Q: Who have you met with during your visit to Brussels?

A/S Shannon: I met with just about everyone who deals with Latin American Affairs at the European Commission. Over at the European Council, I met with Javier Solana – and people who work in the Council Secretariat, people like Jim Cloos and the rest. I had lunch with members of the European Parliament. I met with a representative of the Dutch Foreign Ministry. And I’ve just come from NATO.

Q: Is the United States a little bit uneasy about what is going on in Latin America? Are the Americans and the Europeans a little bit uneasy about the way it is going – this coming, roaring of the left?

A/S Shannon: You know it is not the left that’s the problem. For us the issue isn’t left or right. The issue is whether or not governments are committed to democracy – whether they are committed to democratic institutions and constitutional process – and also whether they are committed to the kind of economic growth through free markets and economic integration that is necessary to address larger social issues.

And whether they are in the position to try to provide the kind of human capacity that is necessary to take advantage of economic opportunity. As we look out over the hemisphere, at one level, we look out on a hemisphere that is democratic and a hemisphere that has made a broader commitment to democratic institutions and to free markets and economic integration.

But we also recognize that that commitment has created expectations that some countries are having difficulty meeting. And also that in some countries, the political institutions are having trouble keeping up with popular demand – not only popular demand for participation, but also popular demand for results. And because of that, these are countries that need help and attention and solidarity. I think what I found in the course of my consultations here at the European Union and with the Council, the Parliament, and even at NATO, is a general consensus in terms of what the challenges are, that the hemisphere faces – and what the broader solution is.

Q: What is the consensus and what is the solution?

A/S Shannon: I think the consensus is that the Americas is a region that has gone through very dramatic change and that some countries have coped with that change better than others because they have stronger institutions, civil society, and they have a stronger civic tradition. But the continuing presence of poverty in the region, of political party structures in some countries that have trouble representing the popular will and institutions that have limited capability of providing services have given rise to a form of political populism that is a natural phenomenon in a democratic political system where institutions are not meeting the challenge.

This is a clear signal that in those countries that are faced with those kinds of challenges, the institutions have to evolve. They have to become more responsive. They have to become more representative. They have to become more accountable. And the governments themselves need a greater ability to meet the kinds of social demands that are being placed on them.

Q: Is it the disappointment of the people that is causing all these populists, Bolivarians, and indigenous movements to emerge, groups that are breaking the mold, the status quo, or trying to. They are seeking new ways of dealing, in particular, with the United States. Are they immature societies? Or frustrated societies?

A/S Shannon: I’m not sure I’d use the word “mature” or “immature”, because there’s a value judgment there that I’d like to avoid. I think that, for instance, in some of the Andean countries, these are societies in which the democratization has run faster than their institutional development. And therefore, we, and others who are interested in the region, need to find ways to help their institutions evolve quickly and be responsive to popular demand.

Populism as a political phenomenon is not illegitimate. It is not invalid. I think that all democratic societies have experienced populism at one time or another; the United States certainly has – at the end of the nineteenth century and the beginning of the twentieth century. But the United States was able, through the political leadership of people like Franklin Roosevelt, and others, to evolve their political party structures, evolve their state institutions, and bring a new kind of democratic leadership to bear, that effectively allowed for the state to respond to these demands.

And so, what we need to be doing is, number one, showing solidarity with these countries, recognizing that form of political expression is valid, respecting it as such, but then looking for ways to create structures that can channel it in a positive way. When I said that there was consensus around challenges facing the region, and there was consensus around what the steps were, what I meant was that it is all about strengthening institutions. It’s all about linking democracy to development.

Q: In that case, why is the United States so critical about what is happening in Venezuela, for example, with Chavez? Isn’t it a democratic process? Is it not people having their say? Is it not the embodiment of the expectations of the people that have been frustrated for so long? If that’s fine with you, because that is what you are saying, why is the confrontation occurring between Washington and Caracas?

A/S Shannon: Well, the confrontation between Washington and Caracas is driven from Caracas. It’s not driven from Washington. We would quite happily have a conversation with Venezuela if it were intent on having a conversation with us, but the Government of Venezuela has made a strategic decision and it doesn’t want that conversation.

