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Latin America is a region of increasing value in the perspective of relevant
players of world economic competition. This becomes more evident in the
case of emerging economies or, even more so, re-emerging ones such as
China and India. It is reflected by trade flows and, most particularly,
through direct investments. This fact does not go unnoticed by the United
States or the countries of the European Union.
Such valuation is even more notorious in the case of South America. On
this regard Marco Aurelio García, the international advisor of
Dilma Rousseff who accompanied Lula all through his mandate, expressed
in a press interview ("Última Hora" Newspaper, Asuncion,
28 March 2011, on: http://www.ultimahora.com/)
that South America "is the world's most relevant region in terms
of food production…additionally we have enormous mineral reserves
of the conventional type, such as iron, and of the new generation kind,
such as lithium. We also have both due to the size of the population and
the social inclusion policies being implemented in our countries, the
possibility, nay the reality, of a considerable internal market. We are
almost 400 million South Americans and have become a main point of attraction.
We have abundant water resources and biodiversity". He completed
his idea on the great value of the region for the rest of the world by
pointing out that: "Additionally, we possess characteristics that
are essential to guarantee the quality of life. It is a region with certain
cultural and linguistic homogeneity, which prevents us from being overburdened
by the task of having to deal with several languages or a diversity of
cultures. Moreover, it is a peaceful region. It is probably the only region
in the world where there are no nuclear weapons, where there have been
no conflicts between its countries for a long time. And if any conflict
regarding border issues should arise, they can be easily resolved through
diplomatic means. Moreover, -and this is key-, it is a region of democratic
governments, voted in free elections and under international scrutiny".
A view such as this expresses some convincing arguments that allow having
an optimistic view on the role of the region in the global economic competition
of the future. These may explain the fact that in many cases, governments,
businessmen and citizens are becoming increasingly assertive, pragmatic
and optimistic.
Of course, the huge challenges that the countries of the region will
need to overcome in the next years should not be overlooked. The advisability
of remaining cautious, was recently forewarned by Jose L. Machinea, (El
País, Madrid, May 12 2011, on http://www.elpais.com/).
It is a known fact that in a world of constant systemic change any foresight
analysis could prove risky. In the case of Latin America, given the image
that has long prevailed in more developed countries -especially in Europe
and in the US-, it has often been safer to predict negative scenarios.
Today, however, there are some factors that lead to propose a more positive
forecast with regards to the value of the region. This is most clear in
the case of South America.
To begin with the shortcomings that may still be observed, it would be
relevant to refer to the inventory of reasons that have for long fueled
the skepticism on the region. The following are some factors that could
eventually justify a continued pessimistic view regarding its future:
the subsistence of poverty in large social sectors and, in particular,
of great social inequalities; the low institutional quality reflected
by a weak ability to ensure the articulation of contradicting social interests
and the predominance of the rule of law in social life; the political
instability as an endemic condition often leading to schemes that are
not sustainable for efficiently dealing with the most serious economic
and social problems; the insufficient number of businesses with the capacity
to compete in international markets, which is the result of a low level
of innovation and investment in science and technology. These factors,
among others, have had prevalence in the analysis of the future of the
region, leading to pessimistic conclusions even when they are assessed
together with other factors of a more positive nature, such as the abundance
of valuable natural resources.
Before mentioning the circumstances that would lead to a more optimistic
view, we should remember that these not always surface with similar characteristics
and the same intensity in every country of the region. Latin America -and
even South America- is a vast and diversified territory. There can be
no analysis of the realities and perceptions without acknowledging the
differences, at times very deep, that exist between the countries. Therefore
the factors that would account for a more optimistic forecast of the future
of the region are not necessarily valid for every one of them. However,
they are more visible today in certain countries that have become key
ones due to their size and economic relevance, and that have thus a strong
potential to generate a spillover effect of their eventual success to
the rest of the region.
Even when other cases could be mentioned, one of these countries is Brazil.
The deep changes that took place during the presidencies of Fernando Henrique
Cardoso and Lula da Silva -and that would seem will continue under the
current presidency- are transforming the largest country of South America
in what may be a driving force of a more positive future for the rest
of the region. Certainly, this does not imply that Brazil by itself can
lead the rest of the region to different levels of economic and political
development. On the contrary, the construction of a regional space that
is functional to a scenario of peace, political stability and sustainable
social and economic development will require an active cooperation between
several countries, and even of those outside the region but with strong
interests in it.
