, again, it was announced as an initial research phase.
I have been involved in the working group for the Sur with some people from the ministry of finance of Brazil.
And I think we can really go forward fairly quickly. But again, our challenge here is not technical in nature. We know how to solve all these issues.
We have the experience; we have the concrete, tangible experience. What we need is to present a system that will be supported by our local productive sectors, so that it can be sustained, so it can be sustainable in time, and not be just subject to a political backlash or, you know, flip flopping, like we have seen in the case of the Sucre, or in other initiatives in the region.
We need to make this long lasting. And for that to work, we need the productive sectors, small and medium enterprises, businesses actually use the platform and the mechanism.
BEN NORTON: Yeah, I’m glad you mentioned that, Andrés, because I was going to ask you about the politics of this.
I should say that I want to apologize a little bit to you, because I know I landed you in some hot water in Ecuador. I wrote an article after, in Brazil, after Lula won the presidential election in October, you published an excellent article in Spanish explaining your new plan for a “regional financial architecture”. And I translated it into English and was promoting it.
Advising Brazil’s President-elect Lula, Ecuadorian economist and leftist presidential candidate @EcuArauz made a blueprint for a “new regional financial architecture” to unite Latin America, including a currency to challenge the hegemony of the US dollar https://t.co/o7L0fN236F
— Ben Norton (@BenjaminNorton) December 1, 2022

