A unified South America, the vision of Simon Bolivar, is what all 12 Heads of State of South America want; but not a unified South America solely based on economic and trade integration; why? That kind of integration mainly based on free trade and commercial aspects guarantees inequalities, poverty, and social exclusion; as the profit motive and large multinationals drive such type of integration.
The European Union (EU) is the model fast gaining acceptance for sculpting a unified South America, now referred to as the South American Community of Nations (SACN). This model will address the challenges of economic stagnation, inequality, and shocks from the human ecological interface; it will contain a strong social agenda that is more amenable to bringing economic growth and better standards of living through an equitable distribution of income, access to education, social cohesion and inclusivity, and environmental preservation.
And the Heads are feverishly pursuing the end-point of a unified South America. About a year ago, the Presidents selected their Emissaries to work on a High Level Strategic Reflection Commission; to produce a draft Reflection Document with the ‘unification’ details.
The High Level Commission already has had five Reflection Meetings: three in Montevideo, Uruguay; one in Buenos Aries, Argentina; and one in Caracas, Venezuela; with two working-group meetings, one in Caracas and one in Montevideo. The Vice-Foreign Ministers now are expected to consider this draft Reflection Document at a meeting this week from November 22-24, 2006 in Santiago, Chile. And the South American Heads of State will review this draft Reflection Document in Cochabamba, Bolivia on December 8-9, 2006.
Clearly, in crafting this integration model, the SACN must support an industrial policy that is technology-led and export-led. Jeffrey Sachs (2006) argues that Latin America lost technological capacity over the last 25 years; it failed to rise to the occasion when the technological revolution soared; it did not contribute to the rise of the electronic sector, the rise of biotechnology, and in the growth of information technology.
Sachs believes that the World Bank and the IMF use incorrect models for poor countries’ development; focusing excessively on market liberalization and stabilization, and less on industrial policy. Therefore, dependence, underdevelopment, and limited democracy may be at odds with an industrial policy formulation; further making poor regions less compatible for genuine integration and solidarity.
But Latin America has had a history of pursuing continental solidarity since Bolivar’s inter-American Congress of 1826, with numerous agreements; though with little success. Today, however, the Latin American story is different. Around 1985, the Region was largely under military rule; and limited democracy and measured underdevelopment; today, democracy reigns in South America; and this democracy together with the Region’s average middle income status, and center-left Governments, are significant preconditions for continental solidarity.
Likewise, according to DeLong (2005), removing harsh geographic barriers to continental trade and integration with appropriate technological and industrial infrastructure, would catapult South American integration to higher ground. Brazil’s Foreign Minister Celso Amorim explains thus: “North America has been an integrated continent since the 19th century. We have only recently begun this process ourselves. The Atlantic-Pacific gap, which doesn’t exist in North America, is dramatic in South America, because of the need to cross the Andes or the Amazon.”
In addressing this geographic discordance, Heads of State at the Cuzco Declaration in 2004 agreed to make available $4.2 Billion for the construction of 32 continental infrastructural projects over a 5-year period – pipelines, airports, highways, and telecommunications improvements, to facilitate trade over the difficult terrain.
In addition, the Cuzco Declaration activated the merger of the Southern Common Market (MERCOSUR) and the Andean Community of Nations (CAN), two massive trading groups; together CAN and MERCOSUR service a population of 360 million, a $1.3 Trillion GDP, and an export market of $181 Billion. The merger can only assist the integration process.
The pursuit of consensus for a SACN is fast taking shape. As recently as a week ago, Venezuela and Argentina successfully sold their $1 Billion worth of “Bonds of the South’; demand exceeded supply by 9:1, clearly demonstrating mass support for the financial development of the Region’s economies, and a move closer toward Latin American integration.
Other significant developments taking place amid the drive for a SACN include a growing discontent with the Washington Consensus through the creation of countervailing forces; examples are: Venezuela’s Bolivarian Alternative for the Americas (ALBA), strongly supported by social movements, and as a counter to the Free Trade Area of the Americas (FTAA); Brazil and Argentina’s Buenos Aires Consensus with a 22-point plan for South American integration; and Venezuela’s recent associate membership in the MERCOSUR is testimony to the importance of Venezuela for South American integration and the deep feelings of camaraderie shown to Venezuela’s Head of State by his counterparts, given the testing relationship between the U.S. and Venezuela.
For South American countries, the foreign debt of the 1980s, resulting in deep asymmetries among them, are tied to the multilateral institutions, as the World Bank, the IMF, etc., with their neo-liberal approach and conditionalities, all championed through the Washington Consensus.
The SACN hopes to achieve financial integration, to reach regional autonomy, and to free South American peoples from the stranglehold of the Washington Consensus. And the real meaning of South American integration is the integration of the peoples of South America; removing stagnation, inequality, and shocks from the human ecological interface, to give the people a better life.