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Banco Del Sur - A Reality Check On The State Of South American Relations

(Dec. 12, 2007) The signing of the "founding act" of the new Banco del Sur raises so many questions that it is difficult to know where to begin. Set against the backdrop of the assumption of Cristina Fernandez de Kirchner in Buenos Aires, Argentina, the meeting highlighted the continued difficulties South America faces as it attempts to form a continent wide union. As reported in the BBC, Brazilian President Lula da Silva called the founding of the bank a "decisive step" towards the integration of South America; Venezuelan President Hugo Chávez called it a "political reality that forms part of an economic and social war;" and Bolivian President Evo Morales said it brings "new hope" to a region struggling to combat poverty. The problem as we see it is that while these statements may be accurate on a hypothetical level, they completely miss the mark when it comes to describing the actual reality of regional relations. As much as Brazil would like …

President Proposes National Recall Vote As Bolivia Slides Further Into Chaos

(Dec. 6, 2007) Violent protests continue to rock Bolivia as politicians refuse to compromise on a new national constitution. President Evo Morales has proposed a national recall vote for himself and the country's nine prefects to help end protests that began after his political party Movement Toward Socialism (MAS) railroaded a new draft constitution through the National Assembly on Nov. 24. Opposition leaders dismissed the recall proposal as a smoke screen and asked the president to return the nation to the rule of law.Speaking out against the president, Leopoldo Fernández, the Prefect of Prando said, "The issue does not depend on whether or not [President Morales] submits to a recall vote, but that he returns the nation to the rule of law and stops abusing his powers."The conflict's roots lie in the 500 years of tense relations between Bolivia's highland indigenous populations, predominantly ethnic Quechua and Aymara, and the descendants of European immigrants,…

21st Century Socialists Turn Tables On Opposition

(Nov. 30, 2007) Without delay, Ecuador's new Constitutional Assembly approved President Rafael Correa's proposal to close the national congress until the assembly concludes its broad reorganization of the state in what officials are calling a "Citizen Revolution."

Ecuador is the third South American country to call a Constitutional Assembly this century, joining Venezuela and Bolivia in their social revolutions that promise to put citizens back in control of their countries. Decades of poor management and weak political institutions have robbed the traditional political elite of their legitimacy, leading to the sweeping victories of President Correa, Venezuela's President Chávez and Bolivia's President Morales.

Although this "Troika" of so-called 21st century Socialists was elected with the majority support of their respective citizens, each faces an entrenched opposition that questions the democratic nature of the constitutional reforms proposed by t…

Is South America Sliding Into Chaos Or Is It Just Business As Usual?

(Nov. 28, 2007) For anyone interested in the state of South America's regional relations, this week was full of news. Argentina and Uruguay appear to have given up on political dialogue and have closed their borders until The Hague gives them a reply sometime in the next 2 years, Venezuela froze ties with Colombia and recalled its ambassador, and Peru announced it will file a formal complaint with the Hague over its southern maritime border with Chile. While none of these events is a real surprise, their combined effect, along with the internal conflicts currently playing out in other South American countries, is striking. Our question is whether these flash points are representative of the region as a whole or whether they are merely isolated incidents between ships of state at sea. The conflict between Argentina and Uruguay is not new. Argentinean protestors have been intermittently closing the border for two years and now Uruguay is beginning to do the same from its side. Eve…

Bolivian Assembly Approves Constitution In Irregular Session

(Nov. 26, 2007) Last Friday Bolivian President Evo Morales and his MAS party in the National Assembly approved constitutional changes by a simple majority vote in an irregular session without the presence of opposition parties. According to the former Vice President Victor Hugo Cádenas the meeting took place in a military barracks in Sucre where 136 of the 255 total representatives - all supporters of Morales - met to approve the final draft of the new national constitution, while outside protesters literally took over the city. By the end of the weekend the entire police force of the Sucre, Bolivia's second capital, had retreated, leaving control of the city in citizens' hands. Morales claims that his MAS party has a popular mandate to reform and that Friday's actions will be vindicated after the reform passes in the referendum vote. However, according to Cádenas this mandate within the Assembly is actually 50.7 to 49.3 percent, or a mandate of 1.4 percent. This narrow …