And I saw that the Ecuadorian right wing was very angry, because they said that you are planning on ending the dollar as the Ecuadorian currency.
Of course, people might know that, in Ecuador, the dollar has been the national currency ever since the 1999 banking crash, that was actually overseen by former Economic Minister Guillermo Lasso, who is the multimillionaire banker who is now the president.
So I’m sorry for leading the right wing to attack you, even though that’s not what you proposed. You didn’t propose changing the national currency of Ecuador. And they’re obviously misinterpreting what you wrote.
But what you did write in that article, an important point, is that Latin America, at least South America at this moment, has a narrow window of time, because at the end of 2023, there are going to be presidential elections in Argentina.
And if the right wing comes to power, and especially if someone who is very extreme like perhaps Javier Milei, who is this, you know, libertarian, right-wing Koch Brother kind of figure in Latin America, I highly doubt that he would be willing to continue with this process of economic regional integration and the creation of a unit of account for trade between countries in the region.
How can a system — I know this is not an easy question to answer — but how can such a system like this be created, so if a Bolsonaro, or a Milei, or a Lenín Moreno comes to power, they can’t just sabotage it, like they have done in the past?
ANDRÉS ARAUZ: Yeah, it really is a challenge. But we know the answer. The answer is to have, you know, to surpass the point of no return.
And to do that you first have to overcome the theoretical discussion. It can’t just be an idea floating around. It has to try to become at least a treaty, a law, some regulation of some sort that can exist in reality, not just an academic proposal.
So the first step is to do that. Then, of course, we need to go beyond just having it on paper. We need to have users of the system that can then become the incumbent defenders of the system, of the new system, of the alternative system.
So that is why we need to go extremely quickly.
This is what really bothers me, because sometimes, you know, the heads of state make these grand announcements, which are huge in terms of their implications, but then our bureaucracies, Latin American bureaucracies, and especially the foreign ministries do not move at the same pace that the presidents are going. They go very slowly.
And, you know, with all these bureaucratic messes and they’re still sending physical snail mail to exchange letters and you have to send a letter to the embassy, sort of ignoring that we live in the 21st century, that you have email, that you have WhatsApp, that you can send an instant message, and then you can actually make decisions quickly, and go forward quickly as well, where you have a huge pool of talent available anywhere in the world, and you can have meetings via video calls.
Somehow, this does not work in the case of Latin American government bureaucracies, foreign ministries. We have to go really quickly.
I mean, I am a technical person, I know my stuff. But I’m also active in politics. And I immediately recognize that we do have a narrow window.
We have no time to lose. And so we need to create a chat group among the presidents, and have them make decisions quickly, you know, via their cell phones.
This is how things get done nowadays in the corporate world, and big firms, and other initiatives. And this is how we have to move; we have to move forward quickly.
It is a bit frustrating, that the speed at which the bureaucracies are moving does not match the historic moment that we have in Latin America with, you know, basically all of the major economies, all of the major countries having progressive governments.
I mean, this is not an opportunity to waste.
Then, of course, once we get this done, once we get this operation going, we have to empower our citizens. We have to empower our domestic productive sectors, our small and medium enterprises, our cooperatives, our associations of producers, so that they can get the most out of these new mechanisms.
They can trade amongst themselves. We have to build networks. We have to set the infrastructure in motion quickly, so that the new opportunities for trade among our countries can be concrete, tangible, and effective.
And that is a challenge for us.
I wish we could build, you know, as quickly as the Chinese are building new rail infrastructure, for example. And that’s something that we need in South America. And that can be done as well, also quite quickly, and have profound, transformational impact within the region.
Then there are other things that are even more powerful that can be done extremely quickly, and that are very important to keep the motion and the momentum for regional integration going, which is, for example, setting up a scholarship fund, a small scholarship fund, but for what we call educational exchange between high schools and also universities of the countries in the region, so that you can do a semester or a year abroad.
And when a student leaves to another country, for example, goes from Peru to Paraguay, and then the empty spot left in Peru can be filled by a person from Bolivia, or from Ecuador.
Then you have basically a clearing system of educational exchange that does not need to cost more money for our governments.
So with very little money, basically paying for tickets, you could get this energy of regional integration going, especially among the youth, which in a young continent like Latin America is the engine for the present and the future.
BEN NORTON: Yeah, I should mention to people that Andrés was a leading presidential candidate in 2021. He won the first round of the election, and came close to winning the second. And it’s very refreshing to hear all of these very creative ideas from someone who could potentially be president someday.
Andrés, you talked about the importance of speed in this moment. I do have to say that Lula made a comment in his meeting with Alberto Fernández that gave me a little concern, when he said that “there are going to be many debates and many meetings” in the plan to create this. And it does make me a little worried that that they might not be expediting the process very rapidly.
But what I will say is Lula made another very interesting comment that I wanted to ask you about. When a journalist posed this question about the currency, Lula mentioned that the BRICS system is also working on creating an international reserve currency.
And from what we’ve seen thus far, it’s going to potentially be based on a basket of currencies of the five members, Brazil, Russia, India, China, and South Africa, using their currencies. And potentially also there may be the use of commodities like oil.
So I’m curious, now that the BRICS is developing its own international financial architecture, a potential reserve currency, and Argentina has applied to join the BRICS. China invited Argentina to virtually attend the two meetings of the BRICS last year. And Iran, Algeria, Egypt has expressed interest, and Indonesia.
I’m curious if you think that, now that we’re seeing another international financial architecture being created through the BRICS system, if in Latin America the financial architecture could potentially be connected, if you could collaborate, and potentially if you can even see a country like Ecuador collaborating with BRICS or potentially joining BRICS.
ANDRÉS ARAUZ: I think it would be, of course, interesting to have Ecuador join BRICS. I think that’s a very distant possibility, for different reasons.
Right now [President] Lasso is completely a right-wing ideological monster, and is not even interested in anything counter-hegemonic, and doesn’t even believe in regional integration. And of course, challenging the unipolar system is out of question, in the case of Lasso.
But also Ecuador is a fairly small country, although its human talent I think outweighs its natural size.
But I think right now what is key is to have the five BRICS countries, the core members, actually get something done. You know, the New Development Bank halted some of its operations in the pandemic.
Then more recently as well, I think Lula nailed it, correctly, when he proposed that Dilma Rousseff go to China to lead the BRICS bank, called the New Development Bank.
Hopefully it can do so without following the same sort of IMF, World Bank type logic, or the same credit rating agency type logic, and to create new markets, new ways of interacting with the Global South.
I think that the common unit of account is definitely something that can be done, again, quickly. We have the experience of setting up in South America this system for unitary compensation in the region, the Sucre. And there are other examples as well. This should not be a challenge.
Hopefully, what’s important there is to find a clearing and settlement bank that can allow for these transactions to take place, and that is not afraid of sanctions from the United States.
We need that type of bank that can really serve the Global South, the interests of the Global South, and that can help nations that are in desperate need, in this 2023, where we’re going to have a massive debt crisis in the Global South, particularly many Latin American and African countries.
