China to Displace the U.S. at Ecuador’s Manta Base

By Nicole M. Ferrand.*

The Manta Air Base (also known as Eloy Alfaro Air Base) is a combination of civilian airport and military air base on the outskirts of Manta in the province of Manabí in western continental Ecuador. The airport was inaugurated by the Ecuadorian Air Force on October 24, 1978 and is currently used by the United States Air Force (USAF) division of the United States Southern Command for operations against illegal cocaine trafficking in northwestern South America. In 1999, the U.S. signed a ten-year agreement with the Ecuadorian government that allows the U.S. to station up to 475 military personnel at Manta and use a portion of the base. Once the contract was signed, the U.S. spent over US$70 million to prepare the base for US aircraft and personnel. A new runway was installed and upgrades were made to base facilities. Today, the base can accommodate up to eight aircraft: four large and four of medium size.

Since then, U.S. operations have attracted little attention, until Ecuador’s 2006 presidential election campaign, when President-elect, Rafael Correa, pledged not to renew the U.S. lease in 2009. This would mean losing a strategic drug war position for the United States. Manta has also attracted attention among Ecuadorians who reject being part of Plan Colombia, the US-Colombia policy to combat narco-trafficking and terrorism. Another reason why some Ecuadorians oppose the base is their belief that it is not only used for counter-drug missions since surveillance equipment can be used to watch activity in their country, Colombia, Peru, Venezuela and Bolivia. So on March 19, 2008 the Ecuadorian Constituent Assembly (made up of Correa supporters) voted to outlaw the installation of any foreign military bases in Ecuador.

The Eloy Alfaro air base is one of five primary air bases in the country. South COM claims that the installations play an important role in counter-drug operations. On average, the Manta Base is supported by 250 personnel from the US Armed Forces and US Customs and Border Patrol. An additional 65 US citizens and 180 Ecuadorian contractors support counter-drug operations. The missions carried out from that base over the Eastern Pacific and the Andean mountains have greatly aided the overall counter-drug strategy for the region since they target either ships or aircraft carrying drugs, help identify them, aid other aircraft or ships seize the drugs and destroy them. In addition, they also deter aircraft from moving drugs around Colombia.[1] Since Ecuador lies between the world’s top three cocaine producers: Colombia, Peru and Bolivia, the location makes Manta an attractive transit point for a trafficker and locals fear that when the U.S. military personnel leave the city, Manta could turn into a haven for Colombian drug cartels.

Since 1999, the Forward Operating Location (FOL) at Manta has conducted more than 3,300 counter-drug missions, totaling over 18,000 flight hours and has contributed directly or indirectly to the seizure of more than 52,000 kg of illegal drugs with a street value exceeding US$2 billion. The Manta mission has been a success since it started, and it continues to net more drug traffickers each day. In 2006, 1,200 missions helped seize more than 258 tons of illegal drugs with an estimated street value of US$5.2 billion.[2]

Since Correa’s election, Washington has been worried about losing Ecuador to the Venezuelan sphere of influence. Correa is now a staunch Chavista and analysts believe he will comply with his campaign promise to close Manta, and has already publicly considered using the base as an international airport to link South America with Asia. Colombia and Peru have already offered air bases from where U.S. forces can continue the counter-drug mission, an offer the United States should soon seriously consider.

When 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, so Correa offered the base to the Terminales del Ecuador, a subsidiary of Hong Kong-based Hutchinson Port Holdings (HPH) during a trip to Beijing on November 21, 2007.

Ecuadorian President Rafael Correa

Some experts believe 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 into and deliver), and partly at securing Chinese capital for fulfilling Manta’s future role as the largest Sino-Latin American trade trans-shipment hub on the South American west coast.” The Ecuadorian President wants to improve regional transport and trade in order to compete with ports in Peru, Colombia and Chile. Some of the roads that are to be used for trade 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. 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.[3]

Before becoming President, Correa 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, Mr. Correa said that he was offering Chinese investors a “geopolitical window,” which would make Ecuador a bridge for accessing markets in South America. According to a communiqué on the Ecuadorian presidential website last month, the government hopes that China accepts its offer as part of a “doorway” for the Asian country into Latin America.

Chinese Investment in Ecuador and US Relations
Last year, Chinese, Chilean, Singaporean, Japanese, and U.S. port companies expressed interest in the Manta port (not the air force base). In October, HPH gave a US$1 million bond to the Manta Port Authority and 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 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 a desirable port for HPH as it is the closest port to Asia on Latin America’s west coast.[4]

Map of Ecuador: Manta Base.