In fact, anti-Americanism is now the core message of President Chavez. It’s replaced the social justice message. It has replaced a combating poverty message – because it is necessary for his ability to mobilize people and to continue a kind of confrontation within his society by maintaining a confrontation outside his society. But our larger concern about Venezuela is not about popular political expression. It’s with the state of health of democratic institutions and the state of health of democratic space within Venezuela and the ability of Venezuelans to have their rights respected and to be able to function democratically within that institutional process

Q: And you think that the political body there is kind of broken?

A/S Shannon: It is not that the political body is broken. Venezuela is in the process of a long-term political transition and – without going into a sociological and political treatise – effectively, Hugo Chavez represented a dramatic break from a political model that had run out of gas, a political party system that had become clientelistic and corrupt to the point that Venezuela’s middle class recognized that only through dramatic political change was Venezuela going to be able to continue a modernization process – a political modernization process, a social modernization process, and an economic modernization process.

But unfortunately, somewhere along the line that transition fell off the tracks and a broad and strong consensus in Venezuela to support political change broke apart and created a political confrontation and a political conflict that exists today. The big challenge that Venezuela faces is how it resolves that confrontation, how it resolves that conflict, how it rebuilds the political consensus that allows Venezuela to continue this modernization process. In my opinion.

Q: That is very soft and very mild and very diplomatic, but in fact your government is trying to isolate Venezuela.

A/S Shannon: No.

Q: For example, in relations with Spain. Spain is trying to sell these famous planes – and you say, “No, no, no, no – not to Venezuela because they could be used I don’t know how, in a way that could be dangerous”. From the Venezuelan point of view, that is trying to put them in the corner.

A/S Shannon: No, no. We are not trying to isolate Venezuela. It would be impossible for the United States to isolate Venezuela, given the kind of energy relationship we have with them and given the kind of historic relationship we’ve had with Venezuela – and all sectors of society, whether it be non-governmental organizations, whether it be universities, whether it be faith-based institutions, the armed forces, whether it be political parties.

Because Venezuela was, since 1958, a democratic, constitutional country, whatever problems its democracy might have had, the United States had a political and economic relationship with Venezuela that it had with very few countries. This is a relationship that is in our interest and benefit to maintain over time. So, we certainly would not want to walk away from that relationship – and even as Venezuela works through very tough moments, it is not in our interest to isolate Venezuela.

But, that said, Venezuela has taken a series of positions to isolate itself from us. Not from the rest of the world, but from the United States. And has tried to break avenues and channels of cooperation that have existed for decades, whether it be the military-to-military, whether it be in the battle against terrorism, whether it be in the fight against drug trafficking, or whether it be more broadly in political cooperation.

The Venezuelan government has broken those ties. One tie it cannot break is the energy relationship, because it depends on that energy relationship for the vast majority of its public sector budget. So, I would argue that our intent is not to isolate Venezuela, quite the contrary, we believe Venezuela can only continue to work through its political problems if there’s a degree of engagement by the international community with Venezuela.

Q: And what about this attempt of Venezuela to make a cluster, to create a front of countries in opposition in Latin America against the United States? He [Chavez} has been the catalyst of something that’s going on in the whole area – establishing links with conventional leaders like, say, Lula or Kirchner, but as well supporting Evo Morales, another one that is not conventional, and a leader that is coming in in Peru that we don’t know yet – good prospects, but the polls are showing that he’s losing ground. There is something – coming together in this melting pot – to establish a structure to oppose or confront the United States. Is this something that worries the United States – having this coalescence of forces – leftist forces, indigenous groups, Bolivarians, populists, conventional leftists all together?

A/S Shannon: I’d make a couple of points. First, I think you are exaggerating his influence. You might not be exaggerating his intentions. I think you are exaggerating his accomplishments – and also attributing to him events, such as the election of President Morales which are independent of his behavior.

The election of Evo Morales reflects events inside Bolivia. It does not reflect external influence in Bolivia, in my opinion. And, more broadly, I don’t think there’s any doubt that President Chavez believes he is offering an alternative vision for the Americas. His vision is quite distinct from the vision that has emerged from the Summit of the Americas process, focused on representative democracy, focused on economic development, free markets, economic integration – and also focused on providing the means to protect the democratic state from drug trafficking, from terrorism, and from organized crime.

