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[Column] Adhemar S. Mineiro: The current crisis and alternatives: A Latin-American point of view and necessity of regionalism, part II |
Adhemar S. Mineiro, senior economist, Departamento Intersindical de Estatísticas e Estudos Sócio-Econômicos (DIEESE), Brazil |
Part two of this speech was presented on the state of the global economy one year later together with Professor Walden Bello on the virtues of deglobalization and lessons for South Korea at a forum organized by the New Community Institute and held at the National Assembly in Seoul, South Korea, Oct. 10.
Some words on the Brazilian situation
When signs of the current global economic crises began to show up more sharply, Brazil had many positive aspects that could be identified in its economic situation that provided the basis for its capacity to deal with the crisis. First, an accumulation of more than 200 billion dollars by the Brazilian Central Bank in the former period operated as an instrument of protection against capital flows and speculation. Second, despite liberal reforms during the 1990's, Brazil maintained the most important parts of its state-owned financial sector (Banco do Brasil financing enterprises and agriculture, Caixa Economica Federal financing housing and the build of infra-structure, and BNDES as a national development bank), energy enterprises (Petrobras for oil and Eletrobras for electricity), and significant public funds. Public funds and enterprises have been used to support investments, national (and in some cases regional) productive chains, and Brazilian international trade, as well as poverty alleviation policies and support for unemployed workers.
Very high interest rates, maintained by the Brazilian Central Bank on several occasions as consequences of inflation target policies, and a very tight fiscal policy operated by the Ministry of Finance limited space for monetary and fiscal expansionist policies at the moment of the crisis. At the same time, policies related to expand mass consumption as income transference policies and the policy to raise progressive minimum wage and popular credit incentives were maintained and reinforced. Moreover, rather than on the adoption of new adjustment programs and policies, the main debate, at the end of last year, was on development, and a new policy to sustainable economic growth. This ended up being very critical in facilitating a political environment for Brazilian government policies that could deal with the global economic crisis, make possible a quick official answer to the situation, and help explain the success until now of the Brazilian capacity to recover quickly.
One of the main issues in Latin America, and particularly in South America, in recent years has been regionalism. And this has been in relation to both the political and the economic agenda. There is a kind of a perception that the countries of the region can gain more than they might lose by participating in processes of political and economic integration, even though many problems persist. The fact is we have at this moment many instances that can exemplify a motivation pushing towards regional integration and can demonstrate the idea of regionalism that has taken hold in the region at this moment. Perhaps this new perception could be explained by the common resistance of many of the countries of the region against the FTAA proposal, or the appeal of concrete proposals to work together, as in the case of forming the Banco del Sur (Bank of the South), a financial institution of Mercosur countries with the cooperation of the ALBA countries. Another example can be found in cooperating to create a system of collective security in South America.
Although there is also great support for coming up with national solutions, most of the time national solutions are articulated with the idea of regional integration. The general idea is “globalization” lead by trade and financial interests and liberal hegemony failed somehow in providing opportunities for countries in the region to achieve sustainable economic growth and improve social patterns. The first tendency was to move for national alternatives, and this idea is still very strong, as democratic power is defined institutionally at the national level and governance is stronger also at that level. However, national alternatives have been limited by scarcity of some resources necessary for development at the national level, and the perception that those resources can be obtained by some complementarities that exist in the chain of resources necessary to development among countries in the region. Besides, there is also a consolidated evaluation that South America’s countries can have significant synergies operating together in the international diplomatic arena, although (or because) there is no clear leadership defined among them.
Regional integration is seen as a possibility of escaping a kind of regional “curse,” the integration in the international markets by the production of primary products (agro and mineral commodities). It is known that the production of those products is normally intensive in area, natural resources and aggression to environment, while also contributes in drafting a society where power and income tends to be concentrated.
The idea of regional integration is also well evaluated by popular forces in the region. The long period of struggling against policies based on the principles of financial and trade liberalization created close links among different forces and social movements within the region. In this process the idea of a people oriented integration, based on a common project to fulfill the needs of the majority of South America population, the decentralization and regionalization of economic productive chains, the widespread extension of citizenship rights, an environmentally sustainable development and the elimination of social and regional asymmetries were all progressively built, but at this moment, we cannot talk about more than ideas, or different seeds of a project. At this moment, while we have a will, an effective project has yet to be realized that combines both technical and political aspects of our vision.
In spite of these many important arguments and the will supporting regional integration, in the recent period, tensions against regional integration frequently appears and reflects a kind of a synchronic process where immediate interests or fears surmount the expectations of building up a better common future. With the recent economic turbulence, it appears as though this process has already been underway alongside a search for a national way of development, reinforced by the specificities of each national productive structure. The maximization of each country’s possibility to overcome the difficulties in the short term brought by an hostile international environment tends to reinforce old “natural vocations” that mean exporting raw materials and importing manufactures to/from hegemonic countries and can be read as expanding economic relations with China in the current period and walking away from the possibility of regional integration.
Are there lessons to be learned from the Latin America recent experience?
The last ten years have been very rich in the life of Latin America countries. Beginning with the struggle against liberal proposals, and more than that, against the implementation of liberal proposals in people's livelihood. Latin American social movements and progressive political forces, especially in South America, have managed to build up resistance and initiate paths toward alternatives.
This is not a trivial experience. If one realizes that it is the first time the region is attempting to find its way through a democratic environment and to operate democratic institutions after a period when the use of liberal policies contributed to weakening the social web, dismantling the offer of public services and reinforcing values of competition, individualism and hedonism not only in economic operation, but in people’s lives as a whole, it is effectively also a very new experience for Latin America.
The idea that regional integration can be an engine to fulfill the needs of the majority of South America people by regionalizing the economic productive chains, extending citizenship rights, making environmentally sustainable development possible, eliminating social and regional asymmetries through enlarging regional sovereignty, and expanding national sovereignty is one of the most important gains that can be made in this process. Perhaps this idea can be deeply discussed with other regions or countries, in order to learn from the Latin America experience.
Latin Americans have much to learn also from other regions and countries experiences that are attempting to create their own alternative paths, above all because Latin America is composed of very new nations with a short history. That said, in struggling for alternatives and trying to build up their own history, people are learning more and quickly.
If there is a lesson from Latin America's recent experience, it is liberalism must be confronted in the name of people’s well being and can be defeated by the will and the organization of social movements and political forces, but the construction of an autonomous alternative path is even harder than fighting against a system, as build up is harder than destruction. From the Latin American point of view, among many options, regional integration must be concretely considered as a real path of possibility. |
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