( PDF ) Revista Diplomacia Estratégia Política

Download PDF

ads:

Editor

Carlos Henrique Cardim

Correspondence address:

Revista DEP

P.O. Box 2431

Brasilia, DF – Brasil

CEP 70842-970

revistadep@yahoo.com.br

www.funag.gov.br/dep

The DEP Diplomacy, Strategy & Politics Review is a three–monthly periodical on

South American affairs published in Portuguese, Spanish and English. It comprises the

Raul Prebisch Project and is sponsored by the Brazilian Ministry of Foreign Relations

(MRE/Funag – Alexandre de Gusmão Foundation/Ipri – International Relations

Research Institute), Construtora Norberto Odebrecht S. A., Andrade Gutierrez S. A.

and Embraer – Empresa Brasileira de Aeronáutica S. A.

International Cataloguing in Publication Data

DEP: Diplomacy, Strategy & Politics / Raúl Prebisch Project

no. 5 (january/march 2007). Brasília : Raúl Prebisch Project, 2007.

Three–monthly

Published in portuguese, spanish and english.

ISSN 1808-0499

1. South America. 2. Argentine, Bolivia, Brazil, Chile, Colombia, Ecuador,

Guyana, Paraguay, Peru, Suriname, Uruguay, Venezuela. I. Raúl Prebisch

Project.

CDU 327(05)

ESTRATÉGIA POLÍTICA

D E P

DIPLOMACIA

ads:

Livros Grátis

http://www.livrosgratis.com.br

Milhares de livros grátis para download.

D E P

DIPLOMACIA ESTRATÉGIA POLÍTICA

Number 5 January / March 2007

Summary

Ideas, ideologies, and foreign policy in Argentina

José Paradiso

Infrastructure integration in South America:

stimulating sustainable development and regional

integration

Enrique García

Elections and patience

Antônio Delfim Netto

The outlook for Chile-Bolivia relations

Luis Maira

Colombia’s strengths

Fernando Cepeda Ulloa

Foreign policy and democratic and human security

Diego Ribadeneira Espinosa

Cheddi Jagan’s global human order

Ralph Ramkharan

ads:

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

103

123

137

171

179

Paraguay’s economic situation and prospects

Dionisio Borda

A strategic regional view of Peru’s foreign policy

José Antonio García Belaunde

Suriname by its authors

Jerome Egger

Mercosur: quo vadis?

Gerardo Caetano

Full Petroleum Sovereignty

Rafael Ramírez

Silvano Cuéllar – Allegor

y of the Nation

María Victoria de Robayo

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

n recent times, international relations scholars seem to have realized the

importance of ideas and beliefs in the formulation of foreign policy.

Constructivists, who openly challenge more traditional theories, have played a

significant role in this regard. There is also a considerable wealth of research

and analytical models that seek to dissect this connection and find evidence of

influence or causality.

In any public policy sphere, decision makers are often

guided by a set of ideas that indicate how problems should be addressed. This

premise served as the starting point for a famous essay showing how the

Keynesian ideas were replaced by other models in England in the seventies.

Curiously enough, it was Keynes himself who said that underlying every

decision-making structure one can always find a trace of the ideas of economists

and political thinkers. Of course, the question lies in their entity, the distance

between the ideational time and the decisional time, and the consciousness the

players have of this connection.

Strictly speaking, nothing is simple with respect to ideas and ideologies, as

witness the many definitions of ideology – Terry Eagleton mentions sixteen –

Ideas, ideologies, and

foreign policy in

Argentina

José Paradiso*

* Sociologist and professor of the University of Salvador – Buenos Aires, Argentina.

[email protected]

Yee, Albert S. The causal effects of ideas on policies. International Organization 50/1, Winter 1996.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

and new contributions and discussions about the issue are constantly coming to

the fore.

This may explain why, to a large extent, the histories of ideas proceed

directly to their description, sequential order, and interconnections before

addressing their definition. The oft heterogeneous, complex nature of these

representations of reality, which are constructed for learning about things and

for guiding action in their midst, makes them refractory to excessively rigid

boundaries; they overcome barriers, follow different channels, and blend together

in multiple combinations that often lose sight of their origin.

For easier exposition, we have adopted a quite common criterion, which

distinguishes two main components in the complex field of ideation: on the one

hand, thought systems that offer a wide, moderately consistent ensemble intended

to answer most questions about man and the world, as is the case of conservatism,

liberalism, socialism, etc. Each tradition holds to a weltanschauung that integrates

into a common denominator a variety of unified manifestations and one or more

than one philosophical referents. On the other hand, specific representations

circumscribed to a given area of reality, such as the idea of progress, national

interest, development, etc. or which reflect the thinking in a given institutional

environment. Of course, there are many connections between ideological systems

and individual ideational subjects, as the latter refer to one another in relation to

the former. We can do without theories, although we know that these conceptual

structures constructed in accordance with epistemological and methodological

premises relate to one another through different idea and ideology channels.