Having made this point clear, it is then possible to mention at least
three reasons that would allow having a cautiously optimistic view of
the future of Latin America.
The first of these reasons refers to those aspects in which the learning
process that the region has undergone in the last decades becomes more
evident. Firstly, the growing number of social and political leaders -representing
a wide ideological spectrum- and of vast sectors of the public opinion
in different nations who recognize the importance of fiscal discipline
and macroeconomic stability to guarantee development goals within a democratic
and open society framework. Secondly, the recognition of the importance
of institutional quality to move forward in the areas of productive transformation,
social cohesion and competitive insertion in world economy. Thirdly, the
clear perception that in the current international system nobody will
take up the problems of another nation -unless these affect them directly
or indirectly- and that the destiny of any country -big or small- will
need to be worked out at a national level with an active participation
of all the society.
The need to reach the articulation of the different social interests
and to achieve collective disciplines as a result of strong institutions;
a home-grown strategy for economic development; and a competitive insertion
in world economy are three lessons that several countries of the region
and their public opinions are drawing from their experiences of the last
decades. These have a strong impact on social attitudes and public policies.
A second reason to be optimistic is the existence of clear signs of a
cultural change with regards to what the region may achieve in the future.
These signs are related with the great value being assigned to the definition
of long term objectives and to the development of pragmatic strategies
to achieve them. This entails having a clear idea of where a country is
headed to in terms of its development and its international insertion,
what it can effectively achieve and, most particularly, which steps would
be necessary to move forward along the chosen path. It is possibly in
this aspect where the greatest differences between the countries of the
region can be found. Deeply rooted structural issues, yet unresolved,
including those related with the active participation of all the social
actors in the development of the nation, can sometimes explain these differences.
In some cases the countries are still on their way towards achieving greater
social inclusion. These can account for a certain propensity towards political
instability and even towards economic and social policies of a more radical
nature. In such cases future perspectives are more questionable and uncertain.
The third reason is related precisely with the impact on the region of
the deep changes that are taking place in the global scenario. As a result
of this the countries of the region now have multiple options in terms
of external markets and sources of investment and technology. As a consequence
diversification in their international relations has expanded. They perceive
that they have a significant value for what might be their contribution
to face some of the most critical problems of the global agenda. Energy,
food security and climate change are some of the issues about which the
countries of the region -especially acting together- have something to
say.
The growing value that the region is acquiring may be illustrated by
the March visit of the President of the U.S. to Brazil, Chile and El Salvador
(see our article published in Veintitrés Internacional magazine
of March 2011, on: http://www.elargentino.com/).
Seen in the backdrop of the profound changes that are taking place in
the map of global economic competition and that reflect shifts in relative
power between nations, it is possible to affirm that this visit goes beyond
any short term motivation. It is within such perspective that the future
relation with Latin America, and especially with South America, acquires
its full strategic intent. It helps explain the value that Washington
is starting to assign to a region that has been traditionally underestimated
and perceived as lacking any reasonable options for its international
insertion.
Three issues stand out among those mentioned by Obama in his visit.
Indeed they are not the only ones but they are those linked with the factors
that most influence the definition of the future strategic agenda of the
United States, a country that has become aware of its role in the path
towards a new era of the international system. These issues also help
explain the underlying logic of the chosen itinerary. Brazil, as well
as Chile and El Salvador, are involved in a greater or lesser degree with
them.
The first of these issues is related to fossil fuels and energy. A few
days after his tour of the region, Obama announced at the University of
Georgetown the intention to reduce by one-third the oil imports by the
year 2005 and urged businesses for investments to increase local production.
Currently the U.S. generates only two percent of the world's oil production
and imports eleven million barrels per day, i.e.: a fourth of world production.
The uncertain signals, with a potential bearing on the future, sent by
the oil producing countries of Northern Africa and the Middle East remind
Washington of the vulnerability of the oil supply. This increases the
need to obtain it from more secure countries and, at the same time, to
develop alternative energy sources. The disaster of the nuclear plant
of Fukushima in Japan contributes to complicate still more the future
energy scenario, and not just in the U.S. At least for some time, nuclear
plants will not enjoy the sympathy of the general public in many countries.
It is in this aspect that Brazil acquires a growing relevance, as it
stands out in the field of biofuels. However it stands out in particular
due to the giant-sized oil reserves discovered off its Atlantic coast.
