UNASUR – South America gets Euro-Envy

This is just a little “who knew” note. It’s about things in South America.

To a Gringo Eye, it looks rather like a bit of Europe Envy. “Hey, THEY got a single European Parliament, WE ought to have one too!”. Basically buying into the hype that an integrated regional economy is a free pass to economic growth and wealth.

It isn’t. While it has some minor benefits in trade, there seem to be plenty of downsides that come along for the ride and consume any visible benefit. Or, put another way, Switzerland seems to be doing OK… and last I looked, Japan still made a lot of stuff that sold internationally. Oh, and New Zealand too… And…

So yeah, some guy selling coconut bras (don’t snicker! I’ve SEEN ’em!) faces a coconut import tariff for the country next door and pretty soon he’s talking to the guy there who wants to ship him a power tool (also with counter tariff) and they both end up talking to their politicos about a free trade zone. First thing you know, ‘integration’ is on everyone’s lips (as the politicos see how well the Euro-Politicos get staffed, wined, dined, partied, and generally don’t have to deal all those annoying elections and voters… )




NOTE: Mexico and Panama in light green are ‘observer status’, the dark green are signatories. Grey is something else…

Original Image

OK, it’s not just ME saying it’s modeled on the EU. From the wiki:

The Union of South American Nations (Dutch: Unie van Zuid-Amerikaanse Naties (About this sound pronunciation (help·info)) – UZAN, Portuguese: União de Nações Sul-Americanas – UNASUL, Spanish: Unión de Naciones Suramericanas – UNASUR) is an intergovernmental union integrating two existing customs unions: Mercosur and the Andean Community of Nations (CAN), as part of a continuing process of South American integration. It is modeled on the European Union.

The UNASUR Constitutive Treaty was signed on May 23, 2008, at the Third Summit of Heads of State, held in Brasília, Brazil. According to the Constitutive Treaty, the Union’s headquarters will be located in Quito, Ecuador. The South American Parliament will be located in Cochabamba, Bolivia, while the headquarters of its bank, the Bank of the South are located in Caracas, Venezuela.

The combined population of the 12-member Union as at 1 July 2010 was estimated at 396,391,032.

On 4 May 2010, at an extraordinary heads of state summit held in Campana, 75 km (47 mi) north of Buenos Aires, former Argentine President Néstor Kirchner was unanimously elected the first Secretary-General of UNASUR for a two-year term. This new office was conceived as a first step towards the establishment of a permanent bureaucratic body for the supranational union, eventually superseding Mercosur and CAN political bodies. On 1 December 2010, Uruguay became the ninth nation to ratify the UNASUR treaty, thus giving the union full legality.

As the Constitutive Treaty enters into force on 11 March 2011, UNASUR will become a legal entity during a meeting of Foreign Ministers in Mitad del Mundo, Ecuador, where they will lay the foundation stone for the Secretariat Headquarters.

So just as the EU is looking like an implosion in progress, South America gets started on their grand integration plan.

In all fairness, I think this one can actually work… though ‘why’ is a bit of an issue.

EU Stresses

A bit of a digression on the EU is in order. It has a couple of stresses in it that the UNASUR folks will not have.

First off, they have a zillion languages. Each new member state seems to bring 3 or 4 with it. So doing anything requires an N x N translation matrix AND all the relative ambiguities to be worked out. “Good luck with that”. They ought to have just picked a language for their proceedings and been done, or at least for their laws, but no… (Or heck, they could have assigned one language to each function so everyone got a part of the pie. Germans for financial laws and manufacturing. France for food laws and wine. Italy for clothing laws and marketing issues. Etc.) At any rate, they have a large structural strain based on the various disparate cultures and the way they don’t exactly translate.