In this essay, conceived as a first approach to the influence of ideas and

ideologies on the formulation of Argentina’s foreign policy, we adopt a

historical perspective, distinguishing four major phases: from the stage of

national organization to World War I; the period between wars to the end of

World War II; the cycle from 1945 to1990; and the period from the end of the

Cold War onwards.

An Argentina seduced by free exchange

The so-called oligarchic republic reconciled the conservative inclination

of most of its leaders with liberal beliefs that had deep historical roots and were

the source in which the great leaders after the battle of Caseros (1862) drank.

Eagleton, Terry. Ideología: una introducción. Paidós, Barcelona, 1997.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The national organization – the three constitutional administrations that

succeeded each other between 1862 and 1880 – and its heirs cultivated a liberalism

tinged with positivist tones, whose hard nucleus consisted of constitutionalism,

the free market, and a limited, albeit not absent State. These ideas formed part

of the prevailing thinking, shared, in different degrees, by most leaders and even

by much of the Catholic wing, which, although in fierce opposition to lay

legislation that was interpreted as instruments of a de-Christianization policy,

rejected the absolutist forms of government and sincerely believed in the virtues

of free exchange, values that were also shared by most of the emerging socialist

wave and the rising radical party. In sum, laissez faire was an idea shared by both

government supporters and its opponents, and was the cornerstone of a form

of integration into the international scene that, through agricultural exports,

ensured a generous inflow of capital, finished products, immigrants, and ideas.

True, there were those who held to protectionist policies but even they abjured

economic orthodoxy.

When foreign policy issues were addressed, they related mostly to territorial

boundaries and border conflicts – there was no hesitation in asserting the

“country’s just rights,” whether they were such or not, although there were

divergences about the way these rights should be defended and preserved. Some

believed in power politics and war readiness, while others held to peaceful

solutions, dialogue, and arbitration. Both camps referred to the concept of

national interest but each interpreted this concept in its own way. The

predominance of the inclination toward the peaceful settlement of interstate

conflicts served the convenience of both internal and external economic agents

but also found strong support in deep-rooted ideas about the role of international

law as an expression of the civilizing progress desired by all. “Peace and

administration” was the government formula that reflected a set of priorities

and a cause-and-effect relation between order and material progress, which should

be achieved both internally and in the conduct of diplomacy.

The adherents of realpolitik saw things differently. The language of power,

alliances, and equilibrium was best suited to their propositions and, although

they did not prevail, they were quite successful in projecting the idea that the

country had a cavalier attitude towards foreign affairs, adopting an erratic,

vacillating diplomacy. Their interpretation of national interest was influenced by

circumstances peculiar to the period: the arms race, the alliance and counter-

alliance games, and the apex of geopolitical constructions, beginning with Rear-

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Admiral Mahan’s theory of naval power. Be as it may, after the century’s first

decade, the divergences that had fueled discussions had been overcome or were

on the way to being solved. Although some were still claiming for territorial

value and a more aggressive diplomacy, among politicians and intellectuals other

ideas involving relations with the world were gaining favor.

A prevailing feeling among the leading elites that had two consequences

on the direction of foreign policy and of many diplomatic initiatives was the

fear of the United States of America. That feeling has been oft interpreted as an

accommodation to the dictates of the market or as a necessary consequence of

the special relation with London, but much more than this was involved. From

those that led a country whose modernization and economic growth earned

increasing world recognition, no one could expect less than a zealous defense of

formal expressions of the country’s self-determination, proud self-perception,

and inclination to express its own mind.

Strictly speaking, the perception of the Northern power blended

undisguised admiration and an emulation desire with a mistrust that grew with

Washington’s expansionist incursions into Hispanic America’s territories. It

reflected a set of reactions oft grounded on an attitude against utilitarianism,

reminiscent of José Enrique Rodó’s Ariel (1900), on Hispanism, or on a stance

contrary to the Monroe Doctrine. One of the most eloquent testimonies about

the Monroe Doctrine is a work by Roque Saenz Peña. A stalwart defender of the

principle of nonintervention that he considered the “great achievement of the

law of peoples, which safeguards the integrity and inviolability of nations,” the

future president asserted that “the United States is not much inclined to believe

in the political equality of nations... its actions and its relations with weak

governments suffer from a certain intemperance, show at all times its proximity

to force… What current, real, positive meaning does the famous doctrine have

today? Simply North American instead of European influence.”

Over time, at

least as regards a segment of the leadership and consistently with what was

happening in other countries of the region, this anti-Monroe Doctrine attitude

gave way to a Latin Americanism tinged with an anti-imperialism critical of the

United Sates’ actions in Central America and the Caribbean.

One of the ideas that could not fail to influence the way the Argentines

related to the world was the certainty that a great future was reserved for the

Saenz Peña, Roque. Estados Unidos en Sudamérica. La Biblioteca, Buenos Aires, 1897.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

country. Corroborated by remarkable economic performance and fueled by

comments by personalities the world over who came to ascertain with their own

eyes the miracle that was happening on the far-away banks of the River Plate,

this very image reinforced attitudes toward others, which blended pride and

haughtiness and demand for recognition, excessive self-valorization and a

tendency toward emulation and mistaken identifications.