Hopefully the BRICS bank will be there to support the Global South with solidarity, and not just become one more creditor that, you know, wants to join the Paris Club or whatever. We need an alternative view. And I really hope that President Dilma will bring that vision to the BRICS bank.
BEN NORTON: Yeah, very well said. I think that is a very important decision, to appoint Dilma as the head of the New Development Bank.
You mentioned an important word, the s-word, sanctions, which I wanted to ask you about.
We’ve seen that in the past few decades, the application of unilateral sanctions by the United States has skyrocketed.
And of course, in the context of South America, we’ve seen that Venezuela is suffering under a brutal embargo imposed by the U.S., with many illegal unilateral sanctions.
The central bank reserves and the gold reserves in particular, of Venezuela were effectively stolen by the Bank of England.
That established a precedent that was then used by the U.S. to freeze the central bank reserves of Afghanistan, which has fueled a horrible crisis and hyperinflation, because they can’t stabilize their currency in Afghanistan.
Then, of course, Russia. After Russia invaded Ukraine, the U.S. and the EU froze $300 billion U.S. dollars worth of the central bank reserves, the foreign exchange reserves of Russia.
So clearly that has established a precedent that has frightened countries around the world. And it makes sense why countries are trying to find new reserve currencies and new payment mechanisms.
The prominent Credit Suisse economist Zoltan Pozsar has been talking a lot about this concept of Bretton Woods III.
He argues that we’re entering this new kind of monetary era where Bretton Woods I, from 1944, in the Bretton Woods conference, until 1971 or ‘73, when the US dollar was delinked from gold, was Bretton Woods I, and then we’ve been living through Bretton Woods II. But he argues that now we’re moving into a kind of Bretton Woods III.
I’m wondering if you agree with that argument, and what role you see Latin America playing in kind of forging this path.
I always shout at the top of my lungs, you know, people talk about Eurasian integration, but I think Latin American integration is just as important in challenging this financial hegemony and building a truly multipolar system.
And I’m curious if you think that we are in this Bretton Woods III world, and what role Latin America plays in that.
ANDRÉS ARAUZ: Yeah, definitely, we are in this Bretton Woods III world. This is obvious, not in question.
We’ve seen tectonic shifts in the functioning of the international monetary system. Some are not detected until after a while.
But those who follow this, you know, those who follow this closely, I think we are in the capacity to say that, yeah, we’re living this Bretton Woods III moment. There are many, many conversations happening right now.
I think right now we’re still in a moment of what Ilene Grabel calls “productive incoherence”, in the sense that there are a million ideas, you have BRICS, you have the different regions, you have Latin America, you have the SDRs, you have the crypto movement, I mean, all these different alternatives and ideas.
And for now, it’s okay that it’s sort of chaotic and there are many different initiatives, but this has to find a reasonable path forward, which goes along with regional integration mechanisms, and the connection among regional integration mechanisms.
So you have a sort of Eurasian hub, a pan-African hub, a Latin American hub, and then you have connections among those regions. And the society of the 21st century has to be a society of blocs, of large geopolitical blocs that can effectively allow for a sort of planetary governance, in more balanced terms, but also have common positions, but then within those blocs you can have quite a bit of diversity.
So I think that’s how it will end up working also in the monetary sphere. And we need these sort of communicating chambers or layers, and that would be the suprabloc or the supranational mechanisms, you know, like the BRICS bank, but also the SDRs at the International Monetary Fund and other such initiatives.
So we’re definitely living this moment of creativity. And I think it’s important to get these things rolling, so we have to go from talking about them to actually setting them in motion, and then testing which initiatives are most successful.
Now, all of this has to be done in the context of geopolitical confrontation and the weaponization of the incumbent financial system, which is the dollar-based, US financial system-based, correspondent banking and sort of FATF-governed, US hegemonic financial system.
And that is really both a cause for the major change, but also it stifles that change, because the smaller countries, but also maybe banks that do not want to lose their incumbent position, are afraid of taking on this role of an alternative system, because the US institutions, the OFAC, the Treasury, FinCEN, and their position in international multilateral organizations have really weaponized the system against any sort of this creativity.
So it will take a lot of courage, but also a lot of coordination, so that things can be done in a unified way, opposing hegemony, but in a coordinated way, so that not each individual country suffers the weight of the sanctions, but that we can do it in such a coordinated way that, you know, we can all go forward without fear of retaliation from these institutions. So that’s a realpolitik kind of thing.
Coming from a small country like Ecuador, it would be impossible for us, Ecuador by itself, to try to promote something that big. So we have to trust the big players to take the first steps, and to make some long-lasting change.
And just because you mentioned sanctions, I want to add another element, which is not only the gold that was taken from Venezuela, and the asset freeze and so on, but there was a particular type of sanction that has not been well described in the media, which is the IMF, the International Monetary Fund, which is a multilateral organization, but because the US has a veto and outsized influence in the governance of the fund, decided not to recognize the Venezuelan government.
So neither the Maduro official government, nor the fake Guaidó “government”, they said, “We have uncertainty as to whom we should recognize as the official government”.
And they blocked Venezuela’s accounts at the IMF, and in de facto avoided, or it was an obstacle for Venezuela accessing its $5 billion dollars worth of recently issued SDRs in 2021, which at the moment of the pandemic, and given the economic hardship that Venezuela was going through, would have been extremely useful for fighting the economic consequences of the pandemic, and acquiring vital health and medical equipment for the population.
So this is a new type of sanction, which is not explained anywhere; it’s very difficult to pin down.
But up to this moment, even two months after Guaidó has been sort of removed from power, and there is no question as to the legitimacy of President Maduro of Venezuela, the IMF has still not recognized the Venezuelan central bank, and has still blocked the passwords to Venezuela’s account at the IMF, where there is over $5 billion worth of SDRs, which are bigger than what’s in the UK with the gold, bigger than other asset seizures that Venezuela has gone through.
BEN NORTON: Yeah, this is actually a perfect segue. I wanted to ask you about special drawing rights, SDRs.
You’ve been a big advocate internationally for expanding the use of SDRs. And in many ways, this is kind of an example of the Keynesian concept of the Bancor in practice.
The problem, of course, with the SDRs — you can explain what they are — is that they are overseen by the IMF. And we know that the IMF is a deeply politicized institution, in which only the U.S. has veto power.
Of course anyone who knows the basic history of the IMF knows it has a long history of trapping countries in the Global South in debt, and then forcing them to impose neoliberal “structural adjustment” programs, cutting the minimum wage, privatizing state assets, etc.
The IMF itself, its top economists, admitted in a report called “Neoliberalism: Oversold?” that those policies led to a decline in growth, led to increasing inequality, and unemployment, and such.
But we’re in this complicated situation, where the SDRs do propose an interesting opportunity for the Global South.
But as you mentioned, during the pandemic, Venezuela applied for an IMF loan, but also Iran, where no one contests who the real Iranian government is. The US used its veto power to block the request that Iran made for a $5 billion loan from the IMF, during the pandemic, that could have saved lives.
So I’ve always been struck by this contradiction. I think you’re absolutely right, that SDRs are an important opportunity for the South. But how do we square the circle of that contradiction, where it’s also with such a thoroughly flawed institution?
You yourself have been a leading critic of the IMF. I’m just curious what you think about the contradiction there, of the importance of SDRs, but the problem of the IMF.
ANDRÉS ARAUZ: So we don’t have to compare the SDRs to perfection, because perfection doesn’t exist, and is not around. So we have to compare SDRs to other existing mechanisms.