There are dramatically different ideas in the EU about the sanctity of money value. We’re seeing that play out today as Germany and the North want strict discipline and sound money. The south want inflation to replace discipline and want ‘easy money’ preferably borrowed from folks who want to work for a living… This is just about tearing the monetary union apart at the moment as the Greek / Italian drama plays out. They’ve voted, sort of, for ‘austerity’. Now we get to see who wins as the population take a whack at their masters… German folks being tired of funding the Riviera Mentality of the south, the south not interested in German Austerity in their comfortable retirements…

There are other strains. Immigration pressures. Some folks not keen on, for example, French Arabs able to move anywhere and settle. Some folks wanting to import Turkey wholesale into the union. Others seeing that as their doom. (Greece experienced this once a few hundred years ago and is not keen on the idea redux … so maybe we’ll get Greece leaving and Turkey entering as the Germans seem to do well with a Turkish Connection … or have in a few wars.) But the rest of the strains are small compared to these big lumps.

Latin Unity

So what makes Latin America different from the EU?

Well, first off, they mostly speak the same or similar languages. Yes, a couple have colonial leftovers (like Dutch in Surinam) but pretty much if you live in the neighborhood, you can do OK in Spanish. Rather like California and Texas… Brazil is a large country with a non-Spanish language, but even it is largely mutually intelligible with just a bit of effort.

Culturally, there are many similarities as well. All have a colonial past. All feel like they’ve been ‘second tier’ with El Gringo pushing them around. All have a tendency to similar foods (yes, many differences too) and similar music. Yes, there are national difference, but it’s more like Canada vs The USA than it is like France vs Germany. The small bits vary, but the big picture is more alike than different.

Their economic views are also similar. All have an interest in exports to the rest of the world and imports from them, without much mutual competition. Many economies based om natural resources and agriculture. Only Brazil being a major manufacturer (and even then, with a large Ag and Resource base).

All have similar attitudes toward politics. They tend to a Socialist Model, by and large. Generally just swapping between the Fascist flavor of socialism, and the modern “European Socialist Democracy” model. (Occasional echos of the old Soviet Dogma are heard too.) Lip service to ‘democracy’ and the sporadic references to ‘republic’ are used mostly in a ceremonial role to mask that it’s largely, really, ‘strong man central planning’ they admire (the ‘republic’ cover) and with a populist bent (that ‘democracy’ part). So they can, likely, culturally integrate better than Europe. Many have had a legislature form that DOES make them a Republic, so will welcome being able to keep that smoke screen while having a supranational non-democratic non-republic Central Authority that can act as a less fettered Socialist Central Planner. I can see them being comfortable with that…

Not all rosy

There are some significant strains, still. For one, their ethnic mixes ARE variable. More Indios in some countries like Bolivia. More blacks in places like Guyana. But always embedded in a Hispanic dominated region.

Some times their political cycles are out of sync. One neighbor going for a Fascist style dictator while the next door country was just getting over it… (Chile and Argentina come to mind, though Brazil tried it once too, and Venezuela is giving it a go today). But as they integrate, their cycles will tend to converge, so this, too, ought to fade. But at first it will be a bit of an issue. In particular, notice that they are putting The Bank in Venezuela. What will happen if Hugo decides to raid the piggy bank?…

There is a bit of a risk that places like Ecuador, that have very high tariffs on imports, will have issues with a Brazil ‘inside’ their tariff zone; as compared to Ecuador, Brazil IS a manufacturing giant.

And finally, will a Colombia drug economy really be welcomed into the fold of all of South America? Time will tell… and dollars.

In Conclusion

It’s unclear how this will sort out. There’s a clear desire to “go there”. There’s a clear desire to put a higher level of regional integration in place, and have a supranational level of Central Government.

I can see it working for a while. There will be a variety of economic and cultural dislocations, but the integration ought to be fairly easily managed. Central Planning can, for a while, lead to greater economic output. (It is only later that the loss of freedoms, liberties, and creativity lead to stagnation and decay).

But eventually “there will be issues”. Will they be enough to pull it apart? Will Bolivians just ‘move in’ to the corridor to the sea that WAS Bolivia and is now Peru? Will Peru be “ok” with that? Will Hugo be OK with Narco Lords on the Colombian side not paying taxes into his bank? Will Ecuador be “ok” with Hugo not ‘sharing the wealth’ from his bank and his oil into their local social plans? Over time those stresses build up.