As economic growth and modernization changed the country’s social and

political makeup at a fast pace, the necessary spaces for new belief systems were

created. While in the economic domain – as a result of a model of adequateness

to the division of labor, which produced undeniable results – laissez faire

continued to enjoy the widest acceptance, and society and politics expanded,

left and right, systems that reflected the ideological novelties of the time in the

world, particularly socialism and nationalism.

Through literature, the press, and immigrants arrived socialist news and

discourses that would shortly reproduce the reformist and revolutionary nuances

and currents prevailing in Europe. In foreign policy, socialists did not deviate

from their universal referents: they subscribed to the ideas of “mandatory

arbitration, elimination of diplomacy’s secret dealings, and the free movement

of people, ideas, and goods.”

Moreover, in Argentina, as an echo of the

European process whereby the liberal trend that had nourished the “era of

nationalities” gave way to an authoritarian current that reacted against modernity’s

social and cultural manifestations, there thrived a kind of nationalism after Charles

Maurrais – intolerant, aggressive, and an unshakeable adversary of democratic

trends. Even when major attention was directed at domestic affairs, its ideological

premises favored those that supported a power and war readiness policy.

Nevertheless, the popular will was heavily inclined toward the democratic

republicanism that would find expression in the demand for universal suffrage

and, consequently, in a decisive turnabout in Argentina’s political life.

Notwithstanding this objective, expounded in emphatic tones and in a vigorous,

expressly calculated discourse, the victorious party in 1916 did not rely on a

really consistent program, even though, owing to Hipólito Yrigoyen’s weight, it

It should be said in passing that one of the most fertile assumptions with respect to the interpretation of

what many call “the Argentine case” seems to refer back to this mentality, which was deeply rooted in society

and whose “constitutive” effects were felt at the time of prosperity and even more when the effect of the

factors that fed it declined.

Repetto, Nicolas. Política Internacional. La Vanguardia, Buenos Aires, 1943.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

would allow the influence of the idealist, principle-based thinking of German

philosopher Friedrich Krause and his followers in Spain. It is appropriate to

observe that in foreign policy matters, the program of the conservative faction

that competed for the president’s office in 1916 did not stray from the traditional

lineaments of Argentine diplomacy.

The egalitarian component of Yrigoyen’s thinking prompted him to

denounce one of the most important initiatives under that policy, namely, the

Argentina-Brazil-Chile Agreement. The radical leader thus seemed to echo the

concern of relatively weak South American countries that saw with suspicion an

entente among the three big countries to rule over the entire subcontinent,

although other reasons should not be ignored, such as the wish to differentiate

himself from his predecessors or to make some concession to those that

distrusted good relations with Santiago and Rio de Janeiro.

The fact is that with respect to the most sensitive issue that prevailed over

a large portion of its Administration, the Radical Civic Union did not stray

from the diplomatic lineaments of what it would disdainfully call “the regime.”

Conservatives, liberals, radicals, socialists, and nationalists were in agreement,

not always for the same reasons, as they supported the decision to maintain

neutrality during World War I. This was the expression of a pacifist sentiment

shared by most political forces. Apart from commercial convenience, one could

detect in this consensus nuanced by domestic political rivalries the perception

that that was a foreign issue, a struggle for power that confirmed the bellicosity

of the European sovereigns and the imperialistic ambitions that were the cause

of serious antagonism among nations.

On the other hand, it had in its favor a

similar position adopted by President Woodrow Wilson before the U.S. Congress,

according to whom that was a conflict with which his country had nothing to do.

Initially, radicalism maintained its neutrality without many upheavals; in

the first quarter of 1917, though, things turned upside down. In reaction to the

intensification of the submarine war waged by Berlin, the United States became

belligerent, in which it was followed by various Latin American countries. Parallel

to this, the events taking place in Moscow, which culminated in the defeat of

According to the symbolism of the time, “the regime” meant the embodiment of the prevailing political

immorality, which “the cause,” represented by the radicals, would eradicate.

Imberlucea, Enrique del Valle. La Guerra Europea y la Política Internacional. Buenos Aires, 1914.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

czarism and the separate peace negotiated by the revolutionaries removed from

the conflict one of the major contenders. These developments redefined the

political and ideological profile of the war, giving reason to those that saw it as

a shock between liberal democracies and authoritarian governments. Under these

circumstances, although the government maintained its stance to the end, the

consensus about neutrality increasingly dwindled, giving rise to sharp political

controversies. In response to assertions such as those by Joaquín V. González –

“In the face of a fight to death between autocracy and democracy, one wonders

if the Argentine Republic, one of the best exponents of democracy in the Americas,

should remain impassive, with crossed arms, in an attitude of indifference” – the

government would say that “Our race, owing to its ethnic makeup, is solidly

European, but our nation is far removed from the spatial orbit where the war is

being waged. In its social composition, our people descend from Europe, but in

its political organization and in spirit, it is different: a new culture has been born;

we are moved by the war but do not want to get involved in it.”

