By Ariel Cohen

Despite the raging economic crisis and collapse of oil prices, Russiacontinues to push its global diplomatic offensive, which has overt anti-American overtones. At the end of November, President Dmitry Medvedev paid a week-long visit to Latin America  The trip demonstratedRussia’s growing strategic reach and political clout in a region considered a U.S. sphere of influence. The question remains whether the deep economic recession and attempts of rapprochement with the incoming Obama Administration are likely to cool the Kremlin’s ardor for geopolitical gambling in 2009.

Moscow had planned Medvedev’s visit around the XVI Summit of the Asia-Pacific Economic Cooperation (APEC) Forum in Lima, Peru.

According to Kremlin officials, President Medvedev pursued exclusively an economic agenda.  The claim is bizarre considering that the economy is the purview of Prime Minister Vladimir Putin, while Medvedev is supposed to be in charge of Russia’s foreign and defense policy.

Geopolitical motives are clear, however.  To promote trade the president does not need to sell a nuclear reactor to technologically backwardVenezuela, nor pay personal visits to Hugo Chavez and the Castro brothers in Cuba.

Visits to Cuba and Venezuela, America’s key regional foes, vividly demonstrate Russia’s anti-American ambitions and its wish to revive the “special relationships” with these Latin American countries largely abandoned since the end of the Cold War. For Moscow and Caracas, this meeting was a chance to poke Uncle Sam in the eye.

Additionally, Medvedev has demonstrated Russia’s ability to act in theU.S. back yard--a response to the American support for Georgia in the August military confrontation. Beyond that, this was yet another step in return to the Soviet-style global power projection, albeit in a much smaller scale than in the twentieth century.

Joint Naval Maneuvers

Russia and Venezuela held joint naval exercises VenRus-2008 on December 1-2, following Medvedev’s November visit to Caracas. Dissatisfied with the presence of NATO warships off Georgia’s shores in August and September, Russia sent its own squadron to the Caribbeancoast of Venezuela.

For the maneuvers, Moscow dispatched the atomic missile cruiser Peter the Great, an anti-submarine destroyer Admiral Chabanenko and two support ships (a tanker and a rescue tug – just in case). Venezuelaprovided 12 warships, including three frigates and a tank landing ship, and a squadron of Su-30 fighter planes. The ships practiced joint tactical maneuvers, rescued a vessel in an emergency and refueled in the process.

Yet, the maneuvers give an impression of a power demonstration rather than naval training. Ret. Admiral Vladimir Komoedov, a former Russian Black Sea Fleet commander and member of the Russian State Duma, told Kommersant that using a heavy missile cruiser and an anti-submarine ship for inspection and rescue operations was a “senseless expense.”

In another symbolic move, the Russian destroyer Admiral Chabanenko crossed the Panama Canal, for the first time since the World War II.  The ship visited the Panama’s Balboa naval base (a former U.S. naval hub known as Rodman).

Russia’s naval maneuvers around the globe, such as the forthcoming January exercise with India, are illustrative of Moscow’s global ambitions. Yet, this may be an expensive pursuit. The raging economic crisis leavesRussia with limited funds for such global games.

Military and Energy Cooperation

As mentioned, Venezuelan Sukhoi fighter jets, purchased from Russia, participated in the exercise. Today, Caracas is the largest customer of the Russian weapons exports, replacing India and China. Since 2005, massive arms deals, exceeding $4.4 billion, have included radar equipment, Sukhoi-30 aircrafts, helicopters, tanks, up to 100,000 AK-47 rifles, and a factory to make more Kalashnikovs.

In addition to the military cooperation, Russia will help Venezuela build its first nuclear reactor. In technologically backward and energy abundantVenezuela, this project may be an unnecessary and dangerous undertaking. Caracas lacks expertise for a safe and viable nuclear program, and it has enough natural gas and heavy oil to satisfy its energy needs. Nuclear weapons development by President Hugo Chavez would be irresponsible and destabilizing.

Moreover, if Venezuela moves towards a military nuclear program, it may trigger a nuclear arms race in Latin America, which experienced a nuclear competition between Argentina and Brazil in the 1970s and 1980s. This may be similar to what Iran may trigger in the Middle East, where Saudi Arabia, Egypt and Turkey may respond with nuclear programs of their own if Iran gets even closer to deploying nukes. Brazil and Argentina will not idly observe a nuclear-capable Venezuela.

During the visit, the two Presidents agreed to set up a $4 billion joint development bank and to abolish visa regime between their countries.

Russian companies will also help explore oil and other mineral deposits inVenezuela. In particular, Gazprom and Venezuela’s state oil company Petroleos de Venezuela (PDVESA) intend to work together in the giantOrinoco oil basin. Besides, Caracas is cooperating with Moscow in the natural gas exploration and in setting up a gas cartel with participation ofIran and Qatar.

Since Chavez pushed out Western international oil companies, Venezuelacannot count on Western money or technology.  But Russia and Chinaare ready to do business without paying attention to the Comandante’s authoritarian ways. The Russian “package” comes with the access to its weapons market and the “authoritarian capitalism” model. Moreover, bothRussia and Venezuela are desperate to see oil prices hike back up to support their regimes. Russia’s signals that it may join OPEC fit nicely with the Moscow-Caracas axis. However, the Kremlin may not be playing the same game as Comandante Chavez.

Geopolitical Implications

Although Moscow and Caracas share anti-Americanism, their geopolitical agendas are largely divergent. Hugo Chavez strives for a strategic alliance with Russia to stand together against “Yankee imperialism.” Some observers noted, however, that Dmitry Medvedev has been more discreet in his words and deeds.  He seemingly wants to send the incoming Obama Administration a signal that the Kremlin may be ready for a new page in relations with Washington.

However, the global financial crisis might prevent Russia from fulfilling its commitments in such major projects as the energy consortium withVenezuela and the construction of the regional transcontinental pipeline.Moscow may have to delay these projects indefinitely. Thus, the political effect of Medvedev’s trip to Latin America may turn out to be less impressive than Moscow had originally expected.

If Moscow and Washington hope for a thaw, and if no follow-up military activities take place (such as a permanent Russian military base or intelligence collection facility as the one in Lourdes, Cuba), the maneuvers will remain just a geopolitical chess move to boost Moscow’s bargaining power. Boosting presence in Latin America is Moscow’s way to create the levers of influence to seek further concessions from Washington in other areas. Moscow is accumulating chips to trade -- if and whenWashington wants to play.

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