Tough times for Latin America as integration efforts falter due to ideology

May 10, 2006


When the Summit at Iguau last week was over, a talkative Hugo
Chavez, (what else is new?) hailed the meeting, said it was wonderful and that
the pharanoic mega pipeline would now include Bolivia.

But
somehow that is not what apparently happened, as press reports tell us that Lula
told Chavez
not to meddle so much in South American affairs and that he was
endangering the gas pipeline project with his intromissions.  The Venezuelan Foreign Ministry claims
to be surprised
by this reaction, while none other than Evo Morales says
that he will try to save the Andean trade pact while in Europe.
Morales meanwhile is now being accused of being himself a puppet of Chavez, as he
is criticized
for flying in a Venezuelan plane to Europe and Morales tries
to distance himself from the Venezuelan President. But it is hard to do as his
Minister of Energy confirms that PDVSA employees helped with the
nationalization decree, Morales says expropriation of large states is next,
then a Constituent Assembly and you bring Chavez to a Summit where he has
little role to play other than defend you from the ire of Lula and Kirchner.

Of course,
all of these problems are supposedly being caused by the right wing Brazilian oligarchs
like Celso Amorin and Marco Aurelio Garcia, Chavez’ allies two yaers ago, who are now at the center stage of criticism
in their own countries because essentially Lula had his thunder and leadership stolen
by Chavez.

The result
of all this is that Lula is looking North more than ever, as he realizes he can
not count on his supposedly ideological partners to go along with him, Uruguay is mad at Argentina, Peruvian candidates
now all attack Chavez, Lopez Obrador seems to be losing not first place but
now even second place in the Mexican Presidential race tahnks to Chavez and the President of Guatemala tells
Chavez
not to meddle, even before he has.

All in all
not a very good week for someone that wants to be the leader of this southern
hemisphere. A lot of the work Chavez had done regionally to integrate was lost
this week because of the style Venezuelans have seen in the last seven years: confrontation,
intolerance and ignoring others opinions.

This is in
the end bad for the whole region. The world is becoming highly connected and if
we can not connect with our most natural trading partners, we all lose in the
end. Chavez difficulty is that he truly believes that free trade is bad, while
the rest of the region has come to recognize that free trade is the way out of
poverty for many of these countries. Moreover, he wants to impose his point of
view, the way he did on the CAN, later on Mercosur, then with the G-3 and
helping Morales make decisions that have created a rift between his country and
his natural (and only!) clients.

So far
only Argentinean President Kirchner has yet to distance himself publicly from
Chavez. Maybe he can not yet afford to, given the largesse of the Chavez
Government in purchasing that countrys debt in the last year, no questions
asked.

The only
question is what will be the next step. Lula is facing an election, while his
own country is beginning to doubt his ability to lead the country
internationally. Mexican, Peruvian and Colombian politicians distance
themselves from the Venezuelan President, who has an election in eight months
that will likely push him into radical positions that many neighbors will not like. The
US
seems to have no clue as to how to play this game, other than do little or fumble even when they try to do something.  

Unfortunately,
all of these countries continue to benefit from the world commodities boom,
which hides many of their structural problems and lack of competitiveness. Decisions are delayed, conflicts are avoided and important opportunities
are being missed as the more radical left interferes with the traditional one
to slow down progress in trade within then region. Integration efforst falter simply because of ideology, the same ill that has affected the region for decades.  In the end, the people are hurt as the economies if their countries d not grow as fast as they need to, while other areas of the world, such as Asia and Eastern Europe continue to make strides in solving those same problems with pragmatism.

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