One of the most eloquent examples of the dilemmas posed by the war to

the different political forces was the controversies within the Socialist Party. True,

in this case elements exclusive to this camp were at play and were connected with

its internationalist character and the traumatic experience of its European

counterparts, which saw the collapse of the concepts of pacifism and proletarian

solidarity before the onslaught of patriotic nationalism. What is certain is that

when a group of parliamentarians in the party, backed by some members of the

National Committee, advocated the rupture with Germany, it had to face strong

opposition, which demanded the convening of an Extraordinary Congress of

the party, at which a small majority defeated the rupture advocates, thus causing

an internal split.

Idealist concepts rather than pragmatic criteria were uppermost in the

Argentine government’s attitude toward the establishment of the Society of

Nations. Invited to the constituting conference held in Geneva, it instructed its

delegates to staunchly defend the Society’s universality principles and the equality

of all sovereign states, and when the consideration of these tenets was postponed,

it ordered the Argentine delegates to withdraw from the Assembly. This attitude

revealed many things, including the fact that the popular caudillo shared the idea

Snow, Peter G. Radicalismo Argentino. Francisco de Aguirre, Buenos Aires, 1972.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

of the elites, according to which “Providence had reserved for Argentina a place

above the international scene.” As years later he attempted to explain those

decisions, Yrigoyen said: “No one has gone farther or applied with more

fervor the Gospel doctrines or projected onto the universal horizon nobler,

more fraternal ideals in interpretation of Providence in the most difficult

hours of trial.”

When directions become confusing and all becomes less

encouraging

As in most of the region, the crisis that introduced the century’s fourth

decade brought with it a rupture, except that in Argentina – and here lies its

greatest peculiarity – in addition to the military coup that broke the institutional

continuity and brought down the majority party, the picture of a country with

assured, steadily growing prosperity began to dissolve. Of course, this was not

a clear perception but vague feelings that in time would become more intense

and require explanations as to origins and responsibilities, which would contribute

to a readjustment of prospects and to a new convergence of the main political-

ideological currents.

In this search, many focused their attention on the form of integration into

the Atlantic economy,

and particularly on British imperialism, accused of being

the causer of an “unrealized nation.” It was to be expected that this interpretation

would flourish among the various quarters of a nationalism that was taking center-

stage, abetted by the retreat of democratic liberal ideals that were besieged left

and right as in the rest of the world.

The trend was universal, but in each region it blended with specific local

circumstances. In the decade that preceded World War II, the way political life

unfolded in Argentina did not do much to prevent the discredit of the political

parties and the parliamentarian institution. Their practices and the weakening of

their capacity to reflect the citizen’s interest eroded the credibility of and the

confidence in the ideological matrix that sustained them and added adherents to

Yrigoyen, Hipólito. Pueblo y Gobierno, Tomo IV, in La función Argentina en el mundo. Raigal, Buenos Aires, 1953.

Donghi, T. Halperin. La Argentina y la Tormenta del Mundo. Idea y ideologías entre 1930 y 1945. Siglo XXI,

Buenos Aires, 2003.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the critical factions of the radical left or to the different versions of nationalism,

to which it would become relatively easy to define the shades and content of the

ideological debate.

Be as it may, it is somewhat paradoxical that during those same years when

domestic policy seemed to lose direction amidst proscriptions, frauds, swindles,

party splits, and questionable agreements and nationalism at its apex reflected

disenchantment and rejection, Argentine diplomacy obtained the most

noteworthy achievements of its history, made somewhat emblematic by the

awarding of the Nobel Peace Prize to Carlos Saavedra Lamas, who was foreign

minister from 1932 through 1938. The Swedish Academy’s recognition was the

crowning of a high-profile career that, in addition to the intervention in the

Chaco War, earned credit for other remarkable achievements at both the regional

and the global level. Saavedra Lamas was a highly respected man of ideas with

broad interests and firm convictions about the value of legality in the international

domain and about cooperation among Latin American countries.

Let us return to the expressions of nationalism. The vast literature devoted

to the description or explanation of the phenomenon emphatically details the

wide variety of nationalism’s manifestations, each one based on a different

combination of national interests and international referents. The fact that the

latter were Spanish, Italian, or German was not a merely formal question; they

reflected ideological identities that were differentiated but that had common

denominators and that found an outlet in similar political decisions.

Such was the case of neutrality. It must be admitted that the judgments of

the consequences of this Argentine “relapse” in connection with an event that

would shake the world have led to too simplistic notions about the ideas and

ideologies that gave support to such a stance. In general, mention is made of the

opportunist interest in keeping open the trade channel to Great Britain. But

there was much more to it. Obviously, the antiliberal right’s authoritarian

nationalism adhered to the Axis and saw Argentina as part of the new order

envisaged by the German military power. Another segment of nationalism,

antiliberal rather than antidemocratic, and suspicious of British imperialism, was

less inclined to ideological identification and did not see adversely the prospect

of an Axis victory, pursuant to the maxim “the enemy of my enemy is my friend.”

