In realism we trust? China and Russia’s rising influence in Latin America

(1)

In realism we trust?

China and Russia’s rising influence in Latin America

A Case Study on the Nicaragua Canal Agreement

E.W.M.M. van Kempen 1910256

Supervisor: Dr. G.G. de Valk

Second reader: Mr. Drs. W.J.M. Aerdts

Master’s Thesis Crisis & Security Management January 9, 2018

(2)

Abstract: In realism we trust?

The theory of realism is the go-to theory when studying international relations, but are all swans white? In 2012 Chinese investment company HKND and president of Nicaragua, Daniel Ortega, signed the Nicaragua Canal Agreement, granting HKND the right to construct a canal straight to Nicaragua. Not long after, the news came out that Russia would be

responsible for safeguarding constructions and would be allowed to build its own military base in Nicaragua. With Russia expanding its military powers in Latin America some might wonder: are we reliving Cold War times? The aim of this research is to test if it is possible to make an accurate prediction on the outcome of the Agreement by using the theory of realism. Or if the Agreement is realism’s black swan and we should broaden our views for studying international relations to opposing theories such as the interdependence theory.

(3)

Ever since the time when the bewildered successors of Columbus failed to find the transit to the East, by which they meant to pass by the land they had discovered to reach the far countries of the Orient they originally sought, the isthmus which connects the Northern and Southern continents of the Western Hemisphere and separate the Atlantic from the Pacific Ocean has been the subject of the deepest interest, and the scene of a wonderful amount of research, considering the difficulties of topography and climate (Reed, 1899, 552).

While the world was at war in 1914 a ship sailed through the newly completed Panama Canal (Gross, 2014, 1023). Due to the 81-kilometer long Panama Canal ships do not have to sail around Southern America anymore. There have been different parties involved in the construction of the Panama Canal. The French started constructing the canal in 1880, but it turned into a very chaotic project on which the French lacked overview, and the construction company went bankrupt in 1889. Years later, in 1904 the United States took over the

abandoned project in a more structured way and finished it in 1914 (McCullough, 2001, 609).

Almost a century later, in July of 2012, president of Nicaragua, Daniel Ortega, and Hong Kong investment company HKND came to agreement to build a similar waterway through Nicaragua (Project background, 2014, 1 of 1). A canal that will, just like the Panama Canal, connect the Pacific Ocean with the Caribbean Sea; a canal that will run straight through Lake Nicaragua, from the Caribbean lowlands to Punta Gorda in the Caribbean Sea (Alvarez & Huete-Pérez, 2015, 3990). Investment company HKND will, together with the financial help of its investors, be responsible for the construction of the canal, and Russia will militarily secure constructions (Paniyev, 2014, 2 of 8). In 2014 construction work officially started when the first shovel hit the ground. President Daniel Ortega expects that the Nicaragua Canal will positively influence the Nicaraguan economy, just as the Panama Canal did for the

Panamanian economy, and Ortega hopes that the canal will ‘drag’ Nicaragua out of poverty (Doyle, 2016, 5). At this moment 42 percent of citizens of Nicaragua live below poverty level, as compared to ‘only’ 26 per cent in Panama. That 74 percent of Panama’s citizens live above poverty line is partly due to the economic wealth the Canal has brought the country

(6)

The desire to construct a Canal through Nicaragua isn’t one from recent years Dutch

newspaper Volkskrant writes in a, into Dutch translated article from Reuters. In the sixteenth century it were the Spanish that discussed the possibility of building a canal through

Nicaragua. The United States chose Nicaragua at first for becoming the first country with a waterway between the Pacific and Atlantic Ocean, but later on decided on Panama instead (Reuters, 2006, 1 of 3). According to Daley the construction of the Nicaragua Canal is one of many failed dreams, but now Chinese investor Wang Jing and Ortega have reached an

agreement many believe that the ‘dream’ will finally become truth: Nicaragua will get its long-desired canal.

According to the building scheme the canal will be three times as big as the Panama Canal, and twice as deep. The 273 kilometer long canal will run through a variety of ecosystems, and different forests. At this moment the project is running behind on schedule and Chairman Wang Jing, who’d be partially responsible for financing the canal, lost the majority of his fortune during the stock crash of 2015. However, HKND officials have said that the project is still on. According to HKND project is running behind on schedule because they are busy performing extra studies on the possible environmental consequences of the canal (Daley, 2016, 2 of 5.).

In return of the rights to construct a canal, HKND will pay Nicaragua 10 million US dollars during the first ten years of the operation and Nicaragua will be granted 10 percent ownership of the canal in the eleventh year and will receive an extra per cent per year until Nicaragua fully owns the canal at year 100. But, Laubaugh says that the real winners of the canal will be Daniel Ortega’s Sandinista Party and the Chinese nationals. Laubaugh believes that the Nicaraguan people will not share in the economic prosperity of the canal. He says that whatever Nicaragua will make as a profit from the deal with HKND will most likely not be invested into the country, but will be used to fund the government that is ruling Nicaragua at that time to keep the political machine running. It is possible that Ortega will still be president of Nicaragua once the canal becomes functional and Laubaugh believes that Ortega will use the money to set up an oppressing well-funded government, as has been done in Venezuela after they had nationalized their oil industry (Laubaugh, 2014, 14-15).

(7)

A project such as the construction of a canal could bring many job opportunities to Nicaragua. But, Dijck, Mons & Schaick say that in previous projects Chinese firms have always preferred using their own Chinese staff instead of local workers at every level of the project. For that reason they do not expect HKND to be hiring Nicaraguan citizens for this project. They expect the Chinese economy to benefit from the construction of the canal as well as that they believe that the canal will serve the Chinese geopolitical interests. Dijck et al., state that the canal will increase the import and export between China and the Latin American region, and when China’s import and export increases towards Latin America so will its influence in the area they argue (Dijck et al., 2015, 8).

According to the article by Laubaugh Wang Jing has said that the Chinese government isn’t involved in the Nicaragua Canal Agreement. Laubaugh supports his claim by pointing out that there are no diplomatic ties between Nicaragua and China (Laubaugh, 2014, 7). But in

contrast to what Laubaugh writes about the role of the Chinese state, the South China

Morning Post, a Hong Kong, in English published newspaper, has posted an article online in

July of 2013 in which they state that a ‘China state-owned contractor’ is involved in the Nicaragua Canal Agreement. This state-owned contractor is, according to the newspaper: CRCC (China Railway Construction Company) a railway company that has around a quarter of a million employees within China (Revealed: China state-owned, 2013, 2 of 5).