He has obviously decided to step away from that broader consensus and claims that he is offering an alternative. Although from what we can tell, the alternative he offers is not necessarily clear. From what we can tell, especially as regards the economy, it is an alternative that has already failed elsewhere in the world. It is attractive to some in the region because the levels of poverty and the levels of social exclusion are high and the level of frustration and expectation is also high. From our point of view, the big challenge we face in the region doesn’t emanate from Venezuela, doesn’t emanate from Chavez.

It emanates from what I just mentioned – from poverty, from social exclusion, and from the inability, in some societies, of institutions to deliver the goods and services that people need and expect in order to take advantage of economic opportunity. And that is why, as we try to address this problem, what we need is what Felipe Gonzales called “más democracia, más desarrollo”. In other words, we have to link democracy and development and we have to show that for democracy to be meaningful, it must be accompanied by economic and social development. And for economic and social development to be equitable, it needs to be accompanied by more democracy. And that’s not what President Chavez offers.

Q: What does the United States think when the first thing Evo Morales does once he’s been elected is to go to Havana to say “My master, mi maestro” to Fidel, that has been for so long your bête noire? Evo Morales goes to Cuba and Chavez goes and offers I don’t know how many million barrels of oil. They are linking together….

A/S Shannon: What was important about the trip that Evo Morales made was not that he went to Cuba or Havana, but that he went to Europe and that he went to South Africa and that he went to China. And his willingness to reach out to the rest of the world, the real world, was an important and a very smart move on his part.

Q: He was really very smart, because the other day when he considered some things dealing with Repsol, he went to the SEC to say – please look at these accounts and see how they are. So he knows how to behave in the real world.

A/S Shannon: But you know if I can kind of say something here. I appreciate the interest in Chavez and Castro, but the real leadership in the hemisphere is in Brazil, it’s in Chile, it’s in Colombia, it’s in Argentina, it’s in Uruguay, Peru, it’s in El Salvador. Those are the leaders who are focused on building institutions, on creating economic growth, creating economic opportunities, and making their countries competitive in the global marketplace. And these are countries and leaders who have accomplished a lot.

I think one of the things we need to do as we focus on the hemisphere is not focus on the divergent voices, not focus on the voices that urge some kind of rupture within the Americas, but focus on the voices that are intent on cooperating, that are intent on mobilizing, that are intent on reaching out not just within the Americas, but outside the Americas, to Africa, to Europe, to Asia, because I really do believe that there is a common agenda in the Americas, although some countries like Venezuela and Cuba might have stepped away from that agenda.

I think that it’s a common agenda that fits well. It fits well – that’s one of the reasons I’m here – with how the European Union views Latin America. And that because we kind of share some common values and a common vision for the region, there is an opportunity to work together, not just the United States with the European Union, but also the rest of the Americas with the European Union – whether it’s on consolidating democratic institutions, strengthening civil society, providing capacity in those societies so that individuals can take advantage of the economic opportunity that is created through trade agreements and through economic growth.

The degree to which we focus on that and the degree to which we find common ground, we’ll be successful. The degree to which we focus on differences in the region and the degree to which we try to create a rupture in the Americas, we’ll fail. That’s my point of view.

Q: On Chavez again, another big issue. He extends his arm to the Mercosur. He wants to join the Mercosur is because he wants to open as well to the world and they are opening their arms to Chavez in order to bring him to the international community in a conventional way. Will he contaminate them or…

A/S Shannon: You’ll have to ask Mercosur and Venezuela what that relationship means.

Q: You said that things were going very well in Colombia. How do you see things evolving there? The future? The FARC?

A/S Shannon: I think that President Uribe has had tremendous success with his policy of democratic security - not only in attacking drug trafficking and in eradicating coca leaf production and destroying cocaine labs, but also in restoring state control over large parts of national territory which had been lost over time. And in taking the fight to the FARC in a way that the FARC has not experienced in a long time. And I think that when you combine the security situation with the fight against organized crime and drug trafficking and the economic results, that Uribe had been able to produce.

He has created a level of confidence in Colombia that has not existed there for quite some time. Colombians today feel that they are in control of their destiny. There still is a lot that Colombia has to do. It is in the process of de-mobilization and re-insertion negotiations with the paramilitaries. It is in the process of negotiations with the ELN. It’s still fighting the FARC. Drug trafficking is still a big problem. But Uribe’s accomplishments and the accomplishments of the Colombian people have restored a level of confidence and purpose to Colombia that it has been missing for some time. In that sense, this has been a success and I think it is going to continue to be successful.