Saavedra Lamas, Carlos. Por la paz de las Américas. Gleizer, Buenos Aires, 1937.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Lastly, mention should also be made of the neutralism that had to do with a kind

of “sovereignty zeal”, the idea of diplomatic continuity and consistency, or

respect for party tradition.

In all these cases, the war was certainly interpreted

from the angle of conventional political realism, which did not notice the perverse

nature of the Nazi regime.

For a couple of years, neutralism found an ally on the extreme left of the

political spectrum. Faithful to their pro-soviet affiliation as long as the

nonaggression pact between Berlin and Moscow was in force, its exponents held

to the notion that that was a war between imperialistic powers, from which the

country should keep away; but as soon as Germany denounced the agreement

and launched its divisions toward the East, they directed all their efforts in favor

of Buenos Aires’s alignment with the United Nations.

Curiously enough, in World War II there was a repetition of the

circumstances observed in 1914: at first, the United States favored the American

continent’s neutrality but, in the course of hostilities, the German attack against

the Soviet Union and the Japanese attack on Pearl Harbor changed the composition

of the alliances and the ideological expression of what was at stake. Washington’s

isolationism was accompanied by efforts – begun before the conflict – to

harmonize continental positions and to set up a common defense system, but

they met with Buenos Aires’s ever reticent attitudes. The divergence became

sharper after the Rio de Janeiro Conference in early 1942. Already in war, the

United States exerted pressure for a rupture with the Axis, while Argentine

diplomacy resisted, proving its “independent criteria, sovereignty, and self-

determination.”

There are two instances of ideological expressions of the time that have

not received sufficient attention. On the one hand, the Latin Americanist referent

of most political forces that vied with each other to set the country’s internal and

external direction. This was as present in the popular nationalism that followed

the Yrigoyenist tradition as it was in authoritarian nationalism, although in the

latter case it was combined with a pro-Spain current of Madrilenian inspiration

or distorted by an inclination toward power politics, reliance in force, and

reservations vis-à-vis Brazil and Chile. But it was also a major component of the

This was the kind of neutralism backed by the segment of the Radical Civic Union led by the Cordovan

caudillo Amadeo Sabattini.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

proposals of the democratic liberal sectors, including reformist socialism,

particularly when practically the entire continent made common cause with the

United Nations against the Axis. In this case, Latin Americanism emerged as an

expression of democratic solidarity.

On the other hand, an ideological perspective that has not been sufficiently

considered, despite its continuity in the discourse of the political movement

which, gestated in those years, would widely prevail in the second half of the

century and become known as the “third position.” Strictly speaking, this current

had reputable antecedents in the world, at least in many decades, represented by

four major currents – social democracy, social liberalism, social Christianism,

and doctrinaire corporatism. It had embraced the search for an intermediate

alternative to laissez faire capitalism and Soviet collectivism. Of those four

currents, it was the latter two that most influenced the Argentine third position,

and this ensured its political projection.

The most noteworthy expression of this third position was the Renovation

Movement begun in 1941, inspired by a group of young university students. Its

members defended neutrality in the context of a “national recovery” doctrine

and program. Its theme was: “Neither liberalism nor totalitarianism. Authentic,

true democracy. Argentine solutions for Argentine problems.” In foreign policy,

it pretended also to maintain an equidistant stance: “Neither anglophiles nor

germanophiles. Nor circumstantial neutralists. Argentines who only think of their

homeland’s greatness.” Of all advocates of neutrality, it was this group that based

its positions on the latest literature on world policy. Employing all the conceptual

scaffolding typical of the realist school that places interests above moral and

ideology, it developed the thesis according to which what mandated neutrality

was the necessary defense of democracy, and sought to show the inconsistency

of considering as a democracy a coalition that had in its ranks the Soviet Union,

or even China, for that matter. One of the Movement’s main leaders proclaimed:

“Painful as it may be to say it, this war is not a struggle between National Socialism

and communism, or between Nazism and liberalism. A war is always fought by

countries, each one acting in accordance with what serves its interests... it is a

mother battle for the predominance of Anglo-American imperialism on one

side and of German imperialism with its Italian and Japanese allies on the other...

Repetto, Nicolas. Op. cit.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the world hecatomb that takes place in this war of imperialisms and of countries

that move around on the world’s huge chessboard seeking the position and the

best opportunity for their own interests.”

No further commentary is needed to

show the influence this perspective would have on the ideas of the young army

officer that was getting ready to usher in a new stage in Argentine political history.

The Peronist restoration

Certainly there is not much to say in addition to what has already been said

about the makeup of the coalition that hoisted Juan Domingo Perón to power

in February 1946: the armed forces, party factions, some of which had split off

from traditional parties, while others were new on the Argentine political scene,

and entrepreneurial and labor sectors strengthened by the decade-long

industrialization wave. There was also an supposed convergence, which some

did not find quite coherent, of different belief systems, including, other than the

version of the already mentioned third position, Keynesianism and welfare state,

protectionist industrialism, neocorporatism, social Christianism, popular

democracy, etc. Naturally, under the “Movement” as a whole, each tendency

would be reflected in practice and would interpret the process as the realization

of its values and expectations.