Venezuelan Police Shoot Students Protesting Chávez's Constitutional Reforms

(Nov. 25, 2007) Riot police shot a group of students from the Universidad Monteávila on Friday for handing out pamphlets protesting the upcoming constitutional referendum in Venezuela. El Observador Online reported that eight students were wounded in the attack.Police firing small pellets and tear gas forced students to seek protection inside their university. The police then tried to force their way onto the university campus through a hole in a fence but were driven back by students yelling at them that they were breaking the law. Police are not allowed onto university campuses in Venezuela.On Nov.2 two students were killed and four injured after a similar protest, five days later masked pro-Chávez supporters attacked a group of students protesting the proposed Constitutional referendum resulting in two gunshot wounds and seven other injuries.Student groups from all over the country met in Caracas on Saturday to continue the protests. Students from 40 different schools wrote protest…

Argentina Breaks With Venezuela Over Free Trade And Middle East

(Nov. 24, 2007) Argentina's President Elect Cristina Kirchner distanced herself from the political agenda of Venezuela President Chávez on Monday by proposing a Mercosur-Israel free trade agreement (FTA) during her visit to Brazil. The proposal is a diplomatic counter punch to Venezuela's open support for Iran's President Mahmoud Ahmadinejad at the OPEC meeting in Saudi Arabia last week. The proposal was greeted by Brazilian President Lula Da Silva and will be presented officially by Kirchner at the Mercosur reunion of heads of state in Montevideo, Uruguay in December. The announcement was also a signal that Chávez would not control the political agenda of Mercosur if Venezuela is accepted as a member, as seems increasingly probable after Brazil's Senate voted yes to Venezuela's petition to join the union. During the Senate debate it was noted that Chávez would do less damage inside the group than outside of it. That the proposal was announced by Kirchner in Braz…

South American Border Wars Slow Regional Integration

Guyana Foreign Minister Rudolph Insanally announced a temporary truce on Wednesday after Venezuela’s military blew up two Guyanese mining boats on a river near the international border. The attack took place on Nov. 15th and was part of a three day military operation, called Tepuy, to remove illegal miners from the Cuyuni River basin.

Although Venezuela has promised it can provide coordinates that prove the attack took place in their territory, it was agreed to postpone an official declaration until Venezuela’s Foreign Minister Nicolás Maduro returns from a trip to Europe. The delay will also give both nations more time to complete their analysis of the event.

Guyana is also waiting for a response over an unauthorized Venezuelan military incursion in Guyana last year that left one Guyanese citizen dead. Foreign Minister Maduro promised to provide information in this case last March during a press conference at the Rio Summit but so far no report has been released.

The history of the disp…

The Other Iberoamerican Summit

Besides the now famous spat between President Chavez and King Juan Carlos and the evil empire bashing of the People's Alternate Summit, what actually happened at the Iberoamerican Summit that took place in Santiago last week? Why did the leaders of 33 countries go to so much trouble to meet together for three days of intensive reunions in Chile? Leaving aside the drama, the intended theme was social cohesion. The choice was made by Chile in its capacity as the host of the summit and is a clear reflection of the priorities of the Bachelet administration's emphasis on long-term social planning. The concrete fruit of the reunion were eleven documents; a declaration, a plan of action, and nine special communiqués. The combined focus of these documents can be reduced to five categories; human development, economic development, the environment, defense and security, and political dialogue. Human development received the most attention, specially emphasizing the role of the region&…

What Does Peru's FTA Mean For The Rest Of The Region?