While some wonder about the economical aspect of the canal or the involvement of the Chinese state others raise the question if a canal so close to the Panama Canal is even necessary? Daley has written an article for newspaper the New York Times in which he

discusses the opinion of multiple experts who have said that a new canal so close to the one in Panama will lead to an overkill and possibly to price wars between the two competing canals (Daley, 2016, 3 of 5). Bessems says in an article he has written for the Dutch news site the

NOS that in recent years the Panama Canal has been widened and deepened so Post-Panamax

container ships can also pass the canal. At first the Panamax were the largest ships that could pass the Panama Canal, but since the rise of the much larger container ships wanting to cross the ocean, Panama had decided to expand its canal. This process took over seven years and has cost more than 7 billion dollars. While according to Bessems Nicaragua first wanted to provide an alternative waterway to the Panama Canal by being creating a canal wide and deep enough for Post-Panamax container ships this isn’t necessary anymore now the Panama Canal has been expanded (Bessems, 2015, 1 of 4). But Dijck et al. say that the Nicaragua canal will

(8)

still be substantially larger than the Panama Canal, and even now the Panama Canal has been widened and deepened still around 10 percent of the largest ships aren’t able to pass through the Panama Canal, but these super-tankers will be able to sail through the Nicaragua Canal (Dijck et al., 2015, 2).

Alvarez & Huete-Pérez say that the granting of the canal to HKND was done even before the first impact assessment of the situation had been made and without a bidding process prior to it. They say HKND has no related expertise in the field; HKND doesn’t even have a track record they say. Alvarez & Huete-Pérez show particular concerns for the consequences of the canal on Lake Nicaragua (also called Cocibolca or Granada). They fear that the biodiversity in the lake might become damaged due to construction and the usage of the canal (Alvarez & Huete-Pérez, 2015, 3989). Lake Nicaragua is the largest fresh water lake of Central America, and in order to establish a canal through Nicaragua 80 kilometers trench have to be dug up on the bottom of the Lake Nicaragua and could contaminate the lake or even kill it (Daley, 2016, 3 of 5). In the article: A Canal to Nowhere published in 2015 in the business analysis journal of the Wharton School, it is said that Lake Nicaragua is the only place in the world where sweet water sharks live. The ships that will sail the canal might cause a shortage of oxygen within the lake, and kill the unique sea lives that life in the lake (A Canal to Nowhere, 2015, 4 of 5). Gross calls out the president Ortega who in 2007 had said that he wouldn’t give up Lake Nicaragua, not even for all the gold in the world because of these environmental concerns. But roughly five years after Ortega said that he wouldn’t sacrifice Lake Nicaragua he signed the Nicaragua Canal Agreement. According to Gross Ortega said in 2012 that the agreement for a canal through Nicaragua is the only possible solution for Nicaragua to fight the high level poverty in the country. While he was previously worried about the canal going straight through Lake Nicaragua in 2012 he said that Lake Nicaragua was polluted anyways (Gross, 2014, 1024).

There are other concerns about the Agreement as well. According to van Royen the United States never wanted Ortega to become president of Nicaragua. For her article in the Dutch newspaper NRC van Royen quotes an open letter from Jeb Bush to the Nicaraguan people. Jeb Bush is a politician for the Republican Party and brother of former president George W. Bush Junior. In his letter Jeb Bush writes that Daniel Ortega is an enemy of all what the United States stands for. According to the article by van Royen the United States has taken multiple actions to prevent Daniel Ortega from being re-elected president in 2001. Elections that

(9)

eventually did loose. Van Royen states that resistance against Ortega dates back to the Cold War when Ortega’s left winged party was engulfed in a civil war against the, with the help of the Americans financed Contras. During this revolution tens of thousands of Nicaraguans died. It led America to decide on a trade embargo against Nicaragua and this, together with

different cons and scams of the Sandinistas, caused the Nicaraguan economy to collapse (van Royen, 2001, 1-2 of 5).

In 1984 the New York Times reported that anti-Sandinista rebels had placed mines in the ports of Nicaragua, two of which exploded in Managua, the capital of Nicaragua (Kinzer, 1984, 1-2 of 3). Church writes that in April of 1984 the news came out that the United States was involved in the mining of the Nicaraguan harbors. He says that this announcement didn’t struck as a surprise since the United States was the only one who knew how to place such mines. While there had been some form of consensus within the Congress on the

anti-Sandinista approach of the United States, the act of mining the harbor was seen as a war crime. At the time of the mining the United States had officially been at peace with Nicaragua

because even while the United States had placed Nicaragua on a trade embargo, there still had been diplomatic ties between the two (Church, 1985, 169-170).

Blank & Kim who have written an article on geopolitics between Russia and America for the journal: Problems of Post-Communism, discuss the history of the relationship between Russia and Latin America, and Russia and Nicaragua. They say that while the relation between Russia and Latin America is good at the moment this hasn’t always been the case in the past (Blank & Kim, 2015, 159). According to Blank, a Senior Fellow at the American Foreign Policy Council, Latin America has been very important to the Soviet Union during the Cold War, but when the Soviet Union fell apart in 1990 so did the diplomatic relationship between the two regions (Blank, 2014, 4). However, since recent years Moscow has regained interest in Latin America and started to invest in the region. Blank & Kim say about this that these investments aren’t just a strategic move, but are intended to challenge Washington. They say that it has become clear to Moscow in 2003 that a rapprochement with Washington wasn’t going to happen, and that has triggered Moscow’s interest in Latin America, especially in Nicaragua, Venezuela and Cuba (Blank & Kim, 2015, 160). Blank says Moscow is trying to weaken the influence that Washington and its allies and partners have in the Latin American area (Blank, 2014, 4). According to Blank & Kim Russia’s military involvement within the Nicaragua Canal Agreement shows that Moscow is interested in gaining a partnership or even an alliance with like-minded governments in Latin America, and is trying to gain a military

(10)

footprint within Latin America (Blank & Kim, 2015, 159). According to Dijck et al. Moscow wants to be involved in the project because it’s interested in strengthening its own political and economical ties within Latin America, and by cooperating in a project such as the construction of a canal through Nicaragua it would provide them a bigger foothold on the continent (Dijck, et al., 2015, 8).

These opening paragraphs served as an introduction to the Agreement: to introduce the actors involved in the Agreement, and to provide an insight on how the ties between the different actors involved have formed throughout the years. The aim of these paragraphs was to give an overview of the current situation and to provide a short background on the events that led to this current situation. But also on the many questions that have rose since it has become known that Ortega signed an agreement with investment company HKND. Based on the information presented in these paragraphs on the Agreement and the situation in Nicaragua, and from the knowledge gap(s) that originated from the Agreement the following research question has been constructed:

1.2 Research question:

To what extend can the military-strategic geopolitical implications of Russia and China’s infrastructural involvement in the Nicaragua Canal Agreement since 2007, be explained from a realist point of view?

The research question has been divided in 6 sub-questions, which will serve as guideline for the chapters to come:

1.3 Sub-questions

- What is realism?

- What previous attempts have been made to construct a canal through Nicaragua? - What are military-strategic geopolitical implications?