Brazil is thus entering the club of countries that are synonymous with
hydrocarbons. If the so call "pre-salt" oil reserves -named
this way for being located in the sea under 2000 of salt- can be extracted,
-they have not been fully explored yet-, then Brazil would occupy the
fifth place in world hydrocarbon reserves. A great investment effort in
technology and infrastructure, transportation and logistics will be needed
for this. Paired with the considerable investments that will be required
for the Soccer World Cup of 2014 and the Olympic Games of 2016, it is
not surprising that Brazil is generating so much interest among the businesses
and governments of the main players of global economic competition including,
of course, the U.S.
The second issue is related with the arrival of China as a rising player
in the foreign trade and investments of South American countries. Such
protagonism is showing in Brazil too, a country with which China has crafted
a special relation through the BRICS group and also with regards to the
relevant issues of the G20. According to a research published at the end
of March by the Brazil-China Business Council, in 20110 Chinese businesses
invested or announced investments in Brazil that could reach 30 billion
dollars, of which about 8.6 billion were still under negotiation. (See
Carta Brasil-China, N° 1, March 2011, on: http://www.cebc.org.br/).
In ten years, Brazil's exports to China rose from one billion to 30 billion
dollars, whereas its imports went from 1.2 billion to 25 billion in 2010.
Between 2009 and 2010 reciprocal trade grew fifty-two percent. China is
now Brazil's first commercial partner. A similar evolution can be observed
with regards to China's trade and investments in other South American
countries, including Argentina. (See the article by Osvaldo Rosales on
Chinese trade with Latin America, on: http://biblioteca.fstandardbank.edu.ar/).
The future projections indicate that such trend will continue to evolve.
There are other emerging economies that are starting to stand out in
the region; such is the case of India. However, it is unquestionably the
growing Chinese presence that is getting the most attention from Washington.
Additionally, it is related with the interests of the U.S. in the Pacific
region. Precisely one of the issues in Obama's Chilean agenda was that
of the trade negotiations of the Transpacific Partnership that seeks a
common framework for the free trade agreements celebrated between the
participating nations (see http://rc.direcon.cl/noticia/2922).
It represents a potential market of approximately 500 million people.
It is an initiative in which Chile plays a relevant role as a promoter
and which includes the participation of the U.S., Malaysia, Peru, Vietnam,
Brunei, Singapore and New Zealand, and it is open to other countries of
the Asia-Pacific region.
The third issue is related with migrations and, most specifically, with
the significant growth of the Hispanic population in the U.S. As is the
case with the other two issues, this one also entails multiple possible
developments. The visit to El Salvador -with its two million Salvadorians
living, many illegally, in some large cities such as New York, Washington
and Los Angeles- had a strong symbolic purport.
These possible developments are linked with some of the most sensitive
aspects of the future U.S. agenda and of the current political debate.
They involve public security (the gangs or "maras") and drug
trafficking. But, above all, they have to do with the fact that not all
Americans accept the consequences of a cross-breed and multi-cultural
society, of which Barak Obama is a clear outcome. This would explain many
of the statements that the American President made on this regard in his
Rio speech.
The data of the last US census is telling. It was made public almost at
the same time of Obama's trip to Latin America. The "Latins"
or "Hispanics" constitute already 50.5 million of the U.S. population,
43% more than in the previous census. They represent nowadays 16.3% of
U.S. population. This percentage was only 12.5 ten years ago. It increases
even more if only people under18 years of age are considered. Hispanic
births and migrations represented 56% of the growth of the American population
since the previous census of 2000. The have become the first ethnic minority,
after the "Non-Hispanic white" majority, that represents 64%
of the total population. In relation to the other significant ethnic groups,
that of "African-Americans" (13% of the total) and of "Asians"
(5% of the total), the Latin group is the most numerous and fast-growing
of them. Politicians are not indifferent to this information. Data from
the census is the basis for the proportional assignment of legislative
seats. Neither is it indifferent for the Union's States, where Hispanic
population is increasing, and especially considering that by 2050 it is
estimated that one in every three inhabitants will be Latin. Within such
a perspective in many political and cultural aspects Latin America is
becoming more relevant for the U.S., both externally as well as locally.
Finally, if the most optimistic forecasts regarding the region were
to be confirmed in the next years, taking full advantage of this would
require moving forward in the articulation of the national interests of
its countries. This could only be feasible through collective leadership.
In this sense, the quality and the density of the relations between Argentina
and every other country of the region could become a key factor. On this
regard, the strategic alliance with Brazil and Mercosur itself constitute
the hard-core of the construction of a South American geographic space,
in which UNASUR will be called upon to play an essential role.
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