So the real question is this: How fast will the continent have ‘cultural integration’ sufficient to erase their sense of “Nation”? As the “Supranational” rules bite, and constrain them ever more, when will they be tired of that leash? If ever?

For now they are ‘going slow’. I suspect that The Frog is still a bit cold, so heat must be added gingerly at first… The EU problems will also be getting some attention, and leading to a slower bias.

I suggest keeping an eye on it. Probably a good 5 years before it’s going to amount to anything. I give it 10 to having issues. Before then we’re likely to have a transition in Venezuela (as cancer survival 10 years out is not so good), some rather large global economic problems (as the present set reach the inevitable end), a “China Puzzle” as they take over ever more of the economy of the world (including a lot of South American resources). Also about then we’ll have some large economic pressures in Latin America as their growing populations run head long into a colder world and more competition for resources (even their own resources…) from China and India.

So ‘no predictions yet’, but I’d be keeping an eye out for a Latin Problem in about 2025 or so. Perhaps with a China flavor, perhaps with a Socialism Collapse. More likely with a Growing Socialism Stagnation, to be followed by cultural squirming and economic discontents. That is, if we don’t have a nuclear war break out in The Middle East first ;-)

At any rate, the ‘treaty’ is now in force, and building are being built, foundations laid (for what, exactly?…) and the Jefes are busy cutting up the pie they hope to get Real Soon Now. It will be fun to watch, at least. While I wish them well, history is not on their side. Nor are current events, both in the EU and elsewhere.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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24 Responses to UNASUR – South America gets Euro-Envy

  1. dearieme says:

    Undoing the work of Bolivar, eh?

  2. larrygeiger says:

    Hi Chief

    Don’t want to hijack this thread or anything, but as to South America you did not mention the Catholic Church. Just saying.

  3. Of the countries of significance in the region, I’d put Brazil as the most culturally different, and Chile as the most politically different. This reflects in an interesting way: Almost all of the countries of South American spend time talking about their colonial past — almost like comparing surgical scars. But Chileans talk about the future — and their approach has often been good.

    Even the “fascist dictator” you mentioned wrote a constitution to transition from dictatorship to constitutional republic; perhaps this is a “first-and-only” in history for such a transition. Most Chileans have a pragmatic acceptance of Pinochet as a result, and an appreciation for capitalism that is quite different from other countries in the region. Just compare the feeling of Santiago (a bustling business-city that looks and feels rather like Los Angeles) to Lima, Peru — of similar size, but full of half-completed buildings (including government buildings) and evidence everywhere of dismal poverty.

    East-German-style socialism has struggled for dominance in Chile, and once in a while it succeeds (as was true between 1971 and 1973, when Allende got into office with 34% of the vote, splitting the two conservatives). The socialists make gains in the usual way: promising to tax the rich and give the government largess to the voters. But they tend to come to their senses. I have modest hopes for the current president; he certainly knows the value of free enterprise, though he’s had a lot of exposure to cronyism.

    Chile’s politics lives up to its motto — “By reason or by force” — and they jumped into UNASUR (and OECD) early, hoping perhaps to establish a controlling influence. When they are in free-enterprise mode, there’s no stronger, better growing economy in South America than Chile. Now if they could only stick to that mode, they’d be great.

    The South American countries have generally each had liberators — but none of them have a name like Chile’s liberator O’Higgins. They just had to be different.

    Perhaps UNASUR can be different from the EU as well, but considering the rampant corruption in the region (where asking a cop “do you speak English?” means “do you take bribes?”), I don’t expect much good from it.

    ===|==============/ Keith DeHavelle

  4. George says:

    Wow. This will allow the drug cartels to control the entire continent. They will have to buy off only one parliament in order to buy off the entire continent of South America. Before they had to pay off hundreds of politicians in dozens of countries.

  5. kuhnkat says:

    Like the Eurozone it is dominated by misedumucated Socialist leaning types. Like the Eurozone it will end badly. Sigh.