- What are China’s military-strategic geopolitical implications with the Agreement? - What are Russia’s military-strategic geopolitical implications with the Agreement? - What future scenarios can be developed with the help of structured analytic

(11)

Now the topic has been introduced and the research question and sub-questions have been presented it is of interest to explain why it is of importance to study this topic and why it is relevant to do so. In the following paragraphs it will become clear what the academic and societal relevance is of this research.

1.4 Academic relevance

At this moment research on the possible outcomes of the Agreement is lacking and that is why this researching is focused on trying to see if it is possible to, with the help of structured analysis techniques construct scenarios on the outcome of the Nicaragua canal agreement based on historical and current data. At the end of this research it will become clear if the theory of realism can be validated within the case study of the Nicaragua Canal Agreement. Can realism in combination with analytic techniques be used as model to provide an accurate prediction on the structures of international relations such as those within the Nicaragua Canal Agreement? If so, it might be possible to combine structured analysis techniques with the theory of realism as a method to obtain insights in other geopolitical cases in which

information is lacking or ambiguous as well. Thus providing a framework for future research.

1.5 Societal relevance

Why is this research of interest to society; that is what societal relevance stands for. The Nicaragua Canal Agreement can be seen as a struggle for power between different three major actors: the United States, Russia and China. The Nicaragua Canal Agreement is not so much about constructing a canal, as it is about China and Russia operating in the backyard of the United States together with long-time opponent of the United States, Daniel Ortega. This cooperation might bring back memories of when the former Soviet Union was operating in Latin America not even that long ago. Around the time of the Bay of Pigs (1961) and the Cuba Crisis (1962) people feared a new World War, and now there is once again a potential power struggle going on in Latin America. The main question that this thesis will try to provide an answer to on the societal level is; what can society expect from Chinese and Russian intervening in the backyard of the United States?

The paragraphs of the introduction chapter gave a quick insight in the Nicaragua Canal Agreement and the actors involved in the agreement. It has become clear that the Agreement is surrounded by uncertainties and questions. For example, why does a company with no expertise in the field believe that they can take on such an enormous canal project? And what

(12)

are the implications of Russia and China within the Agreement? The aim of the second chapter is to explain what the theory of realism holds, and how the interdependence theory opposes the theory of realism. Later on both theories will be used to construct scenarios on in order to gain a better understanding of the Agreement. The third chapter discusses the

previous attempts to constructing a canal through Nicaragua, but mostly focuses on the changes Nicaragua has gone through since it became independent from Spain in 1821, its rocky relationship with the United States and how this has resulted in the current situation. The fourth chapter first discusses what military-strategic geopolitical implications are, and then goes on to describe the military-strategic geopolitical implications of China of Russia within the Agreement. The fifth chapter starts with the question: what scenarios can be developed with the help of structured analytic techniques on the progress of the canal? And aims to answer this question with the help of the theory of realism and interdependence as discussed in chapter 2. The sixth chapter is a concluding chapter on the military-strategic geopolitical implication of China and Russia within the Agreement, and concludes on the final sub-question if the theory of realism is indeed the best option to analyse the Nicaragua Canal Agreement.

(13)

Chapter 2: Generating hypotheses

The question being answered in this chapter is: what is realism? Within this chapter the main concepts of the theory of realism will be discussed and applied to the Nicaragua Canal Agreement. In chapter 5 the theory of realism will be used to generate hypotheses on the development of the Agreement. Besides discussing the theory of realism this chapter will also discuss the interdependence theory. According to Paoletti some see interdependence as being opposite to realism (Paoletti, 2010, 217). By using two opposing theories a broad variety of hypotheses can be generated in chapter 5. But first: what is realism?

2.1 Theory of realism

“The strong do what they can and the weak suffer what they must” that is how Kratochwil explained the bigger ‘thought’ behind what realist believe international relations exists out of; a struggle for power in which the more powerful states dominate the smaller, less powerful ones (Kratochwil, 1993, 63). Within this research the theory of realism will be applied to the Nicaragua Canal Agreement to test if the theory of realism can be validated within this particular case study. Or if an opposing theory such as the interdependence theory is a better fit. According to Heuer a theory can be defined as a generalization of a certain phenomenon. A phenomenon turns into theory if, when a certain set of conditions occur, another set of conditions will most likely follow from that (Heuer, 1999, 34). By using the theory of realism on the Nicaragua Canal Agreement this research aims at providing alternative outcomes on why Chinese investment company HKND has come to an agreement with Nicaragua on the construction of a canal, and why Russia has been chosen to be responsible for military surveillance during constructions.

Why realism?

Walt says that realism is about the struggle for power between states that only think about them self. The reason that realism has been chosen as the theory to better understand the Nicaragua Canal Agreement is that although there are many thoughts and ideas on

international relations, Walt says realism is the most dominant one believing that conflicts are the dominant driver behind international relations. Since states have the desire to dominate each other, wars exist. According to Walt realism is the main thought of school for trying to grasp what went on during the Cold War because by interpreting the theory of realism it was possible to define the struggle for power between the United States and the Soviet Union (Walt, 1998, 31). The collapse of Soviet Union communism meant the end of the Cold War.

(14)

Crockatt says that the end of the Cold War has been a shifting point in history. He argues that the ending of the Cold War brought the rivalry between the United States and the former Soviet Union to an end, and with that a bipolar structure that had been around since the 1940s. But the collapse of Soviet Union communism, and the ending of the Cold War are not the only reasons behind the transformations that have been going on in the stage of international politics since 1989 (Crockatt, 2001, 93-94). Around the end of the Cold War the rivalry between the United States and Soviet Union might have come to an end, however a couple of decades later Russian intervening in Latin America has showed that the rivalry between the two has begun once again. According to Blank & Kim Russia didn’t show much interest in Latin America for a long time, but this changed when the relationship between Russia and the United States didn’t develop as the Russians wanted and they felt underappreciated by the United States. And around that time Russia started to shift focus towards the Latin America region in order to gain control in the continent at the cost of the United States. The Russian attitude within this situation can be defined as the concept of zero-sum game: one is gaining what the other one is losing. When the Agreement had been signed and it had become clear that Russia would be responsible for safeguarding constructions it once again showed

Moscow’s desire to cooperate with like-minded governments and leave a military mark on the backyard of the United States (Blank & Kim, 2015, 159).

Realism

Korab explains from a realist point of view and through the eyes one of the founding fathers of realism Thucydides, that when power is unrestrained it brings out the desire to gain even more power. Powerful states and powerful actors have the desire to expand their power he says (Korab, 2010, 3 of 18). According to Barnett & Duvall the concept of power is the main driver behind international relations (Barnett & Duvall, 2005, 39) and international relations are driven by political power and the desire of wanting to keep the peace according to Cox. Cox says that for many years the main focus within realism was on states, however practices have changed, and non-state actors have become involved in the practice of international relations. Due to this development there the diversity of goals pursued by the actors has increased. The involvement of non-state actors on all levels of politics deciding on the interrelationships between different states has complicated the means of communicating, and complicated the structures of the institutions in which decisions are being made (Cox, 1981, 126). Overall there are four main concepts of realism that can be identified. These four concepts will be discussed in the following paragraphs.