U.S. newspapers announced this week that Congress is expected to ratify a free trade agreement (FTA) with Peru before its Nov. recess. The FTA will eliminate 80 percent of U.S. export tariffs to Peru with the remaining 20 percent to be phased out over the next 10 years. While U.S. lawmakers argued over the inclusion of labor and environmental provisions, no comment was made about the impact the FTA will have on regional integration efforts in South America. When Peru began trade talks with the U.S. in 2006 both Colombia and Ecuador were also in the process of negotiating bilateral FTAs. Many worried that these agreements would undermine the goals of the Andean Community (CAN). Bolivian President Evo Morales expressed this bluntly when he said, "These treaties are destroying the Andean Community," accusing the countries of abandoning the principle of regional solidarity by negotiating individually instead of as a group. Ultimately the decision to pursue these FTAs led to Ve…

Some Initial Questions: Unasur And Integration In South America

In South American integration literature there exists a puzzling divide between primary government sources and secondary analysis. On the one hand you have a series of regional declarations signed by the 12 presidents of South American nations stating their intent to form a new continental block. On the other hand you have a public that remains largely unconvinced and skeptical of the union's long-term chances of success. The fundamental question seems to boil down to whether or not the nations of South America can overcome their traditional conflicts to achieve the goals of the new union. While a review of the government generated literature is overwhelmingly positive, a similar review of non-governmental literature is at best neutral. Why is there such a difference between the two observed positions?It is our opinion that regional integration in South America is, at its most basic level, a reaction to the demands of the changing world order. It is a process remarkably similar to…

Why Are People Worried About Constitutional Reforms in Venezuela?

(Oct. 30, 2007) Are the constitutional reforms to be voted on in December a threat to Venezuela's democracy, and if so, what implications does this have for the region?

In a strong statement denouncing the proposed constitutional reforms a number of influential academic and social academies have recently spoken out against President Hugo Chávez's proposed constitutional reforms calling them illegitimate and undemocratic. The controversy centers on two fronts, the institutional process and the proposed reform to presidential term limits.

The issue of institutional process revolves around the 2005 national assembly elections in which government opposition parties refused to participate in what they called unfair elections. The opposition said that it did not believe the national electoral council (CNE) could offer the necessary guarantees to ensure free and fair voting. Their refusal to participate effectively handed total control to the president and his allied political parties …

Banco del Sur Postpones Signing Until December

Venezuelan Foreign Affairs Minister, Nicolás Maduro, announced that the Nov. 3 meeting of the Banco del Sur will be postponed until Dec. 5th. Brazil, Bolivia, Colombia, Ecuador, Paraguay, Uruguay and Venezuela were supposed to have met next week to sign on as members of the new regional bank. No reasons were given for the postponement.

The Banco del Sur was launched on Feb. 21, 2007 as a bilateral agreement between Venezuela and Argentina, with the hopes that other South American nations would soon join on. The support of the six countries is expected to inject much needed capital into the project. According to El Comercio Ecuador, the bank will have a startup capital of US$7 billion dollars to be used principally for regional development projects.

English-language news sites often refer to the bank as a populist initiative of Venezuelan President Hugo Chávez, implying that it is not a serious project. While it is true that the bank seeks to replace Washington-based lending agencies lik…

BRAZIL ANNOUNCES NEW OIL EXPLORATION IN AMAZON

This week Brazil announced it is seeking approval to explore for new oil and gas reserves near the Jurua River in the Amazonian state of Acre. The government will set aside US$35.5 million for the National Petroleum Agency (ANP) to begin exploration, while the Acre State Industrial Federation has promised to raise US$15 million. Officials cited the economic benefits the project will bring to a neglected part of the country but raised concerns among local and international environmental groups who worry that the exploration will damage sensitive ecosystems. Commenting on the proposed project, Environmental Ministry Executive Secretary, Joao Paulo Capobianco, is reported as saying, "It's necessary to examine how this will be done, on what scale and in what areas. In theory, there are methodologies and technologies that allow this activity without environmental damage." For his part, Acre Congressman Marcelo Serafim said that, "development brings damage, it destroyed t…

ENVIRONMENTAL TERRORISTS AT LARGE IN DEVELOPED COUNTRIES

Ecuador's President Rafael Correa is full of good ideas this week. On his visit to Italy this week he is reported to have proposed that the UN publish a list of environmental terrorists whose reckless actions are putting the world in danger. He also agreed to let the US maintain its military base in Manta, if the US is willing to allow Ecuador to build a base inside the US. If sovereignty isn't the issue, he asks, what's the problem?