Q: In Central America, we see that in Nicaragua another old foe is trying to make a comeback – Daniel Ortega. Is he being civilized – not the right word – but being conventionalized in political terms? Or will he be trouble for the region?

A/S Shannon: Nicaragua is an interesting case, because what we have seen happen in Nicaragua is that Daniel Ortega and Arnaldo Alleman effectively made a political pact which was designed to control Nicaraguan politics and protect each of them from charges of corruption and criminality. And, as such, this pact was an obstacle to good governance and to the Nicaraguan people’s ability to choose their political leadership in a free and fair election. And for Nicaragua to continue to progress, for Nicaragua to take advantage of the CAFTA agreement, to take advantage of HIPC debt relief, for it to take advantage of the Millennium Challenge Account, it needs new political leadership. It can’t rely on the leaders of the past.

Therefore, breaking that pact and opening up new political space in Nicaragua has been an essential part of what the Nicaraguan people are trying to do. And in Nicaragua, groups like Moviemiento par Nicaragua and other civil society groups have been protesting against that pact, have been protesting against a political cabal that was attempting to limit and control Nicaragua’s political future. And they’ve been quite successful in this regard.

But as we move toward elections, the international community and the United States are going to be looking to see whether or not Ortega and Alleman continue to try to exercise control over who the candidates are and what selection the Nicaraguan people have. And we are going to continue to urge that Nicaraguan elections be as open as possible so the Nicaraguan people actually have a free and fair choice – and that that choice represents Nicaragua’s future and not its past.

Q: In last night’s State of the Union speech by President Bush – the Americas were lost in the forest. Have the Americas been put outside the margins of the political activity in Washington? Are the Americans as interested as they used to be years back?

A/S Shannon: Oh yes. If you just look at what we are doing in the hemisphere. President Bush was just in the hemisphere for the Summit of the Americas. The Secretary of State has been in the hemisphere several times now. And, more importantly, if you look at our policy initiatives in the hemisphere, if you look at the new money that’s flowing into the hemisphere from the Millennium Challenge Account, if you look at what we’ve done in terms of our trade policy, and if you look at the free trade agreements we’ve concluded and the ones we are currently negotiating, it’s two-thirds of the hemisphere’s GDP. We are engaged. I wish that the Americas could be mentioned in every speech every government official gives, but it doesn’t always work that way.

Q: One problem you have with the Latin Americans is immigration. Is this going to move in the near future? When President Bush came to the White House for the first time, he came with the idea of opening the borders and allowing the Mexicans, the Guatemalans to come in, then something happened the borders were closed, but the Mexicans are still crossing the borders. What are the plans of the American administration? The United States needs all these laborers for its economy.

A/S Shannon: President Bush has committed himself to immigration reform – and especially the immigration reform that would include a temporary workers’ program. A temporary workers’ program would attempt to link willing workers with willing employers and create a process whereby employers in the United States who need workers could bring those workers into the United States from a foreign country – and not just Mexico or Central America, but any country – in a way that would regularize their status within the United States. That proposal is being debated and worked on in our Congress right now; the process still has a ways to go. So we’ll see what legislation eventually emerges from the Congress. But the President is committed to immigration reform and he is committed to a temporary workers’ program.

Q: And the last question, dealing with Castro. Castro is there, to stay forever.. But, what after Castro? What are your ideas for when Fidel is gone?

A/S Shannon: It depends entirely on the Cuban people. Obviously, as President Bush has stated, as have other leaders, that what we would like to see in Cuba is a peaceful transition to democracy. Peaceful and rapid transition to democracy. And we believe that’s what’s going to happen. As violent and brutal as the Castro regime has been, it has not been able to break the will of those people on the island who want to see democracy. And we believe that the Cuban people will indeed become democratic, but they are going to become democratic in their fashion, and they’re going to become democratic in a way that allows Cuba to re-insert itself in the inter-American community. And we look forward to that day.

Q: And what if the regime tries to continue in power and is not ready to give up power and make the democratization happen.

A/S Shannon: Regimes never give up power. We saw what happened in Eastern Europe. Once people realize that they have freedom in their grasp, they will grab it.

Q: Thank you very much.