And other existing mechanisms that we have right now in the system are the hegemonic, neo-colonial swap arrangement from the Federal Reserve, where the United States grants literally an unlimited dollar account to five other central banks: the European Central Bank, the Bank of England, the Bank of Japan, the Bank of Canada, and the Swiss National Bank.
So these six, the six central banks, the US Fed plus these five others, have literally unlimited dollar accounts at the Fed. Now that is definitely an advantage that these partners of the US have, but Global South countries don’t.
What do Global South countries have? Well, they don’t have these unlimited dollar accounts, so what they can do is, you know, try to knock on some doors and maybe get a loan from somebody.
And you know what those loans mean? They mean conditionality; they mean austerity; they mean firing people; they mean privatizing state assets; they mean deregulating the financial system, and so on, and creating crisis.
So those aren’t really a true alternative for people that are actually concerned with the human rights and the well-being of people in the Global South.
So the next best thing that we have are the SDRs, that, yes, have to follow the conventional voting structure at the IMF; they require US consent. But once that happens, they are distributed fairly equitably to every country in the world.
They are skewed towards richer countries, but the richer countries are not making any use of them anyway. So what you really have to count is how much arrives to the Global South countries.
I’ve done several studies to show that it’s the Global South countries that are the ones taking advantage of the SDRs, and that we need more.
We need more of these SDRs for several reasons, more specifically because they benefit the fiscal budget, the budget of these countries, that allows them to invest in their economies, and save lives, and help people very concretely. But also because it creates an alternative to the hegemonic system.
So I think, in that sense, SDRs are a very powerful instrument. Again, they are not perfect. I hope one day we can reform the IMF governance and so on.
But in the meantime, SDRs are a viable alternative that can happen.
And as happened during my [presidential] campaign in 2021, when I said that I would help the people in the pandemic by giving $1,000 to each of the 1 million families that were in the most vulnerable condition in my country, they said, “Where is that money going to come from?” I said, “Well, from the SDRs. It’s issued out of thin air”.
And the people that didn’t know how money works sort of made fun of that, because they don’t know how it works. But SDRs are issued out of thin air; they are politically created.
You know, the countries literally meet, in this case by email, and they vote on creating new money, new money that is a hard currency that can be issued to every country in the world that’s an IMF member country, and then that can be swapped or traded for dollars, euros, yuan, yen, or the British pound.
And they can be used for countries’ day-to-day operations and purchases in the international market. So it’s a concrete benefit to Global South countries.
Yeah, we have to overcome the governance dynamics of the IMF. But in the meantime, it’s the most concrete, most tangible, most equitable, debt-free solution for getting liquidity, getting money to the poorest countries in the world.
BEN NORTON: Yeah, very well said. I have one final economics question, and then we can conclude talking about the politics in Ecuador briefly.
You’ve also been a promoter of central bank digital currencies. I’m wondering if you can talk about this. This has become a very hot topic in the financial press.
And something that’s also related, we saw that Argentina and China just signed a currency swap line agreement. And the Chinese media discussed this as a way of encouraging bilateral trade between Argentina and China using their domestic currencies.
But also it’s clearly a way to provide liquidity for Argentina, which is facing this inflation crisis, so Argentina can service its dollar-denominated debt, while also having these Chinese yuan.
I’m curious if you think that currency swaps — we’ve seen China, the Chinese central bank, has really expanded its use of currency swap lines with countries that are suffering with dollar-denominated debt, like Pakistan, Sri Lanka, Argentina — I’m curious what you think about that in the future.
People have argued that this is basically a way of providing loans that get around the SWIFT system and around sanctions.
So these are both examples, central bank digital currencies and currency swap lines, of ways for central banks to kind of oversee alternative payment mechanisms or alternative loan mechanisms.
What do you think about both of those?
ANDRÉS ARAUZ: Well, swap lines are loans, they are mutual loans between central banks. So one central bank lends some of its own currency to another country and gets a loan in return.
Usually it’s a country with a harder currency that is actually the one that’s lending the currency to another country with the weaker currency. And usually there’s an asymmetry; there’s a difference in the sort of relative hierarchy of currencies between the countries that are engaged in swap arrangements.
I think they are a valid alternative. Again, this is part of this “productive incoherence”, part of these, you know, many, many initiatives that have sprawled, especially after the great financial crisis of 2008, where, you know, countries started to be creative about how we can get our hands on liquidity without having to return to the IMF and to get a loan and, you know, go through this whole conditionality stuff.
So many, many of these initiatives have sprawled. You also have the Arab countries developing swap networks, also the Arab Monetary Fund, and so on.
We have a Latin American Reserve Fund. We wanted to have a Fund of the South in our region; unfortunately, that did not go through.
But again, there are many other initiatives, and I think swap lines are an important one as well.
Now, central bank digital currencies are a bit different. They are mostly designed for domestic payment purposes, basically people, and businesses, but also directly human beings, can have a type of account or a wallet at the central bank.
That has many other implications, you know, implications as to how that will compete with a conventional banking system, with cash, and so on. And I think we can have basically two main ideas here.
One, I think that any successful CBDC — because we were the first country in the world, Ecuador, to do a pilot, to actually launch and have a CBDC fully operational — is that it has to be mindful of true financial inclusion.
So you don’t really have to target the people who already have a conventional banking account. You want to try to reach the people that do not have financial services, that may have a phone, may have you know, a data connection, or not even, just ap hone connection. But it is that sector that you want to reach.
Then the other one it is that you have to keep in mind that you are legal tender. If you want to have a CBDC, it has to be as good as legal tender.
Legal tender, the physical currency, has some protections for the consumer, with regard to the anonymity, privacy, and non-traceability of its use.
So legal tender is not just the thing that forces businesses to accept your currency. It is also a thing that protects the user of cash by granting them the possibility of deciding to do with their money whatever they need to do with it, without, you know, supervision by anybody else, much less so a bank.
So the digital currency, central bank digital currency, to be successful, has to replicate those characteristics that are present in physical cash in the digital version.
I think most central banks have not understood this. They are trying to, you know, basically create accounts in the conventional sense.
And they’re really excited about the surveillance possibilities that now they will have over society, by controlling every single transaction that they make, and so on.
They’re not getting the point that adoption will only be there if they replicate the characteristics of physical cash.
BEN NORTON: Yeah, very well said, again. It’s extremely refreshing hearing a prominent politician who could one day be a president discussing such innovative ideas.
This leads me to my last question or two here, as we wrap up. And that’s the discussion of the politics in your home country, in Ecuador.
I mentioned at the beginning that Andrés was the former central bank manager in Ecuador. He also was minister of knowledge and human talent.
But in 2021 he was a presidential candidate. Andrés won the first round and came close to winning the second. He lost by several points to the current right-wing millionaire banker president, Guillermo Lasso.
But in regional elections that were just held, the leftist Correísta movement did very well, winning more than any other party.
¡Gracias Ecuador!¡Qué respuesta a seis años de infamias, persecución y destrucción!¡De aquí pa’ arriba, hasta recuperar la Patria!#LosCorruptosSiempreFueronEllos pic.twitter.com/qeyzk39aO1
— Rafael Correa (@MashiRafael) February 11, 2023