The two statements simultaneously show off his environmental credentials while sticking it to Uncle Sam at the same time. Correa is on tour winning the hearts and minds of Europe by taking communion and criticizing the US. What better combination?

It would all the more meaningful if Correa would ask for a list of the environmental terrorists whose reckless actions are putting Ecuador at risk or look at how his own actions are destabilizing Ecuador's economy, scaring off much needed foreign investment.

On the environmental front, Ecuador'…

BRAZIL PROPOSES FREE TRADE AGREEMENT WITH INDIA AND SOUTH AFRICA

Brazilian President Luiz Inácio Lula da Silva proposed the creation of a trilateral free trade agreement (FTA) between India, South Africa, and the nations of Mercosur at a reunion in Pretoria, South Africa on Wednesday Oct.17th.

The proposed treaty would create the world's largest free trade area and has been billed as a way to reduce these countries' dependence on developed nations. It would also create a strong political and economic block that would use its influence to push for greater UN reforms and more concessions from developed countries in international economic forums like the World Trade Organization (WTO).

The announcement came as a surprise in South America where several regional FTAs are currently dying of neglect. Mercosur itself has been unable to agree on common trade issues within its own borders or with its proverbial neighbor the Andean Community (CAN) next door. A total free trade area between CAN and Mercosur was supposed to have occurred by 2002, tops, bu…

CHILE DEBATES ESTABLISHMENT OF WORLD'S LARGEST WHALE SANCTUARY

Valparaiso, Oct. 16 - Environmentalists and politicians met Tuesday in Valparaiso to discuss the creation of the world's largest whale sanctuary. Representatives from 15 non-governmental organizations across Latin America presented the project to Chile's Senate Environmental Commission with the hopes of receiving governmental approval before the upcoming 60th annual meeting of the International Whaling Commission (IWC) in Santiago on the 27th and 28th of June 2008.

"The goal of these meetings is to strengthen the determination of Latin America's civic organizations to seek out solutions to the environmental threats whales face," said Diego Taboada, director of the Whale Conservation Institute of Argentina, one of the sponsors of the event.

The Commission seemed supportive of the project but asked representatives to propose concrete steps for Congress to take to move forward with the plan.

Beatriz Bugeda, director of the International Fund for Animal Welfare in Latin…

SOUTH AMERICAN GAS PIPELINE WILL CONNECT CARIBBEAN WITH PACIFIC OCEAN

The presidents of Colombia, Venezuela, and Ecuador announced Friday Oct. 12th that new Ballenas-Maraciabo international pipeline will be extended across Colombia to create the first transoceanic pipeline on the continent. Speaking at the inauguration Friday, President Chavez said that plans were ready to connect the pipeline with Central America and the Andean countries of Ecuador, Peru, and Bolivia. The announcement names the city of Popayán in southwestern Colombia as the pipeline's next destination where it will then be extended south to the Ecuadorian border city of Tulcán, in the highlands of Ecuador's central valley. President Chavez also announced plans to connect the pipeline with Panama and from there head north into Central America, expanding the Union of South American Nation's (Unasur) plans to create a regional energy grid to supply the continents increasing energy needs. Energy shortages are already affecting the southern cone where natural gas shortages in…

SCIENTISTS WORRY ABOUT THE HUMAN AND ENVIRONMENTAL COST OF INTEGRATION

The environmental cost of increased infrastructure integration in South America was the topic of debate at the First Latin American Congress of National Parks and Other Protected Areas this week in Bariloche, Argentina. Scientists from around the world met to discuss the effects of the proposed Initiative for the Integration of the Regional Infrastructure of South America (IIRSA), the new vehicle for improving physical connections between nations of South America.

