Failed Sanctions Boost Russian Business in Latin America

"US sanctions only motivated Russia to search for new markets and mechanisms. And Latin America, discouraged by Trump's policy, is again looking for new footholds."

Tue, Nov 21, 2017
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Mexico is buying Russian passenger jets

The largely ineffective sanctions policies of the EU and Europe have only succeeded in impeding business with those countries, while stimulating Russian economic contact with developing and third world economies.

The legacy of the Soviet era is still a meaningful advantage for Russia around the world, and Latin America is no exception.

Russia has a powerful diplomatic presence around the world - in South America this is particularly true in Brazil, Venezuela, Columbia, Argentina, Mexico, and Chile - and then there is Cuba.

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Russian diplomats are particularly adept at working with large Russian companies to facilitate commercial activity.

Here is a revealing report from Russian TV news about how Russian companies are making inroads in the Latin American market.

Full transcript follows below


Full Transcript:

Anchor:

Latin America's population is twice as big as in the US. But, of course, many times less in buying power. In order to trade with Latin Americans, it's necessary to open credit lines.

Before the sanctions it meant working with banks in the US. A dead end? Well no. US sanctions only motivated Russia to search for new markets and mechanisms. And Latin America, discouraged by Trump's policy, is again looking for new footholds.

Reporter:

Every Mexican mariachi will certainly have something Russian in his repertoire, although in a typical Latin American arrangement.

The links between our countries, it seems, aren't obvious, but if you dig deeper they can be found. Under the unusual paint-job the domestic Sukhoi Superjet is not easily recognizable, but meanwhile, the largest private airline in Mexico flies on them.

22 planes, every domestic line, more than a million passengers. From Mexico City to San Luis Potosi we fly on the Superjet, and I must say that this is one of the most pleasant flights.

Comfortable wide chairs, and the distance between the rows is such, that even with my height, 1.94 meters, it's very comfortable.

Mexicans like them too. At the Russian delegation meeting, they sign documents for 10 more planes. At the same time they ask, when will something new from Russian aircraft manufacturers will appear on the market?

Miguel Aleman Velasco, Interjet Chairman of the board:

"We aren't just interested in MC-21, but we already want to determine the date when we will buy it, it is comparable to the plane that we already have in our fleet, the Airbus-320. But we're interested in aircraft that are lighter and would consume less fuel."

Reporter:

In the Paraguayan Ministry of Defense, the Russian business mission, the rarest case, is met with military honors. Military cooperation is a special topic. The details are not disclosed, and only fighter models are shown at the talks.

The highest level of honor is in Bogota as well. Russians are met by Juan Manuel Santos himself, the President of Colombia, who in 2014, like Mexico, supported the US on the Crimea issue, and is now seeking contacts with Moscow. All of them welcomed the Russian Minister of Industry, Denis Manturov.

Denis Manturov:

"When I meet with my fellow Ministers in these countries, we raise specific issues and thus create a favorable wind for our enterprises. We ask for assistance and recommendations on arranging meetings between the interested agencies."

Reporter:

It's noteworthy that among the products in question, there are no traditional oil and natural gas, for both Russia and many Latin American countries. In this we are competitors. And there's an important thing such as synergy.

For example, in Paraguay, where there's no access to the ocean, the concept of a "waterway" is a popular one, by which cargo can be delivered to the ocean along rivers. Port infrastructure construction along these routes can be helped by Russian engineers. It's called engineering export, when qualified personnel from abroad gradually train local workers.

In neighboring Uruguay on the ocean shore there's already a modern transshipment water base. But the Asuncion port is half-ruined, with leaning rusty cranes. But there are many specialists in Russia who can help restore it: river ports is exactly what we do very well.

Denis Manturov:

"We are ready to share our experience, technologies, and, of course, products."

Reporter:

In Paraguay the power of Russian engineering is known through experience. The beginning of the 30's. Paraguay enters a war with Bolivia. Paraguay's victory is brought by Russian officers, Wrangel's immigrants, who in civilian life will be at the head of the engineering department of the local university.

Their names are in the National Pantheon: General Belyaev, officers Salaskin, Serebryakov, Ermakov, Kanonnikov. And now Russian UAZ are selling well here. For the local lack of roads it's a win-win option.

Axel Bendlin, UAZ distributor in Paraguay:

"We believe that all the Russian products are very reliable, these cars are like tanks, they will serve not for 1 year, but for life. This is exactly what we need."

Peter Fradkov, Director Russian Export Center:

"We somehow always treated Latin America, as a last resort, went straight to Asia or, say, the CIS, which is all very important, but Latin America is no less of a potential market. And most importantly, we now have something to offer."

Reporter:

300 million potential buyers. MERCOSUR is the common market of South American countries, which includes the majority of the continent's states. But Mexico is also a member of the NAFTA, the Free Trade Agreement with the US and Canada, and this expands the possibilities.

And there's the Pacific Alliance, which includes Colombia. There, a shop for servicing Russian helicopters runs on the outskirts of Bogota.

Fernando Lopez, Director of Vertical:

"This is very high-quality and reliable aircraft that demonstrates excellent performance and doesn't require high maintenance costs compared to European or US counterparts. Our customers are very happy with these helicopters."

Reporter:

And now Mexico is offering to start a joint manufacture of helicopters.

Andrei Boginsky, Russian Helicopters CEO:

"They want a reliable equipment that can work in any weather conditions, which would help to solve not only military, but also civilian tasks."

Reporter: 

There is still one more classic:

Denis Manturov:

"Traditionally, we get agricultural products from them, fruits and meat, and that's citrus fruits, bananas, avocados, coffee, cocoa beans. And we don't grow these at home."

Reporter:

But now it can all be grown with the help of our agricultural machinery. For the first time since Soviet times it was possible to convince people to try it out. The owner of this giant Paraguayan farm, Ganadera Albodor, 70,000 hectares of land, 40,000 cattle will now clean up his fields on Russian harvesters.

Carlos Hernandez, Latin Fund:

"We need technologies that will help save fodder in the winter period, when the food isn't growing. And we need dependable strong harvesters."

Reporter:

The beginning is promising. The business mission opens doors for Russian companies to Latin America, and through it lies one of the roads to the global market.