Here is former President Rafael Correa, thanking his country, and you can see the results of the Citizens’ Revolution movement that was founded by Correa, got 61 mayor’s seats and nine governorships, basically is the equivalent. That’s more than any other party. And especially in the big cities of Quito and Guayaquil.
But also something that was very important is that the president, Guillermo Lasso, had been trying to propose a referendum to change the constitution, and we know that he lost every single measure. He had eight different proposals to change the constitution.
The leftist opposition just had a huge victory in Ecuador:
The Correísta movement dominated local elections across the country
And right-wing millionaire banker President Guillermo Lasso held a referendum to try to add 8 changes to the constitution, but he lost every single one pic.twitter.com/r5HAZULBbm
— Ben Norton (@BenjaminNorton) February 7, 2023

And in response to that, there were reports that Lasso actually was calling the leaders of the electoral council and yelling at them, and threatening the members of the electoral council.
This has led to people, including people who previously supported Lasso, to suggest that that would be an impeachable offense in Ecuador.
So Andrés, can you reflect on this historic victory of the Correísta Citizens’ Revolution movement that you are a leader in, in these historic elections, and the failure of Lasso in this constitutional referendum?
What does this mean for Ecuador?
ANDRÉS ARAUZ: This is great news for our country. It was a historic victory after years of political persecution.
My campaign was extremely difficult in its conditions. We had all the referees against us. I had to run a campaign where I was constantly under death threats and threats of imprisonment.
The incumbent government was a traitor, and had already put many of my comrades in prison and so on.
So it was under very difficult conditions, and we lost by a very slim margin in the second round.
But in this case, we have one main lesson that unfortunately was learned by the population the hard way, which is that, in the last campaign, we did suffer a bit of punishment from the electorate, because we had previously supported Lenín Moreno.
And they said, “Well, yeah, whatever, “I don’t care that he’s a traitor; he’s part of your camp; “and we’re going to punish you for having selected him in the past”.
But now that Lasso has been in power for almost two years, and has governed exactly the same way, with the same policies as Lenín Moreno, people have understood that it was really a massive act of betrayal, and that it was the right wing that was governing all this time, especially after Lasso decided not to investigate Moreno or to try to or to try to get him into any serious trouble.
So people have noticed that it has been Lasso and the right wing that has been actually governing all these last five, six years.
So that has been the key difference in the structure of the vote. And of course, we have sort of amended our relationship with the people and that gave us a huge victory in these last elections.
We won all major cities, all of the major prefectures, and our demographic weight has gone up tremendously. And of course, that gives us a lot of possibilities for a subsequent presidential campaign in the future.
Now, in the case of Lasso, his defeat was complete not only because the Citizens’ Revolution won some of these key races, but because he lost the referendum in each of the eight proposals he made. And that was a resounding victory of the people.
The margin of that victory was much larger than the people who voted for us. So that means that there is a critical majority that is not just voting for the Citizens’ Revolution, but for a larger anti-right-wing type coalition.
That is our challenge now, how we can build a relationship within that coalition of not just coexistence, but also amending those the links, so we can go together and have a resounding victory in the next electoral cycle.
Now, for Lasso, this has been total collapse. He has basically no support within the parliament, no support no support with the people, electoral defeats, all his most trusted elements have quit.
And now he has to basically survive, and probably he won’t make it in the next few days or weeks.
So we’ll probably have some news coming from Ecuador fairly quickly.
BEN NORTON: Yeah, that would be incredible. That’s the positive news.
I want to conclude, unfortunately, on I guess a more tragic note, which is the social cost of the Lasso government. We saw that under President Rafael Correa and the Citizens’ Revolution, there was a massive decrease in violence and organized crime in Ecuador.
The violent death rate in Ecuador over time, by president
This is a graph showing the death rate, violent death rate in Ecuador. When Correa came in, it just plummeted, the death rate in Ecuador.
Ever since the return to the right, by Lenín Moreno and now Lasso, we’ve seen a massive increase in violence.
And there have been so many horrible reports that I’ve seen, of reports of mass killings in prisons and drug violence.
In fact, before the elections, there was a prominent Correísta leftist candidate who was assassinated.
So I’m wondering if you can reflect on the social cost of the Lasso government thus far, and why you think that there has been such a massive increase in violence and drug trafficking in Ecuador under Lasso.
ANDRÉS ARAUZ: Unfortunately, this violence that we’ve seen in Ecuador is, and it really saddens me to say this, but it’s part of a plan.
It’s part of Lasso’s plan to weaken the social organization capacity, to instill fear in the population, and to demobilize people and to remove hope from them.
We have seen, in parallel to this violence, we have seen the largest migration wave out of Ecuador, that’s comparable to the large migration waves that we’ve seen from other countries, but without an embargo, a blockade, or financial or economic sanctions against it.
This is basically the collapse of Ecuadorian society, from the fact that Lasso’s policies have decided to destroy our domestic economy, the relationship between the productive sectors and society and so on.
And unfortunately, it seems that has been part of a plan to create this sort of fear, this element of fear in society for him to implement his neoliberal policies in a much easier way or a much easier fashion.
So now, the evidence that points to this is the fact that the minister of security for over a year was Alexandra Vela, who has said continuously that she’s not an expert in security; that is not her forte; that is not what she’s good at.
She was still kept at the Ministry of Security for a long time, only to be replaced by Diego Ordóñez, who is this other guy who has no experience whatsoever in matters of security, his only expertise is sort of a libertarian political persecution against the left in Latin America.
That’s all that he has. He has no expertise in security matters whatsoever. So these are the people that are running our security forces. These are the bosses of the police and the armed forces in Ecuador.
And of course, that can only make sense if the plan was to not do anything about the violence.
Now, the good news is that as soon as a progressive government takes power in Ecuador, the progressive government will have a lot of legitimacy. It will have a lot of trust from the people.
And as we have demonstrated in the past, with the leadership of Rafael Correa, there will be immediate action, because we know how to get things done. We’ve done that in the past.
We reduced, like you showed, the homicide rate in a very short amount of time. So we know how to do that, by managing the local police force, by being very meticulous about studying the causes of crime, the geography of crime, and so on.
So the good news for the people of Ecuador is that as soon as we have a progressive government in place, those indicators will improve tremendously, quickly, and with immediate benefits for the families of the Ecuadorian citizens.
BEN NORTON: Very well said. I guess, just to not end on a super dark note, I will ask one final question. And I know you’re a busy man, then I’ll let you go.
There has been a lot of discussion of the return of the so-called “Pink Tide”. I know, in my experience in the region, people don’t really use the term “Pink Tide”, but a progressive wave, a left-wing wave of governments across the region.
In fact, for the first time in modern history, the six most populous governments in the region were left wing, until the coup in Peru in December.
But, I mean, we see for the first time ever a left-wing government in Colombia. We see for the first time in many decades a left-wing government in Mexico. And of course, Lula has now returned in Brazil.
Unfortunately, the only holdouts, the right-wing holdouts, are Ecuador and Uruguay. And I guess you could say Guatemala. And well, El Salvador is complicated.
But the point is that Ecuador is, I think, probably next in line for the left wing to come back.
The last question that we can end on is, what do you see in the short to the medium term, maybe even the long term, for the future of Latin America?
And especially with the left being able to govern, do you think that you’ll be able to continue the process of regional integration and turn Latin America and the Caribbean into, I would say, a pole in a multipolar world?
I increasingly think that might be the case. But I’m curious what your final thoughts are.
ANDRÉS ARAUZ: Yeah, we need to we need to have some key conversations in the region among the largest players, you know, I’m talking about Lula, talking about AMLO, talking about Fernández, Petro.
I think if we could get these four presidents together on the table, to have off-the-record conversations, maybe sit down for an entire day and have them come up with some key ideas. It’s very important.
We need that kind of conversation right now. This cannot just be, you know, some random ideas floating around and then making some headlines in the papers, but then not being implemented in reality.
We need to have a true political consensus among the progressive governments, serious conversation, to overcome issues about egos, and vanity, and stuff like that.
And we need to understand that this is a historic moment for humanity, and that the Latin American people have a duty to the continent, of course, but also to the rest of the world.
We have to show that there is an alternative, and we are in the conditions to prove that. So we really need to make that happen.
Then, after the conversation of the presidents, we need to go beyond the political integration of political parties, or chiefs of states, or, whatever, the summit pictures.
We need to have an integration of the peoples. This is important, Ben, and I mentioned this already, but I want to say it again, we need to make regional integration tangible for the people, the everyday citizen.
We need to make this concrete. We need to make this, you know, felt in their bodies, in their minds, in their day to day. And this is done with the educational exchange program.
We need a cultural program, where we have small kids in elementary schools discussing, what should the flag of Latin America be like? What should the anthem be like? With the music, musicians, poets of each of our countries.
We need to discuss, you know, how the coat of arms should be? What kinds of symbols do we want to adopt as a Latin American civilization?
These are the discussions that will make so many other things happen, especially if we start with the younger kids in our generation.
We also need to have this infrastructure immediately.
You know, we have almost $1 trillion in reserves being deposited in Swiss and US bank accounts, if you add up South American, and Mexico’s, and Central American reserves. We have that money deposited in the Global North, but we should invest at least a tenth of that in our own region, in concrete, tangible assets, in roads, in electric interconnection system, in a rail network to connect the big cities of Latin America amongst ourselves.
And we need to make that happen quickly. Otherwise we’ll lose this opportunity.
So my call is to have a little wake-up call, and get our regional movements going, and pressure the governments to go forward much faster in terms of regional integration.
Not every country can save itself. We cannot be facing this geopolitical moment, basically a world war, as 33 independent, small republics; this has to be faced as a Latin American bloc. And the political conditions are there.
I just hope that we can get the structures, the instruments, in place for the regional bloc to actually assert itself and start projecting and acting in real life.
BEN NORTON: Wow, those are powerful words to end on. I must say that I hope that today I was speaking with the next president of Ecuador. I think the president of any country that could implement those kinds of ideas, or at least try to implement those ideas, I think would be such a positive force for the entire world. Andrés Arauz was the central bank director in Ecuador, and under former President Correa, he was also minister of knowledge and human talent.
He is finishing up, I believe you’re finishing up your PhD in economics, right?
And everyone should check out Andrés Arauz over at his Twitter account. You can follow him at @EcuArauz. And I know that, Andrés, you’re also a fellow at the Center for Economic and Policy Research, CEPR, in Washington, DC, which I often joke is the only good think tank in Washington. They do a lot of very important work over there.
Is there anything else that you would like to plug at the end here, where people could find your work or follow what you do?
ANDRÉS ARAUZ: Yeah, I’m just waiting for the slow university bureaucracy to print my little diploma, and I’ll be ready with that. But yeah, I finished my degree in mid last year, and I’m happy to have that done.
So, yeah, thanks again, Ben, for everything. Thanks for this interview. I hope we’ve clarified some of these issues for a wide audience.
BEN NORTON: You absolutely did, and I hope you inspire people to do more research into these very fascinating topics.
I think we’re living in a deeply important, watershed moment in history. And I do think Latin America plays a key role in that, especially with brilliant political leaders and economists like you and others.
So thanks so much for being generous with your time today.
ANDRÉS ARAUZ: Thank you, Ben. Bye bye.