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 U.S. as a hostile move, and would inevitably invite the Pentagon’s ire.” Insiders predict that members of the People’s Liberation Army will be moving in soon but will “try to maintain good relations with the US to prevent remunerative trade policies such as tariffs.”[5]

Analysis
Correa’s decision to offer the Manta Base to China, refusing to renew the lease to the United States while hypocritically seeking to renew preferential trade privileges under the Andean Trade Promotion and Drug Eradication Act, or ATPDEA, ought to make the US reject the trade agreement with Quito. From day one Correa has done nothing but condemn free trade and attack the U.S. as he moves his country closer to the Cuban - Venezuelan-style tyranny. Correa has also seized vast American oil interests like Occidental Petroleum’s US$1 billion operation last year. The U.S. doesn’t ask much from Ecuador. Situated between Colombia and Peru, Ecuador has only provided a small operating base at the port of Manta, with 300 U.S. troops conducting aerial surveillance to keep Colombia’s FARC Marxist narco-terrorists from bringing war to Ecuador as they have to their own country. Instead of helping on that front, Correa now vows to shut down the base and let the region go un-patrolled. Correa denounces free trade as “yanquee imperialism” yet wants the one-way trade privileges for another five years. Why should the U.S. trade with a nation led by an extremist who seeks to use free trade to consolidate his grip on power?

With regards to China, Ecuador is explicitly offering itself up as a geopolitical entry point into South America for Beijing. Until now, the Asian nation has approached Latin America, according to them, “only for energy and trade deals.” But by accepting Correa’s offer, Beijing might be looking to strategically move into the region and quietly enter the US sphere of influence. Even though the value of the Manta air base lies more in the realm of trade (as a cargo transit point) than in the military, the air base’s current U.S. military role means the potential impact on Sino-U.S. military relations cannot be ignored. Beijing probably will wait to see how Washington reacts to the initial Chinese bids before trying to undermine the U.S. counter drug strategy in Latin America for reasons of trade.

It is important to point out that the current U.S. operation of the FOL injects more than US$6.5 million into the local economy of the city of Manta. All aircraft (such as from the Ecuadorian Army, Air Force, and commercial airlines) that are operated out of Eloy Alfaro benefit from world class response services in cases of accidents, fires or rescues, 24 hours a day, 365 days a year. The FOL annually invests over US$2 million to operate the Manta FOL Fire Department and approximately US$200,000 in airport maintenance costs. In addition, the FOL provides financial support to multiple local charities as part of its goal to be good citizens and guests in Manta. U.S. personnel help tutor English in a local community center and support charities including orphanages and a school for children with disabilities. The FOL’s modern, state-of-the-art fire and emergency response teams contribute to the safety of the Eloy Alfaro Airport and the Manta community. It will be interesting to see whether the Chinese firms continue these policies. Experts warn that it is more likely Beijing’s presence could be used in the future for intelligence collection or other types of anti-U.S. activities.

China’s move to have a military and trade base in Latin America should be of concern to the United States and its allies in the region, as Chinese companies now operate in two major U.S. west coast ports: New Orleans and the Panama Canal as well as a large port in Freeport, Bahamas.

Panama Canal

Experts agree that Beijing has undoubtedly already put to use their assets in the conduct of its espionage warfare against the U.S. and there are reports that the Chinese shipping conglomerate Hutchison Whampoa Ltd. has a significant presence at the Lazaro Cardenas seaport in Mexico, as well as other Mexican ports. In addition, the Hutchinson Whampoa shipping firm, with ties to China’s leadership and its armed forces, now has a 50-year contract to run the two major ports on the canal’s Atlantic and Pacific entrances. Moreover, analysts assert that Panama gave Hutchinson broader powers in legislation known as “Law No. 5” which enables Hutchinson to assign the pilots who take control of ships and steer them through the canal enabling them to block passage of ships to meet its business needs. More troubling is the fact that U.S. naval ships will be at the mercy of Chinese-controlled pilots and could even be denied passage through the Panama Canal by Hutchinson.[1] In addition, the Chinese Communist Party has gained an intelligence information advantage by controlling this strategic chokepoint. It is worth noting that the Chinese presence in Panama is so huge, that the Congress passed a law that makes teaching of Mandarin obligatory.

With Manta and the Panama Canal under Chinese control, the above mentioned scenarios should be taken seriously. It will be interesting to see whether Ecuador allows the PLA to move into Manta and conduct espionage operations, after passing the law that forbids foreign military bases in the country, threatening the relative peace that the region has enjoyed for the past 100 years. Certainly Beijing’s presence in Latin America could boost Chavez’s stand and his friends while endangering US allies, especially Colombia. China now has huge powers over what goes through the Panama Canal and could soon be in control of another major strategic point in Manta with ominous consequences for the US and the region as a whole.

*Nicole M. Ferrand is a research analyst and editor of “The Americas Report” of the Menges Hemispheric Security Project. She is a graduate of Columbia University in Economics and Political Science with a background in Law from Peruvian University, UNIFE and in Corporate Finance from Georgetown University.

[1] China, Ecuador: Beijing’s Latin American Opportunity. November 27, 2007. Stratfor.
[2] Ecuador Declines US, Offers Manta Air Base to China. December 12, 2007. Toward Freedom. [3] Airmen, drug runners play game of cat and mouse. August 6, 2007. By Louis Arana-Barradas. Air Force Print News.
[4] US Faces Eviction from Ecuadorian Base. January 12, 2007. Global Policy Forum.
[5] Stratfor – Ibid.
[6] China Company grabs power over Panama Canal. August 12, 1999. The Washington Times.