GaudÃ­n, AndrÃ©s

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University of New MexicoUNM Digital RepositoryNotiSur Latin America Digital Beat (LADB)9-2-2011UNASUR Members Work Together to KeepGlobal Economic Crisis at BayAndrÃ©s GaudÃnFollow this and additional works at: https://digitalrepository.unm.edu/notisurThis Article is brought to you for free and open access by the Latin America Digital Beat (LADB) at UNM Digital Repository. It has been accepted forinclusion in NotiSur by an authorized administrator of UNM Digital Repository. For more information, please contact amywinter@unm.edu.Recommended CitationGaudÃn, AndrÃ©s. "UNASUR Members Work Together to Keep Global Economic Crisis at Bay." (2011).https://digitalrepository.unm.edu/notisur/13992LADB Article Id:  078290ISSN:  1060-4189©2011  The University of New Mexico,Latin American & Iberian Institute.All rights reserved. Page 1 of 3UNASUR Members Work Together to Keep GlobalEconomic Crisis at Bayby Andrés GaudínCategory/Department:  RegionPublished:  Friday, September 2, 2011With the certainty that, sooner or later, the crisis that is punishing the North—Europe and the US—will arrive at their doorstep, the 12 countries of the Unión de Naciones Suramericanas (UNASUR)decided to act in unison, quickly, to implement measures to protect their economies. The piecesbegan to fall into place on July 29, in Brasilia, when Argentine President Cristina Fernández deKirchner and her host Brazilian President Dilma Rousseff agreed that "we are a very temptingregion for the rest of the world, so we must develop an intelligent integration strategy to fortify theregion, not to isolate ourselves."On Aug. 5 the economy and finance ministers, meeting in Lima, took the next step when they madeprogress in fomenting regional productive and financial integration as well as in possibly workingtogether to control the impact of capital flight.In the third step, on Aug. 12, in Buenos Aires, the ministers of economy and finance—this timeaccompanied by the presidents of the central banks—gave shape to the ideas and decided topromote a South American reserve fund, shore up the regional currencies to "de-dollarize" tradeamong the group's member countries, incentivize intraregional trade, strengthen the CorporaciónAndina de Fomento (CAF), and accelerate the launching of the Banco del Sur.Finally, on Aug. 24, the foreign ministers, meeting once again in Buenos Aires, gave their politicalsupport to everything the technical people had come up with. In two months, four specializedteams must define the characteristics of each of those tools so that, at a summit in late October inAsunción, Paraguay, the heads of state of the 12 member countries can sign the agreement thatcould well be called "Accord Against the Region's Extreme Vulnerability."UNASUR moves beyond political issuesSince UNASUR's inception in 2007, its actions were focused on the political sphere. Mediation inthe open conflict in August 2010 between Colombia and Venezuela (Colombia had complained thatVenezuela was protecting and training Colombian guerrilla groups) and the emergency presidentialsummit in October 2010 to support Ecuadoran democracy after the failed coup attempt are themost notable milestones (NotiSur, Oct. 15, 2010). Therefore, analysts see the presidents' decision topromote coordinated economic policies as a major step toward broader integration."On a continent accustomed to divisions and rivalries, designing a common strategy is historicpolitically. Beyond the diversity of thought, there is a strong impression to create of common path.South America can become one of the engines of the international economy," said ArgentineEconomy Minister Amado Boudou.Venezuela's Foreign Minister Nicolás Maduro was equally satisfied. "This is the first time in 200years that South America is meeting to talk about economics. It is a historic event; in another erathe International Monetary Fund (IMF) would have already arrived with its structural adjustmentLADB Article Id:  078290ISSN:  1060-4189©2011  The University of New Mexico,Latin American & Iberian Institute.All rights reserved. Page 2 of 3programs. We are breaking the bonds of neoliberalism," he said before the approving nods from hisBolivian and Ecuadoran counterparts.The first outcome of this round of meetings was the formation of an economic council (ConsejoSuramericano de Economía y Finanzas), an entity outlined by the ministers and the presidentsof the 12 national central banks—those of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador,Guyana, Paraguay, Peru, Suriname, Uruguay, and Venezuela—but already backed politically by theforeign ministers. In addition, the economic arm of UNASUR decided to promote a Latin Americanreserve fund, strengthen the use of regional currencies to de-dollarize trade among UNASURmembers, generate incentives for intraregional trade, strengthen the CAF—considered a type ofLatin American development bank—and speed up the opening of the Banco del Sur, formed in 2009to finance the development