Instruction: Write an article about: Colombia’s President Petro supports freedom for Julian Assange, meets with WikiLeaks editors. Use the themes and topics represented by the tags provided as guidance for the content. It's not necessary to include the exact tag words in the article, but the article should reflect the essence and context of these tags.

Input: Colombia, Gustavo Petro, Julian Assange, WikiLeaks

Output:
Colombia’s first-ever left-wing President Gustavo Petro met with WikiLeaks editors and said he “supports the worldwide struggle for the freedom of the journalist Julian Assange.” He pledged to pressure Joe Biden to drop the charges.

The editors of the whistle-blowing journalism publication WikiLeaks met with Colombia’s new left-wing President Gustavo Petro on November 22.
Petro stated that he “supports the worldwide struggle for the freedom of the journalist Julian Assange,” the Australian founder of WikiLeaks, who has been incarcerated in a maximum-security British prison since 2019, awaiting extradition to the United States.
“I will ask President Biden with other Latin American presidents so they don’t put charges on a journalist only for saying the truth,” vowed Petro, Colombia’s first-ever leftist head of state.
Me reuní con los voceros de Wikikeaks, para apoyar la lucha mundial por la libertad del periodista Julian Assange.
Le soliciaré al presidente Biden con otros presidentes latinoamericanos que no se pongan cargos a un periodista solo por decir la verdad pic.twitter.com/kWyoXrHhyV
— Gustavo Petro (@petrogustavo) November 22, 2022

Petro was joined in the meeting in the Casa de Nariño presidential office in Bogotá by WikiLeaks editor-in-chief Kristinn Hrafnsson, WikiLeaks ambassador Joseph A. Farrell, and Colombia’s Foreign Minister Álvaro Leyva Durán.
Hrafnsson tweeted that it was a “good meeting,” adding that both Petro and Leyva “confirmed their support for urging the US Biden admin to drop the charges against #Assange recognising the grave threat against press freedom if he is extradited.”
Good meeting today with Colombian president Gustavo Petro and his FM Alvaro Durán. Both confirmed their support for urging the US Biden admin to drop the charges against #Assange recognising the grave threat against press freedom if he is extradited. @petrogustavo pic.twitter.com/hsMt2n3eCO
— Kristinn Hrafnsson (@khrafnsson) November 21, 2022

Assange faces up to 175 years in prison in the United States, on politically motivated charges.
When Assange was trapped in Ecuador’s embassy in London, the CIA spied on him 24/7. Journalist and lawyers targeted in this operation have sued the CIA.
The top United Nations expert on torture, Special Rapporteur Nils Melzer, visited Assange in the UK’s notorious Belmarsh prison in 2019, and reported that he is suffering from torture and horrific health conditions that could threaten his life.
“While the US Government prosecutes Mr. Assange for publishing information about serious human rights violations, including torture and murder, the officials responsible for these crimes continue to enjoy impunity,” Melzer said.
The UN expert said Assange suffers from “all the symptoms typical for prolonged exposure to psychological torture.”
“However, what we have seen from the UK Government is outright contempt for Mr. Assange’s rights and integrity,” Melzer lamented. “Despite the medical urgency of my appeal, and the seriousness of the alleged violations, the UK has not undertaken any measures of investigation, prevention and redress required under international law.”
In calling for freeing Assange, Petro has joined numerous other leftist leaders in Latin America, including Mexico’s President Andrés Manuel López Obrador (AMLO), Venezuela’s President Nicolás Maduro, and Nicaragua’s President Daniel Ortega. All have praised the WikiLeaks journalist for exposing US war crimes.


