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Working Plan
1. The travails of the Organization of American States (OAS & OEA)
2. The ALCA (FTAA) that never was3. MERCOSUR 4. Still alive: The Andean Community (CAN)5. America without the North Americans: UNASUR6. ALBA (and it mutations) 7. A new organizations
The good
• Vibrant democracies (with some few exceptions)
• Rapid recovery from the global crisis: 4% in 2010 after -2.3% contraction in 2009 (flexible foreign exchange regimes & countercyclical fiscal stimulus)
The bad
• Economic growth still dependent on commodity prices & exports (weak internal demand): few sources of revenue
• Widespread inequality: the higher income concentration in the world (5% of population gets 25% of income; 30% receives 7.5%)
• Concentration of output: Brazil & Mexico 2/3 of total!
The ugly
• The return of the strong-man rule: Venezuela, Nicaragua, Ecuador, Honduras (almost) & Argentina (an open question)
• Drug trafficking & widespread corruption• Crime in the rise: 36 murders/100.000
habitants (US: 12 & Canada 2.5)
The urgent business
1. Investing in high-quality education & innovation2. Stop borrowing? 3. Abandoning the export-led economic model?4. Fighting corruption?5. Finding new sources of revenue (widening their
tax base) or reducing overdependence on a single export commodity?
6. Strengthening the protection of property rights?
INNOVATION IN L.A2009-10 2008-09
Costa Rica 41 48
Chile 42 39
Brazil 68 50
Mexico 69 61
Argentina 75 60
Colombia 90 75
Venezuela 124 101
Steady decline:
–Fiasco in the Honduras crisis (2009)–Helpless before a divided continent–Tried to recast itself as the backbone
of the Free Trade Area of the Americas (FTAA or ALCA)
• Launched by Messrs Bush,Sr & Clinton to unite the entire continent (34 countries) in a free trade area by January 2005
• Collapsed in 2003 & buried in 2005• Why? Brazilian & Venezuela the main
suspects ….
• Divided by crisis and quarrels (Argentina vs. Uruguay; Argentina vs Brazil; Paraguay against everybody)
• Brazil the uncaring giant on its new role as BRIC country even courting Iran.
• Membership application of Venezuela: stranded in the no-man land
• UNASUR as the future?
• Exhausted model: incapable of reaching the custom union level
• Eroded by politics & political factions (Evo Morales of Bolivia & Correa of Ecuador)
• Replaced by bilateralism?• Waiting to be digested by UNASUR?
MEMBERS
Venezuela, Cuba, Bolivia, Nicaragua, Dominica, Honduras (?), Ecuador, San Vincent & the Grenadines, Antigua & Barbuda.
INSTRUMENTS & ACHIEVEMENTS
• People´s Trade Agreements …..• None except by the ALBA Bank & Petrocaribe
(selling Venezuelan oil under credit: 40%; 60% 25 years)
HISTORY
• Born in 2004 as the Community of South American Nations (under the European model)
• In 2008 morphed in the South American Nations Union (UNASUR)
What for?
• Grandiose plans: oil pipelines; highways, etc• Achievements: a stage to vent grievances over
the US-Colombian Military Agreement (2009) but defused the Bolivian crisis
• The real objective: to foster Brazilian regional hegemony excluding Mexico?
AND FINALLY ….
• The Community of Latin American & Caribbean States
• Born in Mexico (February 2010)• Founded by 32 states
My conclusions (or questions)
• Is it possible to integrate in the region without (or against) the US?
• Will all these new organizations lead anywhere? To an Europe-style integration?
• Does regionalism foster economic development?
• In the deep bottom: can you trade without the old model (capitalism, private sector, private investment, private banks)?