(15)

2.1.1 Main concepts of realism

The construction of the theory of realism is according to Dunne & Schmidt a reaction to idealism. Realism opposes the ideas, thoughts and concepts of idealism. They say that the outbreak of the Second World War brought the inadequacies of the theory of idealism, when applied to international politics, to light. Dunne & Schmidt say that realist find idealism to be unfit to understand international politics. Since the outbreak of the Second World War policy-makers and leading theorists are viewing the world through realists lenses. But how can one explain the realist view on international politics? Dunne & Schmidt say that realists have a skeptical way of looking at the world and the motivation people have for the actions they are performing. They are uncertain about the existence of universal moral principles. According to Dunne & Schmidt realist view the state as the unit of analysis: the state is their most important object of research (Dunne & Schmidt, 2001, 142-143). Donnelly says that realism theoretically formalises the ‘realpolitik’ statesmanship making it an important way of thinking in international relations theory. Although there are many ideas and thoughts within realism, there is one central thought that is the driver behind all ideas: power (Donnelly, 2005, 29-30). Realists believe that world politics is at all times a field of conflict because the actors within in it are always pursuing power and states do not trust each other (Dunne & Schmidt, 2005, 163). Overall there are four main concepts that can be defined within realism:

1. State as central actor 2. Political system is anarchic 3. Actors are rational

4. The fight is a zero-sum game

States as central actors

Glaser says the most important players within international relations are the states, not individuals, nor international organizations. He says that we shouldn’t expect the theory of realism to tell us much about the behaviour of non-state actors but it will tell us about the ‘relations and interactions’ of states and between states (Glaser, 2003, 407). According to Reilly, the director of International Studies: states might get influenced by non-state actors at times, but during times of crisis states can only rely on themselves (Reilly, 2003, 303).

(16)

Political system is anarchic

According to Walt the system of an international system is anarchic (Walt, 1998, 31). Dunne & Schmidt say that an anarchic political systems means that there is no supranational

authority that can enforce rules on the states and trust between different states is low (Dunne & Schmidt, 2005, 163). Reilly says about this that since there is no overarching authority over states, states do not have the guarantee of survival making states responsible for their own survival (Reilly, 2003, 303).

Actors are rational

Third concept of realism according to Donnelly is that actors operating within the political system are rational human beings: their actions are driven by self-interest, gaining power and conflict (Donnelly, 2005, 32). Reilly says that since survival is the main goal of states, and since survival is not guaranteed we do not even need to know what kind of type a state is, a democratic or authoritarian, we always know what they have to do to secure their position (Reilly, 2003, 303). They will do whatever it takes them to do to survive, that is their rationality.

The fight is a zero-sum game

The main goal of states is survival and for this their fight for power is a ‘zero-sum game’. What one state is gaining another one is loosing. And every single state has the desire for power for ensuring self-preservation. Even when states cooperate and work together they only do so to oppose other, greater, powers (Waltz, 2010, 70). According to Reilly states are obligated to self-help because it’s an anarchic system, and because states within this system cannot rely on non-state actors. The only ones fighting for the survival of the states are the states themselves. There is no room for morality there is only the desire for more power (Reilly, 2003, 303).

What is realism? Realism is a theory. And it’s the main school of thought when studying international relations. The theory of realism can be divided into four main concepts: the state is the central actor; the political system is anarchic; actors are rational; and the fight between actors is a zero-sum game. Realists believe that interrelationships are dominated by an ongoing struggle to obtain power in which smaller states are dominated by the bigger, more powerful ones. The four main concepts of realism are will be used in chapter 5 to construct hypotheses on the Nicaragua Canal Agreement. To test if the theory of realism can be

(17)

validated within this case and to come an answer to the question: to what extend can the military-strategic geopolitical implications of Russia and China’s infrastructural involvement in the Nicaragua Canal Agreement since 2007, be explained from a realist point of view?

2.2 Interdependence theory

To test if the theory of realism can also be applied to the Nicaragua Canal Agreement,

another, opposing theory will be discussed as well. If one of the two theories verifies the other one will falsify. It is expected that the theory of realism is the most accurate theory to describe the geopolitical implications of China and Russia within the Nicaragua Canal Agreement. However, is this really so?

De Wilde says that the concepts of the theory of interdependence oppose the concepts of realism. The theory of interdependence to him is about independent social actors who all want to remain independent, but who are structurally influenced by each other’s behaviour. All actors can operate on own interest he says, but they are dependent on each other for the outcome (Wilde de, 1991, 288). Rana, an assistant professor in international relations, says that the actors within the interdependence theory are competing as well as cooperating with one another. Rana continues to say that contrary to the theory of realism, in which is stated that the actors are always pursuing more power and where security is the main issues of the states, within interdependence theory “any issue-area might be at the top of the international at any particular time” (Rana, 2015, 291- 292). Rogerson identifies the characteristics of interdependence theory as (Rogerson, 2000, 421):

- A multiple number of actors, placing an emphasis on non-state actors - Multiple channels through which these actors interact in the system - A changing hierarchy of issues

- A decrease in the use of military force in interactions

Drawing from the interdependence theory it is to say that all actors involved are dependent on each other for the outcome. For that reason conflict between the actors involved is kept to a minimum and so is the use of military force. As opposed to striving for maximum interest, as is the case within the theory of realism, within the interdependence theory self-interest is overshadowed by the need to work together in order to achieve a goal. The theory of interdependence doesn’t view the states as main actors, but non-state actors.

(18)

In order for any of the actors involved to succeed and achieve their goal, a successful cooperation is necessary.

The aim of this chapter was to explain the theory of realism and introduce an opposing view to realism: interdependence. In chapter 5 both theories will be used to generate a broad variety of hypotheses on the actions and the intentions of the major players connected to the

Agreement. Both theories will be used because the aim of this research is not look for evidence to verify the theory of realism, but to see if it can be falsified. At the end of this research it might be concluded that the Nicaragua Canal Agreement can better be studied from an interdependence point of view instead of a realism point of view.

The next chapter will focus on the history of the Nicaragua Canal Agreement: since the sixteenth century there has been multiple initiatives to a Nicaragua Canal however, these initiatives never led to a canal, at least, not in Nicaragua. In 2012 this changed when HKND and Ortega signed an agreement, but how did this agreement come along?

(19)

Chapter 3: The Agreement

There has been previous attempts to construct a canal through Nicaragua, however these plans never came through. This chapter briefly discusses these previous attempts to come to an answer to the question: what previous attempts have been made to construct a canal through Nicaragua? And describes the development of Nicaragua since the point of independence, and how its rocky relationship with the United States has formed the mindset of the country. To understand with what state of mind Nicaragua has entered the Agreement in 2012.

