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Sept. 11 Attacks Had Broad Impact on Latin America - 2002-09-03

The September 11 terrorist attacks on the United States had repercussions in Latin America on several levels - diplomatic, political, and economic. The attacks further aggravated economic instability in the region.

Following the September 11 attacks, Latin American countries immediately expressed their solidarity with the United States and announced efforts to combat terrorism. A special session was held at the Organization of American States, where members voted to reactivate the Inter-American Treaty of Reciprocal Assistance - a Cold War relic that was virtually moribund.

However, the expressions of solidarity began to fade when the United States began its attacks on Afghanistan's Taleban regime in October 2001. Public opinion polls in countries like Brazil showed widespread opposition to the attacks.

Nevertheless, regional governments did cooperate with Washington by stepping up surveillance of Arab immigrant communities in the hemisphere - especially in the Triple Border area of Brazil, Argentina, and Paraguay. Long a hotbed of contraband and other illicit activities, Washington also considers the tri-border region a support base for Middle East terrorist groups.

After September 11, Paraguayan police carried out sweeps in border cities like Ciudad del Este looking for suspected terrorists. However, little concrete evidence turned up. By the end of the year, Brazilian security officials were openly contradicting Washington, saying flatly they found no evidence of terrorist activity in the area.

The September 11 attacks also had an impact on Colombia by changing the nature of U.S. military aid to the war-torn nation. The former Clinton administration had provided Colombia with $1.3 billion in 2000 to combat the drug trade, which finances Colombia's largest leftist rebel group, the FARC, and other armed groups. After September 11, more U.S. money will be provided to Colombia, and it will now be used more directly to help the Colombian military in its counter-insurgency campaign.

The Bush administration has labeled the FARC, a smaller leftist group known as the ELN, and rightwing paramilitaries as terrorist organizations.

But perhaps the greatest impact of September 11 in Latin America has been economic.

Brazil's minister of trade and development, Sergio Amaral, says several sectors were hit hard.

"I think the impact was very strong. Certainly, in the area of tourism and the profitability in civil aviation," he said. "It was very strong also in increasing the level of uncertainty by investors. The attacks of September 11 increased what was already beginning to be seen - a sense of risk aversion. This increased after the attacks and certainly this contributed to the economic uncertainty that some Latin American countries are experiencing."

Air travel in Latin America declined. The number of passengers on international flights dropped by more than eight percent in the weeks following the attacks. South America's largest carrier, the Brazilian airline VARIG, is in financial trouble, partly because fewer passengers were flying after September 11.

Tourism too dipped. In Rio de Janeiro, tourist arrivals fell by more than 16 percent in September 2001, compared to August. By November arrivals began to increase, but even by March of this year there were fewer tourists visiting Rio than in March 2001.

However, not all can be blamed on September 11. The economic collapse of Argentina, the slowdown of the U.S. economy which started before September 11, and other factors have had a negative impact on travel to Latin America.

Brazilian economist Paulo Levy, of Applied Economic Research in Rio de Janeiro, says overall the biggest impact of September 11 was on the flow of trade and investment capital.

"Contrary to what was expected earlier this year when people thought that the worst was over, the recovery in the U.S. is taking place more slowly than initially thought, and this is reflected in slower trade flows around the world, and this is affecting most Latin American countries, certainly it is affecting Brazil," he said. "I believe that financial flows is also something in which similar things happened. Part of the anxiety and risk aversion has to do with this perception of a more unstable world. Risks of war are showing up on oil prices, which also affect negatively on Brazil. So there are several aspects. But not everything can be assigned to the September 11 events, but part of it certainly reflects the perception of a more unstable world."

On the diplomatic front, Latin American officials believe September 11 caused Washington to shift its attention away from the hemisphere. President Bush came to office promising to put relations with Latin America at the top of his foreign policy agenda. But diplomats in the region complain that since September 11 the Bush administration has ignored Latin America, especially its growing financial problems.

The U.S. ambassador to Brazil, Donna Hrinak, recently acknowledged this perception - saying the war on terrorism superseded U.S. relations with Latin America. However, she told reporters in Brasilia last month there is now the realization that the terrorism war will last years, and that there are other issues that need to be worked on - including expanding free trade. It remains to be seen whether this can happen, given the repercussions from September 11, and now the possibility of a U.S. attack on Iraq.