Juan Peron’s pragmatism and shrewdness played down the weight of ideas

in his political action. The creator of Justicialismo drew nourishment from different

ideological traditions without dogmatically sticking to any, although what fit

him best was a form of nationalism devoid of aristocratic tones, and very little

appreciation for liberal democracy and its institutions. When he had to seek a

clearer profile, he found it in a particular form of third position. Professional

training and intellectual habits predisposed him to careful consideration of

international circumstances and to interpret them in the light of realpolitik codes.

Throughout his life, Perón claimed that every political action should take into

consideration a proper appreciation of the relations of force in the world. It

was precisely this realist matrix that supported his conviction that the war that

ended as he rose to power would not be the last world war of the century. This

idea of a foreseeable shock between the current victors would guide his steps

del Carril, Bonifacio. Movimiento de Renovación. Buenos Aires, 1943.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

through much of his first term as president, as he thought that another

intensification of the food demand would benefit Argentina.

On the other hand, it should be noted that Perón was getting involved in

that current of realism that tends to potentiate the value of politics, rather than

reduce it with passive adaptations or more or less automatic alignments. This

would have special connotations that would develop both internally and on the

international scene. He saw politics as the most appropriate tool for constructing

new realities and for ensuring that one’s own interests would prevail, particularly

vis-à-vis the stronger. It could be said that this was a variation of power politics

proper to less capable states, aimed at balancing forces and improving their

chances vis-à-vis the greater powers.

His experience of Washington’s attitudes in the war years and its hostility

toward him and his political project certainly helped him to develop this

autonomist stance, which was nevertheless in line with the ideas prevailing in the

social body. After all, the electoral effect of his presentation as the national choice

against the wishes of an American functionary more than proved this disposition.

Although affected by circumstances, the self-esteem of the Argentines had not

lessened nor had they lost the confidence in a grand future, which had taken root

in the first part of the century. Not even those that had the inner intuition that

the times of prosperity were past were willing to give up old aspirations. Practically

no one among conservatives or radicals, socialists or nationalists, academics or

entrepreneurs, or the simple man on the street looked favorably at the leaders

that led the people as if they were the inhabitants of an irrelevant peripheral

entity. In this sense, Peronism meant a fleeting restoration of confidence in

prosperity and greatness, although conditioned by the feeling of a society socially

and politically divided as it had never been in the recent past.

As he entered the decisive stage of his march to power, Perón was

convinced that the world was entering a “social era,” which he would seek to

lead on a different path from that envisaged by revolutionary Marxism. Although

he made reference to a “national revolution,” what he was following was a

reformist course. The issue was not his intentions but the consequences of his

decisions. His natural inclination toward order and national unity would push

him toward a profound division of society, facilitated by the reaction of the

dominant classes and of a large part of the middle segments of society toward

the irruption of the masses.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

As mentioned, Perón would find the “third position” formula – to which

he adhered owing to his ability to realize the ideological trends of the moment

in their ecumenical or vernacular garb – an appropriate tool for both domestic

policy and diplomatic action. In the period 1946-47, this formula was declared

the Movement’s doctrinaire fundament. In addition to reflecting an

“idiosyncratic” disposition to believe in a providential destiny reserved for a

country eager for greatness, the third position formula that “Argentina’s tutelary

genius offers the world as a solution to its most perplexing problems” served

many purposes. Some of the main purposes were to provide a doctrinaire

framework for the emerging political force that was strengthening, both internally

and externally, the image of its founder and to restore the prestige of the country,

showing it as a society ruled by lofty universal values.

Strictly speaking, the essential element of the Argentine variety of third

position, which Peronism purported to express, was its alternative economic

and social organization program different from individualist capitalism and from

collectivism, which in practice translated into a much less radical social economy

than originally proposed. Obviously, this could not fail to have international

repercussions at a time when the two extremes from which it meant to diverge

were represented and led by two superpowers engaged in a Cold War that seemed

dangerously to escalate. According to an interpretation not too far removed

from reality, both superpowers embodied a form of imperialism – one

characterized by economic penetration and the other bent on political and

ideological penetration. The “Argentine solution,” which, according to official

propaganda, had the merit of having proved its feasibility and effectiveness, was

presented as an ecumenical alternative: “Our field of action is the world because

great movements, such as Peronism, are not national, but universal movements.”

It should thus be admitted that such a positive doctrine could not be construed

as an isolationist or neutralist position.

The third position aspired to being more than the instrument of a realism

that sought to reinforce the country’s relative position, so as to improve

performance conditions in a context under the hegemony of the United States,

and to this end it resorted to normative precepts and to reference to values. The

same direction was followed by the Latin-Americanist assertion, consistent with

economic demands and political strategies, but its objectives could be seen as

negatively affected by the attitudes in which the offer of that “Argentine solution”

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

was wrapped up and which the neighboring countries could easily interpret as

unacceptable intervention in their internal affairs.