Tim Killeen, a senior scientist at Conservation International, presented a paper at the meeting entitled "A Perfect Storm in the Amazon Wilderness: Development and Conservation in the Context of IIRSA." According to Killeen, "Failure to foresee the full impact of IIRSA investments, particularly in the context of climate change and global markets, could lead to a perfect storm of environmental destruction. At stake are the greatest tropical wilderness area on the planet and the multiple benefits it provides.&quo…

URIBE AND CHAVEZ INVITE CORREA TO LAUNCHING OF NEW PIPELINE

Ecuadorian President Rafael Correa was invited by Colombia and Venezuela to attend an upcoming meeting between their two presidents, Alvaro Uribe and Hugo Chavez to celebrate the opening of the new gas pipeline in the Colombian District of LaGuajira that connects the city of Ballenas with the Venezuelan city of Maracaibo.

The Colombian Foreign Minister Fernando Araújo gave an interview on Caracol Radio in Bogota where he said that "some think that this pipeline could be the seed for the construction of a second pipeline that would connect with Ecuador and, possibly, it could be extended to Peru and Bolivia in line with the greater energy integration that Venezuela has been promoting for some time."

The new pipeline to be opened on Friday Oct. 12 is 177 km (110 miles) and cost more than US$150 million to build. The proposed pipeline to Ecuador would require at least 12,00 km (800 miles) of pipeline to be constructed in a sensitive rain forest environment with the danger of guer…

South America Announces New Banco del Sur

Brazil and Ecuador gave a combined press conference today announcing their intentions of joining the Banco del Sur, a new regional financial institution created by Venezuelan President Hugo Chavez on Feb. 21, 2007 to replace institutions like the IMF and World Bank.

The announcements come one week before a Brazilian sponsored summit in Rio de Janeiro where representatives from Venezuela, Ecuador, Bolivia, Uruguay, Brasil, Paraguay, Argentina and Chile as an observer.

Amorim announced at the press conference that he was "pretty sure, because of conversations I have had recently, that we are going to reach an agreement" and that at the Foreign Ministers reunion in Rio we can expect "a foundational agreement that will decide statutes at a later date."

So far only Venezuela, Argentina, Bolivia, Brazil, Ecuador, and Paraguay have announced their intention of joining the Bank which means that all eyes will be on Uruguay and Chile to see what their reaction to Monday's m…

UNASUR MAKING VERY SMALL WAVES

On Oct.4 Brazil's Foreign Minister Celso Amorim arrived in Ecuador to discuss potential areas of mutual interest with President Rafael Correa. The visit followed last Sunday's national assembly elections that gave President Correa sweeping powers move forward his new socialist platform designed to reduce economic inequality and exploitation in Ecuador.

The visit was also a chance for the minister to talk with Correa about his announcement that Ecuador will now collect 99 percent of price windfalls on Ecuadorean oil, up from the 50 percent previously collected. Although Brazilian President Lula da Silva's Worker's Party is sympathetic to the current situation in Ecuador, the announcement imposes new extra-contractual conditions on Brazil's national petroleum company Petrobras, one of the largest producers in Ecuador and undermines the perceived rule of law in Ecuador.

A third reason for Amorim visit last week was to meet with Rodrigo Borja, former president of Ecuador…

ECUADOR VOTES FOR NEW CONSTITUTIONAL ASSEMBLY

Ecuadorian President Rafael Correa's party appears to have won a sweeping victory in the new constitutional assembly on Sept. 30th giving his party, Acuerdo País (AP), broad powers to transform the nation's legal system. According to unofficial exit polls the AP won 87.5 percent of the vote, with former President Lucio Gutierrez's Sociedad Patriotica coming in second with 18.9 percent of the vote.

"We are open to dialogue and a national agreement to build a 21st century Ecuador, not a 19th century Ecuador where oligarchic multimillionaires don't pay taxes," said Gustavo Larrea, spokesman for the government.

However many fear that the assembly will remove existing political checks on the executive branch by dismissing the national congress. In what may be a sign of things to come, Correa invoked the famous Argentinean protest chant of "out with them all" when speaking to a crowd of supporters Sunday night.

The Constitutional Assembly has sparked bitter …

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