Quietly, Encouraging Changes Occur

When the U.S. Air Force Southern Command’s 10-year usage rights for Ecuador’s Manta air base expire in 2009, they can expect to be evicted in favor of China.

President Jamil Mahuad signed a 10-year lease agreement with the US Military’s Forward Operating Location (FOL) in 1999. The Manta base is not geopolitically important for US national security, but Southern Command (South Com) currently uses it to combat illegal cocaine trade in the “source zone” of Colombia, Peru and Bolivia. The Air Base shares a common runway with Manta’s Eloy Alfaro International Airport terminal, but the airbase has a separate office for cargo, while the airport handles passengers. About 475 US military personnel are stationed at the air base under a under a 10-year agreement signed with Quito in November 1999 and due to expire in 24 months.

Acording to Latin Americanist Marc Becker, the agreement with the US military “has proved to be unpopular and some argue unconstitutional. The purported purpose of the FOL was to help interdict drug shipments from neighboring Colombia, but opponents contend that the U.S. government has . . . move[d] well beyond that mandate into counter-insurgency and anti-immigrant activities.” There are also complaints that the base was consolidated by expropriating land from indigenous groups and small farmers, and that is being used by Colombian pilots and as a center of anti-guerilla intelligence as a part of Plan Colombia, and for the targeting of alleged terrorist groups. From March 5 to 9 of 2007, more than 400 activists gathered in Manta for the first International Conference for the Abolition of Foreign Military Bases. They chose Manta due to the new government’s stance against continued US presence.

When Ecuadorian president Rafael Correa was campaigning in 2006, he promised to make the contract renewal with the US contingent on a reciprocal agreement allowing Ecuador to build or station military on an airbase in Miami, Florida. The US rejected this idea, and Correa offered the base to the Terminales del Ecuador, a subsidiary of Hong Kong-based Hutchison Port Holdings [HPH] during to Beijing on Nov. 21. China would be most likely to use the base for cargo transit in trade, rather than security purposes. Strategic Forecasting [STRATFOR] predicts that Correa’s offer is “aimed partly at maintaining domestic support, partly at extracting preferential trade access to U.S. markets (something Washington probably will cave in and deliver), and partly at securing Chinese capital for fulfilling Manta’s future role as the largest Sino-Latin American trade transshipment hub on the South American west coast.”

Correa’s presidential campaign also focused on the need to improve regional transport and trade in order to compete with ports in Peru, Colombia and Chile and to link to industry in Brazil. Some of the roads planned between the Andean countries would also connect waterways linking Ecuador and Brazil. The agreement will create profits for Brazil as well as Ecuador, as the two countries recently signed an agreement to link Manta to the city of Manaus by railway or highway corridor. According to the government, the details of this project have already been discussed with other interested Chinese investment firms. This corridor project is a key part of IIRSA, the South American regional infrastructure integration initiative.

Since before his election, Correa has also emphasized the necessity of attracting Asian investment in order to upgrade infrastructure and therefore expand regional and international trade. In offering the Manta base to HPH, he said that he was offering Chinese investors a “geopolitical window,” which would make Ecuador a bridge for accessing markets in South America.

Chinese Investment and US Relations

Chinese investment in Manta began when Chinese, Chilean, Singaporean, Japanese, and US port companies expressed interest in the Manta port (not the air force base). In October, HPH gave a $1 million bond to the MPA . In November, 2006, HPH was the only final bidder and the Manta Port Authority (MPA) gave HPH operating concessions in exchange for $486 million (added to $55 million promised by the MPA) to upgrade facilities over the next 30 years.

According to Business News Americas, Hutchinson Port Holdings [HPH] is the port-operating subsidiary of Hong Kong’s Hutchison-Whampoa. The company focuses “on trans-Pacific/Atlantic corridor cargo trade” and has a portfolio of ports in Latin America. “In 2001 it bought out Philippines-based port operator ICTSI, which had various Latin American interests in Argentina, Mexico and the Bahamas. In Panama, HPH’s Panama Port Company operates the ports of Cristobal and Balboa. Manta is the closest port to Asia on South America’s west coast.” Manta is a desirable port for HPH as it is the closest port to Asia on Latin America’s west coast. The Manta deal could also help smooth out a disagreement between Ecuador and China’s major state energy players over the October increase of Ecuador’s oil taxes from 50 percent to 99 percent.

The next steps would involve HPH accepting the post 2009 concession for Manta’s air force base (it already controls the sea port), and another Chinese investment firm’s participation in financing the road/rail network between Manta and Manaus, Brazil.

According to STRATFOR, “while this is not the first time China has been made such an offer by a Latin American nation, it is the first time U.S. geopolitical interests in the region have been so closely brushed up against.” They forecast that “from a security perspective, a Chinese military presence in the Western Hemisphere would be viewed by the United States as a hostile move, and would almost inevitably invite the Pentagon’s ire.” They predict that Beijing and especially the People’s Liberation Army will try to maintain good relations with the US to prevent remunerative trade policies such as tariffs.

“It’s ironic that it is China, not a European power, that would challenge the Monroe Doctrine. The irony is doubled as China turns the original US Open Door Policy of 1900 (designed to allow US access to Chinese markets) back on the US to get better access to Latin American markets,” comments Sanho Tree of the Institute for Policy Studies.