While from the beginning the government’s macroeconomic policies were

firmly grounded on Keynesian ideas and practices, its industrial policy was driven

by old protectionist practices and the pressure of interests grown more powerful

during the war years. Only halfway in Peron’s administration did the lineaments

of a consistent industrial development model began to find echo throughout

Latin America. The ideas of the Economic Commission for Latin America and

the Caribbean-Eclac, spelled out by its director in his famous “1949 Manifesto,”

began also to find echo in all Latin America and did not fail to catch the interest

of Peronist functionaries and technicians, although their assimilation could not

occur in the context of formal relations with Eclac owing to a special political

reason – Raul Prebish, the Commission’s Director, was an Argentine exile that

had left the country, persecuted by the authorities.

In addition to this particular circumstance, and similarly to what occurred

in the rest of the region, the “new economic orthodoxy” would combat the

“old classic orthodoxy,” and this contention, which served specific interests of

the two currents, would endure as an ideological substratum of political and

economic life for at least a quarter century.

Of course, Eclac’s thinking could

not fail to influence the formulation and implementation of the peripheral

countries’ foreign policy. It exerted this influence directly or indirectly, either by

encouraging autonomous stances – independent foreign policy – or by defining

criteria of integration into the world market and by sponsoring integration.

It was precisely during the transition period that followed Perón’s overthrow

that the principles of liberal orthodoxy once again served as a guide for the

conduct of Argentine authorities, both in the domestic political and economic

sphere and in respect of a foreign policy rid of any trace of third position or

neutralism vis-à-vis the world conflict. However, as the rise of the intransigent

Radical Civic Union headed by Arturo Frondizi would show, these intentions

could not be imposed merely because they represented exactly the opposite of

the deposed government.

Hirschman, Albert (comp.). Controversia sobre Latinoamerica. Editorial del Instituto Di Tella. Buenos Aires, 1963.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Between developmentism and economic orthodoxy

Surely no other Argentine political cycle rested on such a body of coherent,

well-articulated ideas as did the one led by Arturo Frondizi. Even his profile

suggested that he was the politician with the greatest intellectual heft, to the

point that this was one of the favorite arguments evoked in his favor or against

him. But that characteristic was not his alone. Many of his closest collaborators,

several of whom came from different positions on the ideological and political

spectrum (nationalists, socialists, etc.) had a solid political and ideological

background. All of them closed ranks behind the idea of development turned

into a program, a goal, and a theme of political action. It was an idea supported

by modern, theoretically-based economic models combined with elements from

various origins.

Similarly to Perón, developmentists presumed that they were the ones that

paid the greatest attention to the world situation and had the best knowledge of

it. On this premise they built their policies. In their view, the scientific and

technological revolution, the end of the Cold War, the beginning of peaceful

coexistence, and the awakening of the colonial peoples shifted the axes of world

conflicts. The East-West rift was eclipsed by the hierarchization of North-South

relations and by a new phase of cooperation between the superpowers and

between them and the peripheral world. As one observer has put it, what became

fundamental instead of the division of the world between capitalism and socialism

was the division between the developed and the developing world. A key

assumption was that the end of the Cold War owing to the nuclear tie-up would

free up enormous resources from the arms race and that these resources should

be applied solely in the promotion of the more backward areas of the major

countries and of the most undeveloped regions. As Frondizi said, “Forced into

peaceful coexistence, the great capitalist and socialist powers should shift their

contention to the field of economic and political competence.” Trade flows and

capital movements would be thereby affected to the benefit of the South.

Frondizism represented a variation of the developmentist structuralism that

in large measure fitted the Eclac diagnostic but differed from its model and

recommendations. Its exponents recognized the contributions of what was

becoming consolidated as a new development economy, particularly from

Paradiso, José. La Política Exterior Durante el Gobierno de Arturo Frondizi. Unpublished.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

perspectives such as the one adopted by Albert Hirschman in his influential 1958

work The strategy of economic development. One chapter showed that his divergence

from the Commission of which Prebish was president lay in his resistance to the

idea of economic integration favored by it. Frondizist developmentism did not

deviate from Latin American rhetoric that was part of the radical tradition, but

tended to circumscribe it to the political sphere, avoiding committing itself to

the regional complementation process.

From Frondizi’s removal from office to the late-eighties, the life of the

country was strongly conditioned by the contention between two systems of

ideas: structuralism and developmentism/independent foreign policy vs.

economic orthodoxy/pro-West alignment. All this occurred in an extremely

complex political context dominated by the “Peronist question” and the

institutional alternatives – civilian/military alternation – associated with it.

As has been repeatedly said, the “party governments” were programmatically

inclined toward the first system of ideas, while military governments, owing to

the interests that participated in them, tended toward the second system. But

even in the case of regimes marked by fierce struggle between factions, it was

difficult to ignore the primacy of nationalist ideas in the peripheral world. Such

was the case, for instance, of the period of the so-called Argentine Revolution

(1966-1973), during which political orientation changed owing to the change in

the interrelation among ideologies in favor of the developmentist/autonomist

concepts.