Instruction: Write an article about: Latin American socialists unite with Iran-led Axis of Resistance against Western imperialism. Use the themes and topics represented by the tags provided as guidance for the content. It's not necessary to include the exact tag words in the article, but the article should reflect the essence and context of these tags.

Input: ALBA, Bolivarian Alliance, Daniel Ortega, Denis Moncada, Ebrahim Raisi, Gaza, Group of Friends in Defense of the Charter of the United Nations, Hugo Chávez, Iran, Libya, Mahmoud Ahmadinejad, Megasis, Nicaragua, Palestine, Sacha Llorenti, Syria, Venezuela

Output:
The leftist governments of Venezuela, Cuba, Nicaragua, and Bolivia have found a key strategic ally in Iran, the heart of the Axis of Resistance.

(This article was written for Al Mayadeen English.)
Revolutionary socialist movements in Latin America are developing closer relations with anti-imperialist resistance forces in West Asia, building a united front against Western aggression and exploitation.
This budding alliance is an extremely important development in the struggle against an authoritarian international political and economic system that is essentially a global dictatorship, ruled by the United States and its junior imperialist partners in the European Union, NATO, apartheid “Israel”, and the Gulf monarchies.
As this Washington-led, trans-Atlantic hegemonic order was constructed over the past century, through a long series of wars, military occupations, foreign interventions, coups, regime-change operations, assassinations, and grossly unequal trade arrangements, two regions of the world have been especially targeted: Latin America and the Middle East, or more accurately West Asia.
Both regions have plentiful natural resources and are very geostrategically located. Latin America has vast mineral reserves and agricultural products. West Asia has a plurality of the planet’s hydrocarbon reserves, and connects Europe to Asia, sitting right in the middle of what geopolitical analysts have long called the “World Island.”
Given their status as principal targets of Western imperialism, it only makes sense for resistance forces in these regions to unite. Attempts at forming such an alliance had been made in the past — revolutionary Palestinian militants trained in Cuba and with Nicaragua’s Sandinistas, for instance, and Muammar al-Qaddafi’s Libya supported leftist Latin American guerrillas — but this collaboration was historically limited in scope.
That is, until recently. As the United States accelerated its hybrid warfare to try to re-colonize Latin America and West Asia in the 2000s, indigenous anti-imperialist movements in both regions joined forces, forging not only close political ties, but economic relations as well.
The leftist governments of Venezuela, Cuba, Nicaragua, and Bolivia have found a key strategic ally in Iran, the heart of the Axis of Resistance.
The director of the main instrument of Latin American economic integration, the Bolivarian Alliance for the Peoples of Our America, known simply as the ALBA, took a historic trip to Tehran this August to meet with the new Iranian President Ebrahim Raisi.
“Iran and the ALBA have a lot in common, and both seek to defend the independence and sovereignty of nations and confront the outrageousness of the United States,” remarked the ALBA’s executive secretary, the Bolivian diplomat Sacha Llorenti.
Tuve el privilegio y el honor de sostener una reunión con S. E. Seyed Ebrahim Raisi, Presidente de la República Islámica de Irán. Extendimos las felicitaciones del  @ALBATCP por su posesión, conversamos sobre nuestras coincidencias y la agenda en común. pic.twitter.com/atFubJwErM
— Sacha Llorenti (@SachaLlorenti) August 4, 2021

For his part, Raisi kicked off his new administration calling for strengthening relations with Latin America, stressing that it is one of Tehran’s top foreign-policy priorities.
“Iran is determined to develop its political and economic relations with the member states of the ALBA-TCP,” Raisi said, highlighting “the shared values and positions of both parties.”
“There is no doubt that a greater development of the relations between Iran and Latin American countries can halt the North Americans and other arrogant countries,” Raisi added.
Joining Llorenti in Tehran were top officials from Venezuela, Nicaragua, and Bolivia — all member states of the ALBA.
In a meeting with Venezuela’s vice president of planning, Ricardo Menéndez, Raisi stated that “ Iran and Venezuela alike have common interests and enemies. We have always shown that with resistance and wisdom, we can thwart the plots of the United States and world imperialism.”
#MásTemprano || VP Planificación de la República Bolivariana de Venezuela, @rmenendezp sostuvo un encuentro con el Pdte de la República Islámica de Irán, Ebrahim Raisi, en el Palacio Blanco, con la finalidad de estrechar las relaciones entre ambas naciones.#LaClaveEsVacunarse pic.twitter.com/dYbItJBGW6
— MinPlanificación (@MPPPlanifica) August 4, 2021

Nicaragua’s Foreign Minister Denis Moncada met with Raisi as well, and called for strengthening relations with Tehran. The Iranian president praised the Central American nation’s Sandinista government as a model of resistance against US aggression, and said, “The people of Iran have always wished for success and victory for the revolutionary nation of Nicaragua.”
Likewise, in his meeting with Raisi, Bolivian Foreign Minister Rogelio Mayta pledged to work more closely with Iran, stating, “Despite sabotage by the United States, we are determined to increase the level of relations with Tehran in all areas.”
Iran’s support for revolutionary governments in Latin America goes beyond mere words. While many liberal and center-left political forces in the region have opportunistically turned their back on Venezuela, betraying their neighbor on behalf of Washington, Tehran has shown real, tangible support for Caracas.
Both Venezuela and Iran are suffering from illegal US blockades, and these murderous sanctions have led to a shortage of food, medicine, and gasoline. (Venezuela has massive oil reserves, but it is some of the heaviest crude petrol on the planet, which cannot be used or exported without first being refined, so Caracas needs to import lighter crude or other materials that are blocked by Washington.)
To help meet the needs of the Venezuelan people, Iran has repeatedly defied the criminal US blockade and delivered supplies to Caracas, sending huge tankers full of food, medicine, and fuel.
In these altruistic acts, Tehran has valiantly risked US military aggression, putting its money where its mouth is to support the revolutionary government and people of Venezuela.
Iran has also opened a supermarket chain in Venezuela, called Megasis, to help support an ally that is heavily reliant on food imports. It is part of a larger strategy to boost bilateral trade and economic cooperation between both nations.
The brotherhood between Venezuela and Iran was most poignantly illustrated at the 2013 funeral of President Hugo Chávez, who initiated the Bolivarian Revolution. Iranian President Mahmoud Ahmadinejad was photographed hugging and consoling the Venezuelan Comandante’s crying mother.
In the last 400 years the world powers have either slandered or  assassinated  the character of the champions of freedom, and independence. Chavez is alive until freedom, justice, and humanity is alive. God bless Him. pic.twitter.com/x08q2HH58K
— Mahmoud Ahmadinejad (@Ahmadinejad1956) March 8, 2020