Historical background of the Nicaragua Canal Agreement

By mid 16th century there were three transisthmian routes identified by Portuguese navigator, Antonio Galvao: through Mexico, Panama and Nicaragua. It wasn’t long after Galvao had identified these routes that the Spanish Crown capitalized a large portion of the rights over the potential isthmuses in Central America (Girot, 2002, 85). In 1821, after three centuries under Spanish rule Nicaragua became independent, but soon after gaining independence Nicaragua entered into a civil war between the Conservatives and the Liberals. This civil war would last for almost forty years (Close et al, 2012, 2). In the meantime the desire to construct a canal was still there. Around the time that Nicaragua gained independence of Spain, the British gained a monopolistic position on the sea-borne commerce. While most countries were restricted under the Protectionist policy Great Britain pursued a Free Trade policy and had the opportunity to expand its powers and dominate the sea powers (White, 1895, 724). In 1825 State Secretary at the time Henry Clay proposed the idea of a neutral canal in Central America that could be used by all nations and which wouldn’t be dominated by any of those nations. Clay opposed this idea to tone down British dominance within Central America (Rasp, 1969, vi), but his plan didn’t come through.

In 1849, while the civil war was still ongoing in the country, the republic of Nicaragua come to an agreement with an American organization existing out of, among others, Cornelius Vanderbilt and Joseph L. White. The agreement stated that the American syndicate would be given the rights to construct a canal through Nicaragua. The company had to pay for

constructions itself and should finish constructions within a timeframe of 12 years. Due to the agreement Nicaragua signed with the American syndicate Nicaragua gained the interests of many Americans, especially those from the state of California. William Walker, who had run a newspaper business in California until 1853, after which he tried to setup an ‘independent republic in Lower California’ but failed to so, was asked to come to Nicaragua to try an setup

(20)

an ‘independent republic’ over there. Where it was thought that he would have more success (Scroggs, 1905, 793-794). Walker invaded Nicaragua in 1855 and appointed himself president of the republic of Nicaragua in 1856. A variety of countries in Central America, especially Costa Rica, had been unpleased with Walker’s interference in the area, and when Walker wanted to invade other countries in the region as well, Central America setup its armies to fight Walker. When the armies of the Central American states ended Walker’s dictatorship, an era of rage and violence came to and end and a period of prosperity started for Nicaragua. The end of Walker’s dictatorship meant the beginning of thirty years of Conservative rule, brining peace and stability to Nicaragua. This period is also called: the Golden Age of Nicaragua. (Close, Puig & McConnel, 2012, 2).

In 1867, U.S. Minister to Nicaragua Andrew B. Dickinson and foreign minister of Nicaragua, Tomás Ayón, signed the Dickinson-Ayon treaty. Although this treaty didn’t provide the United States with exclusive rights on a canal through Nicaragua, it did give them the option on a route through Nicaragua (Pletcher, 1998, 123). At the same time the French started planning the construction of a canal through Panama: Ferdinand de Lesseps was in charge of the project (Girot, 2002, 87). Constructions started in 1882 but the project endured many, mostly financial problems Jones says, and Lesseps saw only one-way out: selling the canal-zone. In 1902, when the Spooner Act passed, the House of Representatives officially chose the Panama Canal over a canal through Nicaragua. The Panama Canal was sold to the

Americans and plans for the construction of a Nicaragua Canal were cancelled (Jones, 1990, 1 of 8). Liberal José Santos Zelaya López, who had come to power in Nicaragua in 1893 was angered by the United States choosing the Panama Canal over the Nicaragua Canal thus denying Nicaragua its long desired canal that he decided to offer the rights to construct a canal through Nicaragua to the Germans and the Japanese. While the Germans and the

Japanese denied the offer, the offer still led Zelaya López into conflict with Washington. This conflict meant the start of a new cycle of warfare that would last till 1927 during which the Washington financially backed up Zelaya’s Conservative and even his Liberal opponents (Close et al., 2012, 2). During Nicaragua’s conflict with the United States, the United States had its marines stationed in Nicaragua from 1910 until 1934. Nicaraguan Liberal, Augusto César Sandino fought against this American occupation in his country and denied the peace brokered to Nicaragua by Washington. Sandino fought against the marines and against the Nicaraguan National Guard, a military group that had been established by the United States. And Sandino didn’t end his fight until 1934, when the United States decided to withdraw its

(21)

troops from Nicaragua. In that year president at the time, Sacasa invited Sandino to meet him in Managua, but the National Guard executed Sandino on the orders of guard’s commander Anastasio Somoza García when Sandino was on his way to Managua to meet Sacasa. A few years later Somoza also expelled Sacasa and his family and he became president himself. Somoza presidency meant the start of more than forty years of dictatorship in Nicaragua. Somoza’s dictatorship was eventually brought to an end by a new guerilla force: the

Sandinista Party, named after Augusto César Sandino. The Sandinista Party was founded in 1961 and it took them from 1961 till 1979 before they were able to expel the Somoza family (Close et al., 2012, 2-3). It was the assassination of publisher Pedro Joaquín in 1978 that led to the break out of riots in the country and that was the spark that set in motion the

Nicaraguan Revolution. By June of the next year the FSNL drove the Somoza’s out of the country and by July of 1979 they rose to power (Close et al., 2012, 4).

While the United States had wanted Somoza to leave office they didn’t want the Sandinistas to rule Nicaragua. However, even after the Sandinistas rose to power president Carter did want to remain a friendly relationship between the United States and Nicaragua and offered money for foreign aid and to reconstruct the economy. But, the Carter administration did draw some conditions for Nicaragua in order to receive the money but when they found out that the Sandinistas were involved in the smuggling of arms to El Salvador aid was cut off

temporarily. When Reagan took over the Carter administration he decided on a permanent financial cut off for Nicaragua (Leogrande, 2010, 331). It was also under Reagan’s

administration that the Contras were funded and the CIA mined the harbors of Nicaragua (Church, 1985, 169). Reagan did everything he could to undermine the power of the Sandinistas. But it wasn’t long after the United States had cut Nicaragua off and started its operations against Nicaragua, that the former Soviet Union, Libya and Cuba started to financially support and provide technical aid to Nicaragua (Leogrande, 2010, 331).