of UNASUR countries, although it has not yet begun operating.When the time came to explain the decisions, Brazil's Treasury Minister Guido Mantega was briefbut precise. "The objective is to reduce external vulnerability and galvanize development processesamid a deepening crisis," he said.At the Lima meeting, the ministers had sent a clear message to the economic world: UNASURwants to ensure that the blows from the crisis and the international uncertainty will not halt thesustained economic growth that the region is experiencing. To maintain those levels of productionand employment are the two greatest concerns."Hard part will be implementing decisions"UNASUR took another large political step, exceeding everything done in the past by any otherregional organization," wrote an analyst for the Argentine daily . The writer added that UNASURwould have to show that it has the ability to put the action plan against the crisis into practice andgo beyond mere declarations. And it must also overcome not only the contradictions in the diverseviewpoints of the various countries of the region but also those within some of the participatingcountries, as was observed in the disparity between what some presidents said in the days prior tothis round of meetings and what their representatives said later.Colombia is the most obvious case. During the first meeting in Buenos Aires, its delegates causedone of the tensest moments, when its Banco Central technical experts objected to a point in the jointcommuniqué referring to the creation of a reserve fund, arguing that "by law, Colombia will beunable to participate in this entity."The majority of participants saw the Colombian bankers' position as the maximum expression ofneoliberalism that prevails in many central banks. The position contradicted that of the financeminister, who had the full support of President Juan Manuel Santos. Colombia was, also atthe behest of its bankers, the country that best demonstrated the differences within UNASUR.When Venezuela and Ecuador insisted that the foreign ministers' final statement include thecharacterization of the present situation as "a world capitalism crisis," Colombia defended using thephrase "a financial crisis." As UNASUR decisions are made by consensus and by majority, the issuewas debated but it did not get too nasty.In the four meetings, the delegations agreed that it is the region as a whole and not just each countryindividually that can be affected by the crisis if they do not act quickly, if the region is not fortified,as Fernández de Kirchner and Rousseff said at their Brazil meeting.LADB Article Id:  078290ISSN:  1060-4189©2011  The University of New Mexico,Latin American & Iberian Institute.All rights reserved. Page 3 of 3Economist Jorge Marchini, one of the drafters of the documents approved in Buenos Aires, saidthat Brazil is the most telling example of that. "It is no longer managed as a BRIC country [referringto the group of Brazil, Russia, India, and China] but as one more country within the region," saidMarchini. "Brazil finally understood that there is no contradiction in assuming a world profile asan emerging power, fighting for a place in that arena, and at the same time recognizing itself aspart of a region with various peculiarities in the face of the crisis. Including that it has had the besteconomic performance in these years of imbalances and losses of leadership, but at the same time itcould be left more exposed to an invasion of speculative capital."One might ask what changed, after so many years of misunderstandings, for the 12 countries withsuch different profiles to seat their ministers and monetary authorities at the same table to discussa common plan of action. The region is exposed to a crisis, and the South American leadershipchanged its mentality, in part as a result of the fears of a crisis. Leaving aside the political debate, thetechnical teams will now have to flesh out the proposals. Doing so will not be easy.The compensation mechanisms with local currencies for intraregional trade can perhaps advanceslowly; it is likely that the Banco del Sur will be redesigned; and the use of international reserveswill continue meeting resistance. But the discussion is open and, according to Boudou, "despite thequestions and doubts, there is a great certainty that we all share: the crisis will be prolonged and ismenacing, and the need to create defense instruments is urgent."The UNASUR countries, most of which suffered the brunt of the neoliberal experiment of the 1990sand thus have first-hand experience with the consequences of the medicine the IMF has prescribedto the broken economies of the North, have united to develop joint responses to a crisis that they didnot create but that can harm them if they do not react in time.-- End --

UNASUR Members Work Together to Keep Global Economic Crisis at Bay

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UNASUR Members Work Together to Keep Global Economic Crisis at Bay

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