  6. E.M.Smith says:

    @Larry Geiger:

    “Catholic Church”… There, I mentioned it ;-)

    Anything else?

    (Yes, it’s a commonality. Yes, it’s got some socialist anti-capitalist central authority leanings. Is that causal of anything? Who knows if the church causes the society or the society causes the church… )

  7. As long as it is independent from the IMF and the UN it might stand a chance.
    Certainly being modelled on the EU is not a ‘positive’. (IMHO)

  8. Pascvaks says:

    Human Progress is a long slow slog up a snow and ice and mud covered high mountain slippery slope. I have little doubt that whatever comes we will prevail and achieve at least another meter or two in height over the next milenium or three. Has it occured to anyone else that there simply had to be more than one Eden? There are many worlds on this little speck of dust in the middle on nowhere. How about this one.. there were probably just as many “nations” (tribes) on the planet going into the last glacial period of the current Ice Age as there were coming out of it and present today after ~12,500 years, the only real difference is the “size” of those “nations”. Y’know, whoever created this place was a Supreme Joker.

  9. adolfogiurfa says:

    However there are two different economic systems: One succesful :Chile and Peru (open economies, free markets, free economy, both with free trade agreements with the USA, China and many other countries), high GDP growth, etc. and the leftist model, that of Chavez´s Venezuela, Brasil, Argentina, Bolivia,…., with closed to external markets economies.
    That naive UNASUR was really conceived as a tool for the propagation of the Chavez leftist revolution.

  10. adolfogiurfa says:

    May I make a forecast?: The 21st. century will see the failure and the end of the “French Revolution” and the abandonment of all those ideas which tried to alienate man from superior principles. Thus the artificial European union which really began with Napoleon´s invasion of europe countries with the purpose to abolish the previous order, will inevitably fail. Why?, because we are at the next “turn of the screw”and things will return to the previous state but in a new and higher turn.
    As for this UNASUR…..it´s already dead!

  11. H.R. says:

    Will it happen? If you watch futbol at all, I’d say they might have some trouble getting it together; nation first, continent second (or 3rd, or 4th).

    I also don’t see the populations trusting government; except to trust a larger government to do what’s always been done to “the little people.” Just an opinion but I think they’d all rather be “done to” by their own country rather than “done to” by a collection of countries.

    My $0.02 and i think I owe ya’ll some change.

  12. adolfogiurfa says:

    There were two times when south america was united: The first one, partially, under the rule of the Inca Empire, governed from Cuzco, Peru; the second one (which included all spanish speaking countries in SA) during the Viceroyalty of Peru, governed from Lima, Peru. The independence wars for the creation of the modern states were a conspiration of England with the help of the scottish branch of the masonic order. The afterwards “liberators” of the different countries were then young sons of prominent south american members of that order who sent them to be trained in war affairs in north Africa, then sent to the individual countries to promote “independence” from Spain and, obviously, dependence from anglo countries.
    Differently to the european case it must remain in the people the genetic memory of such a past. To reinforce such “independence” during the 20th century there were implemented political changes through various kinds of “revolutions”, which, among other things, deprived the ruling classes from their land properties by appliying “Land Reform”. The last one of these “tricks” is currently being applied in Venezuela, by Chavez´s “Social Revolution of the XXI century”; perhaps Chavez himself does not know about it, however, in the end, the goal is not allowing any country to be independent from the gracious government of the international elite.
    Thus, as today´s WS occupiers, all those “revolutionaries” were unconcious “useful servants”.

  13. oldtimer says:

    Tim Worstall has a characteristically succinct account of the eurozone pickle here:

  14. Pascvaks says:

    “One day, far far away, in a world of worlds on a speck of dust floating around an insignificant galexy, the people of two continents will speak a thousand variations of what were once called Germanic-Romance-Indian languages, and it’s doubtful that anyone will be any the wiser, or remember. Their blood will have a common characteristic. Their physical features will be fairly similar. If they are lucky, they will build great sailing ships before anyone else on the planet does and discover and claim new, undiscovered continents for their kings and queens. They will decimate millions with their kiss and the touch of their hands. They will seem as gods. They will distroy much and rename everything in their new worlds.”

    and the beat goes on… and on… and on… ;-)

  15. adolfogiurfa says:

    @Pascvaks (20:06:10) A “Brave New World”?, no, it doesn´t work that way!

