How many bananas is a surface-to-air missile system worth? That absurd question was at the heart of a standoff with major implications for security in Ukraine and Ecuador last month, and the outcome foreshadows how global competition among great powers may play out in Latin America moving forward.
Both Ukraine and Ecuador are at war, but those two wars look quite different. Ukraine is fending off a military invasion from its much larger neighbor, Russia. The fighting includes elements of conventional and trench warfare, as well as the use of significant air assets, missiles, rockets and drones by both sides, at times to strike civilian targets and infrastructure.
Ecuador is combating gangs that threaten stability from within. President Daniel Noboa declared the country to be in a state of internal armed conflict in January amid an eruption of gang violence. He tasked the military with targeting organized criminal structures that have made the country among the most violent in Latin America. The security situation has improved in recent weeks, with thousands detained since the start of the crackdown, but the costs of the military mobilization and detentions are significant, raising questions about the effort’s sustainability. Additionally, despite the detentions of many alleged low-level gang members, the leadership structures of most of the biggest gangs remain in place, biding their time and continuing to target prosecutors who investigate crime too deeply.
The differences between the two wars mean they require different strategies, tactics and—importantly—weapons systems. Ecuador’s old Soviet-made surface-to-air missile systems are essentially useless in its combat against gangs, but those systems could be quite valuable for Ukraine. Ecuador’s other Soviet-era military hardware, including helicopters, would similarly be a boon to Ukraine, whose military is familiar with them, while Ecuador would benefit by upgrading its fleet.
The problem is that Ecuador is not in a position to simply donate its military to hardware to Ukraine. This is where the U.S. comes into the picture.
With Republicans in the U.S. Congress holding up military aid to Ukraine, as well as the rest of the federal budget, the administration of U.S. President Joe Biden has searched the globe for mismatched security systems, like the ones in Ecuador, to find win-win deals that could provide Ukraine the military support it needs, while giving allies more modern defense capabilities that would be more useful for the challenges they face. The Biden team offered a deal to Ecuador that seemed to benefit everyone: Ecuador would provide its Soviet and Russian weapons systems to the U.S., which would then ship them to Ukraine, where the military could immediately deploy them. In exchange, Ecuador would receive $200 million worth of military equipment from the U.S. that would be better suited to addressing its own internal security situation, as well as additional security support and cooperation from Washington.
Unfortunately for Kyiv and Quito, Russia responded to that potential arms transfer by restricting banana imports from Ecuador and threatening to halt them altogether. Many analysts wondered why the U.S. didn’t just offer to buy the bananas from Ecuador to make up the losses if Russia carried through on its threat. The answer is that Russia buys $800 million dollars of bananas per year from Ecuador, representing 20-25 percent of the country’s banana exports and about 0.7 percent of its GDP. That’s substantially greater than a single $200 million military equipment transfer. As an added wrinkle, the Noboa family is one of Ecuador’s top banana producers, meaning Russia’s threat was targeting not just the country’s economic wellbeing, but the president’s wealth as well.
Within days of the Russian restrictions on Ecuadoran bananas, Noboa backed down, saying he never intended for Ecuador’s military hardware to be involved in a complicated international conflict like Ukraine. Putin then reversed the restrictions on banana imports. Ecuador’s economy escaped any significant damage. But Ukraine still lacks the weapons it needs, and Ecuador will now have a harder time upgrading its own security gear to combat the country’s gangs.
If Russia was able to quash the Ecuador-Ukraine arms transfer by leveraging a few hundred million dollars in bananas, China will have little difficulty keeping Latin America in line if it ever invades Taiwan.
Russia’s swift threat against Ecuador’s banana industry foreshadows what will likely occur if China ever invades Taiwan. China has much larger trade relationships with many Latin American countries than Russia, and it will use its economic leverage over them to ensure no government provides diplomatic, economic or military support to Taiwan. The region’s soy, pork, oil and copper sectors are all much larger than Ecuador’s banana exports, and China can target all of them for economic coercion and retribution in a future great power struggle. And the story doesn’t end with commodities. Latin America is also reliant on Chinese cell phones, infrastructure investments and vehicles as well. If Russia was able to exert its influence leveraging a few hundred million dollars in bananas, China will have little difficulty keeping the region in line.
The U.S. should resist the urge to place similar pressure on Latin American governments to get them to back Washington’s objectives. Banning or restricting products to convince Latin American governments to support geopolitical goals is a brute force solution that won’t make many friends. Beyond that, Ecuador’s security push deserves U.S. support despite the setback on the military aid for Ukraine, especially given the role that domestic demand for cocaine in the U.S. plays in fueling and funding Ecuador’s conflict. While the Ecuador-Ukraine deal would have been an elegant solution to the current funding challenges Biden is facing in Washington, the U.S. would be better served by getting its act together in Congress and passing assistance for both countries.
Meanwhile, Latin American governments should be concerned about what this incident means for their geopolitical independence. Russia’s move amounted to a form of economic sanctions, even if Moscow claimed the banana restrictions were a health issue. And it was quite effective: Russia used economic coercion to get Ecuador to change its policy within a matter of days, while potentially damaging Quito’s security efforts. In other words, the controversy was about sovereignty and self-defense as much as it was about bananas.
Nevertheless, countries in the region that have spent decades complaining about U.S. sanctions on Cuba didn’t say a word. If Latin America doesn’t learn from this episode, the region will find itself vulnerable to much larger forms of economic coercion over the coming decade.
James Bosworth is the founder of Hxagon, a firm that does political risk analysis and bespoke research in emerging and frontier markets. He has two decades of experience analyzing politics, economics and security in Latin America and the Caribbean.