The Illusion of South American Unity

Real regional integration would mean both the end of trade barriers and the local subsidies that distort trade flows and prevent competition.

Carnival in Montevideo, Uruguay. Image by Lisa Cyr, via Flickr CC.

Ever since the countries of South America became independent, the illusion of a great South American nation has been around. The discourse was revived by late Venezuelan ex-president Hugo Chávez, who self-proclaimed himself as the heir of the project of Bolívar, another Venezuelan, who is hailed in many South American countries as their liberator from the Spanish. This discourse did not occur in a vacuum, but responded to the historical moment: Venezuela’s ability to distance itself from the United States influence, and the emergence of regional blocks elsewhere, like the EU, NAFTA and ASEAN, that are ever more relevant.

There is potential for economic and (eventual) fiscal integration in South America. Culturally, the countries in the region are relatively similar, sharing languages, religions, colonial histories and relatively stable governments in the past few years. Besides, there are not many countries, only twelve (plus French Guyana, which is a province of France), which should make potential agreements more likely.

With a population of more than 400 million people, a GDP per capita of more than 15,000 USD, huge reserves of petroleum in Brazil and especially Venezuela, the environmental wealth of the Amazon rainforest, this hypothetical South American Nation would have the potential to become a global economic player. The process would also include tearing down borders within the continent, and exploiting the domestic markets to increase economic output.

But so far the story of economic and political intercourse has been one of polarizing ideologies and regional disagreement. ALBA is an alignment of the most left-leaning countries, while Mercosur members all hail from the southern cone.

The Organization of American States, or OAS, which has members from Central America, North America and the Caribbean, has been met with limited success due to the historical influence the United States has had over it.

CELAC includes countries from South and Central America, but it has not been useful as a diplomatic channel. Finally, Unasur has had limited success due to its limited power of action in mediation and lack of authority.

Having such a bundle of organizations with unclear purposes and similar mandates, has served to divide allegiances. Due to the overlap in the functions of these organizations, countries go to the one that serves their interests the most, or wherever they find the most political backing. This has served to stagnate processes and prevented consensus.

Individual countries exploit these organizations for their personal interests, and in doing so they reflect the still prevalent culture where a lack of collaboration towards common goals prevails.

An illustrative example could be the recent case where Venezuela forced out more than 1,700 Colombian nationals (another 20,000 Colombians have returned to their country because of Venezuela’s crisis), arguing that they were part of a paramilitary effort to destabilize president Nicolás Maduro’s government.

Besides the absurdity of the decision, the silence of other countries, as the Venezuelan government systematically violated the rights of these people, was shocking.

In a vote held to decide whether there should be a discussion in the OAS to find a solution to the conflict, Ecuador, Bolivia and Venezuela voted against, while Brazil and Argentina abstained from voting. The latter’s neutrality, particularly, was not conducive to engage in fruitful dialogue to solve the situation. Neutrality serves the status quo, while supporting no positions serves as no basis for dialogue.

The argument that Unasur would be a better mediation channel was trumped by the fact that no country sought its mediation after the vote, with Maduro going on an international tour and Santos rejecting it as a mediation channel.

The most active third party was president Rafael Correa from Ecuador, who sponsored talks between Colombian president Juan Manuel Santos and Maduro in his territory. This series of events discredits the socialist narrative of the South American left, as they remained passive in this process of social unrest.

Furthermore, the conflict between Colombia and Venezuela went against the idea of breaking down borders and creating brotherhood. On the contrary, it was a nationalist reaffirmation of limits and a distinction and “othering” of Colombian people in Venezuela’s territory.

Some months ago, the appreciation of the dollar vis-à-vis other currencies lead the Ecuadorian government to increase import duties on goods coming from Colombia and Peru into their territory, curtailing the flow of goods across borders and creating mutually harmful market inefficiencies.

A step towards regional integration would be price equalization between countries, which would mean both the gradual mitigation of trade barriers and of the local subsidies that distort trade flows and prevent competition, such as the one Ecuador is trying to implement on natural gas, and Venezuela has had with their oil.

And this makes us return to the aforementioned regional organizations, which lack a proposal on commercial and economic integration. Their mandates and constitutions made them weak from the time of their conception, taking away the tools they could have used as leverage in their transactions.

The frequent disavowals from presidents make the organizations lose their authority, causing often-irreparable damage. But this damage is also self-inflicted, by taking decisions that lack tact, like appointing a secretary with a dubious past in both the realms of governance and legality. Bolívar concluded:

…But this [single nation] is not possible. Actually, America is separated by climatic differences, geographic diversity, conflicting interests, and dissimilar characteristics.

One would think that South America is readier than before to achieve this long-sought political unity. But now the obstacles towards its implementation are the misadministration of organisms, lack of trust and political will, and the role of ideology—overambitious South Americans, poets of ideas, and fumblers in action.

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