  16. E.M.Smith says:

    So, Adolfo, who wins this newest revolution? The Chile / Peru side or the Chavez side?

    If they are all in bed in the UNASUR together, you know the struggle under the sheets is happening…

    Or perhaps Brazil being so large just comes to dominate everything…

    And if the breakup was as artificial as you assert, ought not the reintegration go easily? So why “UNASUR, it’s already dead”?

  17. Pascvaks says:

    Ref – adolfogiurfa (20:53:14) :
    @Pascvaks (20:06:10) A “Brave New World”?, no, it doesn´t work that way!

    No, just the same old, same old earth, let’s say after the next glacial cycle, when the shoe is on the other foot and the Western Hemisphere “discovers” and decimates, sorry, civilizes the continents of Eurasia, Africa, and Oceania. Seems only fair. I don’t think much, if anything, that is called “civilization” today will survive very far into another “ice age” cold cycle. Think maybe we all ought to chip in and build a great big pyarmid or something and seal in everything we know on CD-ROM’s for the far future? Maybe we should put it someplace away from water and ice? (Didn’t someone already try that the last time?;-)

  18. adolfogiurfa says:

    @E.M. There is no real union where so called trade agreements as Mercosur among closed tight markets like Brazil and Argentina with high customs tariffs, while Chile and Peru have almost no tariffs at all: It´s like oil and water. And you should consider, also, that there is a deep ideological division: Check the risk ratings of all SA countries and you will see how big the differences are. Some even allucinate in seeking for “fair commerce” (as if such a thing could ever exist).
    @Pascvaks :That´s different: Nature taking care of its chosen people. I told you “Brave New World” because your words reminded me of a “New World Order” with a blissful “Global Governance” by a transgenic Alpha elite of selected and cloned “Al Babies” :-)

  19. adolfogiurfa says:

    Nations, systems of government change not because of the will neither of the many nor of the few, but, as climate, because of changes in that shiny variable star above us. The late Timo Niroma on this subject:

  20. Pingback: Cyclemania and the Cycles Of Life « Musings from the Chiefio

  21. Joel Heinrich says:

    People that call a two-party system democracy really shouldn’t be judging other nations’ political systems.

  22. @Joel Heinrich:
    As an aside, the United States (where many of us here live) is a constitutional republic rather than a democracy. But it sounds as if you would exclude certain people from being able to offer comment — which folks did you have in mind?

    ===|==============/ Keith DeHavelle

  23. Pascvaks says:

    @ Joel Heinrich (18:58:49)
    Americans, Brits, Irish, Scots, Germans, Italians, Franks, Spanish, Dutch, Swiss, Austrians, Ozies, Vietnamese, Indonesians, Filipinos, Japanese, Russians, Croats, Indians, Mongols, Arabs, Turks, and a few hundred others on this spec of dust do it all the time. I’m sorry, what planet are you from?

    PS for Off-Worlders: There are usually just two primary parties in the various worlds that make up this planet, the “Ins” and the “Outs”.

  24. E.M.Smith says:

    I’d often wondered why the Greeks had put “democracy” in the “bad forms of government” (ever since a high school teacher had so informed the class, then spent a few minutes fumbling around for why they were wrong…)

    I’m now more clue-full, and quite happy to have a limited party REPUBLIC rather than a democracy. I just hope the Democrats do not succeed in their ongoing quest to make us ‘more democratic’ as that is a ‘bad system’…

    Also, just for the record, this blog is a “Benign Monarchy”, and not a republic nor a democracy, so the only one who decides who gets to judge things here is me… but I’m usually willing to listen to folks opinions… (other than carping…) So yes, this citizen of this REPUBLIC is quite happy to say you can have a two party democracy. It just won’t work very well ;-)

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