Leogrande says that the United States has a history of trying to destabilize other governments, but the efforts taken by the United States against the government of Nicaragua stand out as being the “most intensive and long-lasting” (Leogrande, 2010, 329). The Sandinista party ruled Nicaragua from 1979 till 1990 and rules Nicaragua from 2007 until present day, and all this time the United States has been very determined to destroy the Sandinistas’ Revolution Party. When financing the Contras the United States didn’t care if by destroying the

(22)

The Nicaragua Canal has been called the Canal of failed dreams for a reason and the aim of this chapter was to describe the previous attempts that have been made to construct a canal through Nicaragua. From the sixteenth century upon there have been many attempts made to construct a canal through Nicaragua, but when the Americans chose Panama over Nicaragua to construct an interoceanic canal the Nicaraguans should have let go of their long-time dream. With liberal José Lantor Zelaya still pursuing his prolonged canal after Washington denied him the canal by offering the rights to the Germans and the Japanese, a lot of harm was done to the relationship with Washington. It was then that the United States started their most intensive and long-lasting attempt to destabilize another country by cutting of much needed aid, financing the Contras and by committing war-crimes such as mining the harbors. After Nicaragua knew that a companionship with the United States was out of the question it found it found a new friend in the Soviet Union. While its ties with the former Soviet Union

weakened after the Cold War ended, it has been re-established the last couple of years. And in 2012 Nicaragua found in HKND the one that would finally give the country its long-desired canal.

(23)

Chapter 4: The military-strategic geopolitical implications

International relations are often driven by geopolitics. Within the Nicaragua Canal Agreement Chinese investment company HKND is responsible for the construction of the canal and Russia will take care of safeguarding the canal during construction. While their role within the Agreement seems clear, reasoning from the theory of realism in which actors operate out of self-interest, China and Russia should be driven by what they are gaining from this

Agreement. According to the realist theory, states are driven by the desire to gain more power. The aim of this chapter is to identify the underlying goals of the Agreement. What are China and Russia’s implications with the Agreement? Are the states driven by the desire to gain more power? The first question that will be answered in this chapter is: what are strategic geopolitical implications? In the paragraphs that follow the military-strategic geopolitical implications of China and Russia will be identified.

4.1 What are Military-Strategic Geopolitical Implications?

According to Granieri we should try to understand geopolitics as the underlying forces of international relations. These relations are according to Granieri embedded in our history, geography and culture. By studying geopolitics we aim to understand why certain rivalries exist, and why conflicts between countries take place (Granieri, 2015, 429). According to Flint geopolitics is not only about why states want to control and compete for territory. Geopolitics to him is a lens through which we can see the world. Flint connects geopolitics to power and in order for states to obtain more power there is an ongoing struggle over spaces and places. Flint believes that the focus of geopolitics should be on gaining and obtaining power and on how states are struggling to keep control of their ‘spaces and places’, but also about achieving certain goals such as; having others follow your lead without force (Flint, 2006, 13, 28). As discussed in chapter 2 on the theory of realism, realists also place an emphasis on the struggle for power as main driver behind the actions of states. According to Jenkins there are debates about China’s geopolitical implications. Jenkins says that some view China to be a threat towards the sole superpower position the United States has gotten after the Cold War, and fear that this might lead to conflict in the future (Jenkins, 2010, 810). It seems as if the geopolitical implications of China are a zero-sum game; China is trying to expand its influence at the cost of the United States. Menon calls the close relationship between China and Russia a ‘strategic partnership’ (Menon, 2009, 99). Rangsimaporn says the relationship between Russia and China aims to counterweight the expanding powers of the United States (Rangsimaporn, 2006, 373). Russia has sold China billions worth of arms and

(24)

with Russia selling these arms to China: China has had the possibility to modernize its military. Menon also says that Beijing is very pleased with its modernized military because according to Menon China believes modernizing its military is essential if they want to cut-down the influence of the United States (Menon, 2009, 113).

Military-strategic geopolitical implications are: the use of military-strategic power in order to obtain certain goals and these goals are most often connected to the desire to obtain more power. Russia and China have expressed their desire of a multipolar world in which only a few great powers rule the world and for which the United States will lose its position as a sole superpower (Lo, 2004, 296). Within the coming two paragraphs the military-strategic

geopolitical implications of Russia and China within the Nicaragua Canal Agreement will be discussed in further detail.

4.2 China’s Military-Strategic Geopolitical Implications

At first it was important to understand what military-strategic geopolitical implications are and now this research will zoom in on the implications of China within the Agreement to provide an answer to the question: what are China’s military-strategic geopolitical implications with the agreement?

Lo says that in 1997 former president of Russia, Borin Yeltsin and his Chinese equivalent Jiang Zemin decided on a ‘partnership for the purpose of strategic interaction in the twenty-first century’. This partnership between Russia and China wasn’t only seen as challenging the national interests of the United States, but it also confirmed the creation of a new pre Cold War relationship between two like-minded; both want the world to be ruled by only a few great powers: a multipolar world (Lo, 2004, 296). According to Ellis the People’s Republic of China (PRC) returned to the world stage by expanding its political and economic weight at the beginning of the 21st century. Back in 1985 when Ortega was elected president of Nicaragua for the first time, he recognized the People’s Republic of China (Ellis, 2014, 41, 43).

Denoon says that China is trying to become a ‘global player’. According to Denoon Latin America hasn’t always been a priority to China’s foreign strategy but since China has become more economically engaged in the area at the beginning of the twenty-first century, so has its foreign strategy. Denoon sees the rise of China as a world power as a new influence to

(25)

due to China becoming a global power our thinking about geopolitics has changed. According to Denoon China’s rising influence is not so much a zero-sum game, as within the theory of realism, but more a ‘win-win’ cooperation: as described in the theory of interdependence (Denoon, 2017, 297).

4.3 Russia’s Military-Strategic Geopolitical Implications

The second major player within the Nicaragua Canal Agreement is Russia and therefor with them also rises the question what their intentions are: what are Russia’s military-strategic geopolitical implications with the Agreement? In other words, what is Russia gaining from being involved in the Agreement?

The Obama administration decided to withdraw its support to Latin America; funds to the region were scaled down and so was the United States military presence in the Americas. While the Obama administration was scaling back its presence in the Latin American region, Russia began to increase its presence in the area. Berman says that Russia has the desire to construct military bases in “eight foreign countries” with one of these eight countries being Nicaragua. Berman also says that the Kremlin has been working hard on re-establishing the close pre Cold War ties it had with Nicaragua. After Daniel Ortega was re-elected president of Nicaragua in 2007 Russia started investing in the country so Nicaragua could modernize its military power. Together they started a counter-narcotics operation that netted around 1.2 tons of cocaine in 2013. Besides that, Berman says that Russia is trying to exploit its economic opportunities in Latin America and that is why it wants to be part in the Nicaragua Canal Agreement. In recent years Russia has improved its capabilities to collect intelligence in the area and might use the project to expand its collection even further (Berman, 2014, 2-3). According to Blank the only reason that Russia is present in Latin America is because they are driven by an anti-American policy (Blank, 2014, 2). Fioretti wrote in article for the

Virginia Policy review in which she says that the Russians have already started shipping battle

tanks to Nicaragua, and started discussing the possibilities of a Russian airfield in Nicaragua. Fioretti believes that Russia is trying to increase its military presence in the country so that it can strengthen its position as a global power (Fioretti, 2017, 42).

