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…
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.
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.
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.
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.