Revolutionary Latin American governments have also sought to collaborate more closely with other forces in the West Asian Axis of Resistance.
Venezuela, Cuba, Nicaragua, and Bolivia vociferously opposed and condemned the US-led imperialist proxy wars against Libya and Syria, which expressly sought the collapse of the nations’ central governments, and succeeded in the former while failing in the latter.
Similarly, these ALBA member states have all shown unflinching solidarity with Palestine. In response to apartheid “Israel’s” 2008–2009 massacre in Gaza, Venezuelan President Chávez officially broke ties with the Zionist regime, denouncing it as a “genocidal state” and “the murderous arm of the US government.”
Then in 2010, in a daring challenge to Washington’s declaration that Iran, Iraq, and North Korea constituted a supposed “Axis of Evil,” Comandante Chávez announced an alliance with Syria, which he dubbed the “Axis of the Brave”.
The Axis of the Brave was a “strategic alliance” against US imperialism, Chávez explained. “A new world is being built,” and “we seek a strategic relationship with that continent,” the Venezuelan president said, referring to West Asia.
Less than a year after Chávez’s announcement, the United States and its proxies launched a devastating decade-long regime-change war on Syria — one that continues today, with more than one-third of Syria’s sovereign territory, seizing most of its oil and wheat reserves, illegally militarily occupied by the United States in the northeast and NATO member Turkey in the northwest.
Chávez’s defense of and alliance with Syria against Western aggression led to the inauguration this March of a monument at the University of Damascus.
#8M2021 #DiaInternacionalDeLaMujer Que mejor día que hoy para conmemorar, en la Universidad de Damasco #Siria, el 8vo aniversario de la siembra de ese gran feminista que fue nuestro Comandante Chávez. Siempre reivindicó el rol fundamental de la mujer en la sociedad. pic.twitter.com/slfIS2AyaY
— José Gregorio Biomorgi Muzattiz (@Jose_Biomorgi) March 8, 2021

Nicaraguan President Daniel Ortega, the leader of the revolutionary Sandinista Liberation Front, has likewise steadfastly defended Syria and “ condemned all forms of aggression by foreign powers that attack the sovereignty and self-determination of the [Syrian] people, in clear and flagrant violation of international law.”
During the 2011 NATO regime-change war that intentionally collapsed the state of Libya and unleashed open-air slave markets, Nicaragua’s Sandinista government staunchly opposed Western imperial aggression.
As NATO bombed Libya, the US government refused to give a visa to the North African nation’s United Nations delegate. So in response, Nicaragua’s former foreign minister, Miguel D’Escoto Brockmann, announced he would represent Libya at the UN. (Washington then tried to block D’Escoto’s representation too.)
Axis of Resistance forces in Yemen has returned the solidarity. The de facto government in northern Yemen, ruled by the revolutionary Houthi movement, known officially as Ansarallah, has staunchly defended Venezuela against US aggression.
In a 2015 interview, a senior Ansarallah member declared, “We support Chávez in Venezuela.” When Washington initiated another coup attempt in Venezuela in February 2019, Ansarallah and leftist parties in Yemen held a protest condemning US interference.
The Houthi movement that governs northern Yemen, known officially as Ansar Allah, joined leftist parties in expressing solidarity with Venezuela against a US coup attempt.
Demonstrations like these dispel misleading corporate media narratives about Yemenhttps://t.co/0KGgM2ZHcX
— The Grayzone (@TheGrayzoneNews) September 13, 2020

Latin American socialist governments and the Axis of Resistance in West Asia are the vanguards in the struggle to build a new, truly multipolar world based on national sovereignty and self-determination.
Together, they are helping to construct a truly multilateral order that challenges the authoritarian, unilateral, and brutally violent system created and controlled by the United States and its junior partners in imperialism.
This was further illustrated in July, when these nations launched an anti-imperialist alliance inside the United Nations, called the Group of Friends in Defense of the UN Charter. Venezuela, Cuba, Nicaragua, and Bolivia were joined by Iran, Syria, and Palestine, as well as the People’s Republic of China, the Russian Federation, Algeria, the DPRK, Cambodia, Laos, Angola, Belarus, Eritrea, Equatorial Guinea, and Saint Vincent and the Grenadines.
The anti-imperialist Group of Friends in Defense of the UN Charter launched yesterday, featuring:AlgeriaAngolaBelarusBoliviaCambodiaChinaCubaDPRKEqui. GuineaEritreaIranLaosNicaraguaPalestineRussiaSaint Vincent and GrenadinesSyriaVenezuelahttps://t.co/4vc9sbpOlR pic.twitter.com/ErFDIed7cW
— Benjamin Norton (@BenjaminNorton) July 7, 2021

The economic partnership between member states of the Bolivarian Alliance and Iran likewise serves as a model for South-South integration that not only weakens Western imperial hegemony, but also helps to develop these countries in their mutual interests.
The ALBA was itself created to remove the middleman of the United States, so that Latin American nations could trade with each other and strengthen their own domestic economies, cutting out the North American corporations that want them to be dependent on imports.
The historic, 25-year, $400 billion agreement Iran signed with China this March was another crucially important step in building alternative economic structures to weaken Washington’s dominance.
Similarly, the announcement that Cuba and Iran will work together to manufacture COVID-19 vaccines exemplifies how this South-South partnership can help overcome the global pandemic.
If Latin America and West Asia can create a coherent formal alliance with China and Russia, it could pose a serious challenge to the imperialist US-EU-NATO axis.
As the United States accelerates its new cold war on China and Russia, such a coalition will only become more urgent.
Originally published at Al Mayadeen English on August 17, 2021