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

By Miguel Octavio

11.05.06 | When the Summit at Iguaçu 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 years 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 thanks 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 country’s 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 the 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 do 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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