When the United States started to withdraw its financial support and military presence in Latin America, Russia saw an opportunity to expand its military powers in the area. Russia goal seems clear: obtaining more power in the Latin American region. It seems as if together

(26)

with China, Russia is striving for a multipolar world in which a few great powers play a major role and in which the sole power position of the United States is toned down. But how will this friendship show itself in the Nicaragua Canal Agreement? What can be expected of Russian and Chinese influence in Nicaragua? What future scenarios can be developed on the Agreement? In the following chapter the future scenarios of the Nicaragua Canal Agreement on the progress of the canal will be constructed with the help of qualitative analysis

(27)

Chapter 5: Structured analytic techniques

This fifth chapter is an analytic chapter used to construct a prognosis on the outcome of the Agreement. The previous chapters formed an overview on the historical and current situation in Nicaragua: why Nicaragua is longing for a canal, what previous attempts have been made to come to an Agreement and how HKND became the company that would finally give Nicaragua its long desired canal. This chapter elaborates on the previous chapters and will, with the help of a variety of structured analytic techniques, try to come to a predicament on the development of the Agreement.

This first step in constructing a prognosis is by generating hypotheses. The in chapter 2 discussed concepts of the theory of realism and interdependence theory will be used to construct hypotheses on. Next to these two theories, the concept of situational logic will be introduced and used to construct ‘likely to happen’ hypotheses on the outcome of the

Agreement. The hypotheses will form the base for the second step in this chapter, the SWOT. The SWOT is used to make an inventory of all the powers in place, to gain an insight in the strengths, weaknesses, opportunities and threats China, Russia and the United States face by being directly or indirectly involved in the Agreement. China, Russia and the United States’ strengths, weaknesses, opportunities and threats will be put in a scheme, and this scheme will be used to identify the indicators and drivers from every actor. Following the SWOT is the hypotheses evaluation. During the hypotheses evaluation every constructed hypothesis will be evaluated to see if it can be falsified, validated or determine which information is needed in order to do see. Besides that, the impact and uncertainty of every hypothesis will be decided on. The hypotheses with the highest impact and uncertainty will form the critical unknowns in the paragraph on critical unknowns. The hypotheses with a medium high impact and a low uncertainty are the trends. These are phenomena that have already been identified as taking place right now. And lastly the Wild Card will be determined, which cause a paradigm shift.

All information will be put in a schema and will be later used to make an inventory of the powers in place and the drivers of the China, Russia and the United States. Besides that, a quick overview is provided on the short, medium long and long term cooperation and competition between China, Russia and the United States. The hypotheses evaluation that follows on the SWOT will provide an insight in which hypotheses can be falsified at that point, or what information is needed in order to do so. Next to that the likelihood of the hypotheses occurring, and the impact that will have they will have on the outcome of the. The

(28)

critical unknowns will be used to construct scenario’s on in the paragraph on scenario

building. Scenario building is the creation of a story around what drives China, Russia and the United States. With the help of scenario building a variety of possible scenarios on the

outcome of the Agreement is explored, and indicators are provided for one to recognize which scenario is playing when. The paragraph on scenario building will conclude by providing an answer to the final sub question: what future scenarios can be developed with the help of structured analytic techniques on the progress of the canal? The scenarios will be used for the final step in this analytic chapter: Analysis of Competing Hypotheses (ACH). The ACH will test the competing scenarios on inconsistency. Between the scenarios a clear division will show between the scenarios based on theory of realism and the scenarios constructed around interdependence. After filling in and analyzing the matrix the research question will be answered in the sixth and final chapter:

To what extend can the military-strategic geopolitical implications of Russia and China’s infrastructural involvement in the Nicaragua Canal Agreement since 2007, be explained from a realist point of view?

5.1. Generating hypotheses

There are many who have written about the Agreement, but unfortunately there is a lot of ambiguity within this data and for that reason it is important to generate a broad variety of hypotheses. Heuer says that people often do not explore all possibilities of creating

hypotheses and when hypotheses are poor, it’s difficult to come to the correct answer (Heuer, 1999, 96). This paragraph is dedicated to constructing hypotheses on concepts of realism, interdependence, and the yet to be introduced situational logic. This broad variety of

hypotheses will form the foundation for the techniques that follow. Throughout this chapter a clear division between realism and interdependence shows. Of one the two theories will be, step by step, falsified, while the other theory will not be falsified. The theory that does not gets falsified after all techniques have been applied, will show to be the best theory to explain the military-strategic geopolitical implications of China and Russia’s infrastructural

involvement in the Nicaragua Canal Agreement.

First hypotheses will be constructed based on the theory of realism: to see if the theory of realism will not be falsified when applied to the Nicaragua Canal Agreement. Besides that, hypotheses will be generated with the help of the opposing interdependence theory. And

(29)

finally the concept of situational logic will be introduced to draw the final ‘likely to happen’ hypotheses on. The concept of situational logic will be explained in further detail in the paragraphs to come.

5.1.1 Realism

As said in chapter 2, there are four main concepts that can be defined within realism. These four concepts form the base for the hypotheses that will be generated on the theory of realism.

1. State as central actor 2. Political system is anarchic 3. Actors are rational

4. The fight is a zero-sum game

5.1.1.1 State as central actor

One of the main concepts of realism is that the states are the central actors. Not to say that non-state actors do not play any role at all, but states are the central actors. Reilly says that while states might at times get influenced but non-state actors, in times of crisis they can only rely on themselves (Reilly, 2003, 303). The idea of a state being the main actor within a given situation will be applied to the case of the Nicaragua Canal Agreement.

Oppenheimer has written an article for the Miami Herald in which he states that Washington fears that the Chinese state is behind HKND in order to increase its presence within Latin America (Oppenheimer, 2017, 3 of 6). As discussed in chapter 2 realists believe that when power is unrestrained it brings out the desire to gain even more power (Korab, 2010, 3 of 18). Barnett & Duvall say that the concept of power is the main driver behind international

relations (Barnett & Duvall, 2005, 39). Yu says China has been trying to intensify its

relationship with Latin America since Xi Jinping has become president in March of 2013 (Yu, 2015, 1047). According to Yu China is trying to create a ‘China – Latin America community of common destiny’ by not only increasing its economic and diplomatic presence in Latin America, but also cooperating on a military level (Yu, 2015, 1063). Contipelli & Picciau say that even if the Chinese state isn’t the driving force behind investment company HKND, their influence within the Latin American will still grow and they will still receive influence on the new trade route (Contipelli & Picciau, 2015, 101).

(30)

Reasoning from the realistic concept that the state is the central actor the following hypothesis has been constructed:

- The Chinese state is in control of investment company HKND and the Nicaragua Canal Agreement because it wants to expand its economic, diplomatic and military presence in Latin America to increase its powers in the region

Necas says that according to the theory of realism the states are the main providers of national security and the best way to provide national security is by using military power (Necas, 2012, 24). Due to its part in the Canal Agreement Russia has gotten the opportunity to steer its military ships to Nicaragua and construct a military base. Reasoning from realistic concept that the state as central actor is responsible for safeguarding national security the following hypothesis has been constructed:

- Russia has chosen to be part of the Nicaragua Canal Agreement so it can expand its military powers to secure its own national security

5.1.1.2 An anarchic political system

An anarchic political system is a system with no higher authority than the states. A system in which the state is responsible for its own security: because there is no higher authority looking out for the survival of the state. Within the anarchic system conflicts can occur by choice, driven by those who are trying to expand their power. According to Cozette politics is in the end a never-ending struggle for power. Power can be envisioned as a relation in whom the actors are always trying to impose their will upon others and dominate them (Cozette, 2008, 688). Barnett & Duvall say that realists view power as the capability of states to get others to do what they want, things they would otherwise not do with the help of material sources (Barnett & Duvall, 2005, 40). What Barnett & Duvall have said can be applied to Russia’s involvement in the Agreement since Blank & Kim say that Russia at first wanted to befriend and cooperate with the United States, however when Moscow started to realize that this wasn’t going to happen they used their material sources to threaten the United States and its allies (Blank & Kim, 2015, 4). According to Berman Russia started to invest in a variety of countries in Latin America of which Nicaragua is one. By investing in these countries Russia tries to re-establish its close, pre Cold War ties (Berman, 2014, 3). Farah & Reyes say that Vladimir Putin, president of Russia has expressed his desire to make Russia a superpower

(31)

more than once. According to Farah & Reyes, Putin desires a multipolar world in which the United States loses its power dominance. In order to expel the United States from its sole power position Russia started to show interest in Latin America, which is “an area of vital interest to the United States” (Farah & Reyes, 2015, 102). When applying the realistic concept of the state as central actor on the Nicaragua Canal Agreement case the following hypotheses can be generated:

- Russia is involved in the Nicaragua Canal Agreement because it wants to expand its footprint within Latin America at the cost of the United States

- Russia wants to move towards a multipolar world in which the United States isn’t a dominant world power anymore and Russia becomes a superpower

For the last couple of years China has expanded its presence on the world market. In the timeframe of 1999 – 2004 China multiplied its import from Latin America with seven and has tripled its export towards the region. Not only has China’s import and export grown within Latin America, Chinese companies also started to invest in Latin America as well. Jenkins & Peters say that the increase of Chinese investments in Latin America is directly connected to increasing political interest of the Chinese government in the region. After former Chinese President Hu Jintao visited Latin America in 2004, and multiple Latin America leaders went to Beijing, Chinese investments in Latin America rose quickly. The interest of Chinese firms in Latin America is thus connected to its increasing political interest in the area and its changes to expand its market (Jenkins & Peters, 2007, 7).

− China uses the Nicaragua Canal Agreement to expand its export and import to the Latin America region to gain economic dominance on the world market

5.1.1.3 The rational player

According to realists, actors are rational. Mearsheimer has written about these rational actors that they are very aware of what is going on in their external environment and that they strategically think about how to survive within it. States consider how their behaviour will influence other states and how that might affect their strategy for survival. States do not only consider the immediate consequences of the actions they are performing, but also how their actions will play out on the long term (Mearsheimer, 2001, 31). According to the third concept of realism all actors are rational human beings whose actions are driven by their

(32)

desire to maximize self-interest also calling it ‘rational egoism’: self-interest is what makes an actor rational (Shaver, 1999, 7). Rational actors want to profit from their actions as opposed to irrational actors, who do not act in order to maximize self-interest. This third principle of realism is being applied to China, Russia and Ortega. In line with the hypothesis on the Chinese state trying to gain economic dominance on the world market the hypothesis of the rational actor is constructed. The rational actor only acts to increase its self-interest. The Chinese state maximizing self-interest, is connected to China trying to gain economic dominance on the world market. Due to the Nicaragua Canal Agreement China gets access and can influence a new trade route (Contipelli & Picciau, 2015, 101). Providing China the possibility to increase its import and export to and from the region. From this the following hypothesis can be deducted:

− The Chinese state uses investment company HKND as part of its overarching desire to gain economic dominance in Latin America

Over the last couple of years Russia has been working hard on improving its intelligence collecting capabilities. Russia’s involvement in the Agreement could be part of its

overarching desire to construct eight military bases in ‘foreign countries’, one of which is now located in Nicaragua thanks to their involvement in the Agreement (Berman, 2014, 2 of 3). This leads to the following hypothesis:

− Russia is involved in the Nicaragua Canal Agreement as part of its overarching desire to expand its intelligence gathering capabilities by constructing military bases in foreign countries under which Nicaragua

The motivations of Daniel Ortega behind the Agreement seem unclear. While Laubaugh acknowledges the possible positive outcomes of the canal on the Nicaraguan economy he also says that the one true winner of the Agreement is most probably Daniel Ortega. As the

construction of the Canal demands for hundreds of people to leave their houses and this has Amnesty International protesting against the canal (People’s rights for sale, 2017, 1 of 4), Lake Nicaragua possibly becoming contaminated and rainforests to become damaged, it seems questionable if there are people in Nicaragua, besides Ortega and his Sandinista Party, that will benefit of it (Laubaugh, 2014, 15).

(33)

− Ortega requested HKND to construct a canal through Nicaragua because he believes that he and his Sandinista Party will financially benefit from it

5.1.1.4 Zero-sum game

The fourth concept is that the fight for power is a zero-sum game. What one actor wins the other one looses. The gain and lose between the two is perfectly balanced. In the case of the Nicaragua Canal Agreement this would mean that why China and Russia are gaining, the United States is losing. As been discussed before, Washington fears that the Chinese state is behind HKND and that they are trying to gain power in Latin America at the cost of the United States. From the perspective that states are responsible for their own survival and in order to guarantee their survival they need to increase their power. Some say that Washington fears to lose power within Latin America on one of the multiple actors involved in the

Agreement. In order for them to improve their position within Latin America they might confine to counteractions to regain their power in the area. This leads to the following hypotheses:

- Due to the Nicaragua Canal Agreement and the increased interest of China and Russia in Latin America the United States fears that it will lose power within the region - The United States will take counteractions to secure its power position

To not only construct hypotheses that validate the theory of realism, the next paragraphs will focus on the theory of interdependence: a theory which some say opposes the theory of realism.

5.1.2 Interdependence theory

To also view the Agreement from an opposing position hypotheses will now be generated with the help of the interdependence theory in which actors’ actions aren’t only driven by competition and military power, but also by cooperation. The focus of theory of

interdependence, as discussed in chapter 2, is on:

1. A multiple number of actors, placing an emphasis on non-state actors 2. Multiple channels through which these actors interact in the system 3. A changing hierarchy of issues

In realism we trust? China and Russia’s rising influence in Latin America