A manifestation of the supremacy of nationalist expressions, particularly

in the late sixties and early seventies was the primacy of the so-called theory of

dependence and “third-world” formulations. These interpretations of the causes

of the Southern countries’ economic backwardness and the ways to overcome it

exerted strong influence on the decision-making systems of Latin American

governments. Juan Domingo Perón came back into power precisely at the

culminating moment of this “system of beliefs.” His historical credentials – having

favored the third position and neutrality in the forties – were enhanced by the

decision to join the movement of nonaligned countries, which enjoyed the highest

prestige then, owing to the timeliness of its political and economic claims.

Frigerio, Rogelio. Estatuto del Subdesarrollo: las corrientes del pensamiento económico argentino. M.Guemes, Buenos

Aires, 1974.

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

An idea underlying the assertions of the so-called Third World but which

transcended it was that of the establishment of a new international economic

order. It moved many political leaders and government officials and found its

best expressions in the work of several research centers both in central and in

peripheral countries. All manifested a sincere concern about the growing tensions

caused by the gap between the rich and the poor countries or about the likely

consequences of the increasing deterioration of circumstances. But the alert

sounded about the tempests that were brewing was not heeded and the new

order that actually came into being as of the eighties was quite the opposite of

what had been envisaged. By heeding the lessons learned from the statist models,

the crisis of social realism, the rupture of the Their World front following the

oil crises, and the “unexpected” course of some Asian countries, economic

orthodoxy recovered positions and took the ideological center stage, led by

Thatcher’s England.

In a way, the Argentina of military rule and Pinochet’s Chile anticipated

the neoliberal wave and the activation of the anti-communist Western stance,

led by Washington. The rifts in the ideas and decisions of the military regime

resulted from the internal disputes for mastering the regime’s succession or from

the fierce contention with the White House or the State Department because of

their stiff repressive measures.

Return to democracy after an unfortunate war against those that had in

large measure inspired the Process’s economic and social policies was also the

return of the developmentist structural and autonomist ideas that were part of

the major parties’ programs. It took the Alfonsín administration some time to

realize that the world was not the world of the seventies and that the hegemonic

ideologies had also changed. Nevertheless, it did not easily cede to the pressure

of circumstances: pressed by the foreign debt incurred by its predecessors, it

sought unorthodox economic alternatives and firmly maintained an autonomous

foreign policy in the midst of the reactivation of the Cold War by Reagan. That

which had started with the certainty of at least a second term for the party ended

with its premature closure and the return of Perón’s heirs to the seat of

government.

Peronism’s “third incarnation” – the first two had been in the person of its

own creator – took place in a radically different ideas environment. They had

occurred when nationalist concepts and practices and reservations about the

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

virtues of the market and free entrepreneurship had reached a peak. Carlos

Menem, however, arrived at Casa Rosada when the gales of liberalism were

blowing at full force, pulling down the welfare State’s debilitated structures. On

top of this, the hyperinflation experience that had forced Raul Alfonsín to

anticipate his exit predisposed society to orthodox formulas as they were put

forth in the notorious Washington Consensus.

Menem was sufficiently clever to realize that the surest way to remain in

office for as long as possible was by accommodating to the current and proving

once again that what characterized Peronism was pragmatic accommodation to

each set of circumstances. While this adaptation facilitated his permanence in power,

his performance as the strictest adherent of the prevailing orthodox doctrine

served him as a double insurance, as in few places in the world had the rules

been so literally followed and the alignment with the great powers been so firm.

Some, seeing in the commitment to Mercosur a proof of the continuity of

the integrating orientation started by Alfonsín, talked of “State policies.” Without

discarding the possibility that this idea was shared by some who participated in

that initiative, it was not difficult to see that there was a clear incompatibility

between the integration concept associated with the developmentist/autonomist

model and the one implicit in neoliberalism. And in between, many difficulties

sneaked in.

It must be pointed out that in Argentina, peculiar domestic circumstances

were added to the global factors that drove the neoliberal counteroffensive and

the change in ideological hegemonies: first, hyperinflation’s traumatic effects on

the economy, attitudes, and sociability patterns; secondly, but not unrelated to

the preceding, the consequences of the “sense of decline” that weighed ever

more heavily on the citizens’ conscience and disposition. We have seen that this

had occupied the citizens’ mind since the thirties. For some decades, this feeling

had competed with its opposite, i.e., the conviction of a greatness and a potential

that needed restoring. This was clear in Perón, Frondizi, and during the Argentine

Revolution. And yet, each institutional crisis pushed farther away such a delusion

and heightened the sense of decadence. For the adherents of the new liberalism,

restoration implied the opposite of what developmentist policies, state

interventionism, and autonomous diplomacy had intended. As an economy open

to the world and a special relationship with the hegemonic power at the time had

been the successful formula in the early 20

century, this formula should be

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

repeated at the close of the century, even at the cost of undoing what had been

done, by discarding the ideas that had supported those policies. Those were the

terms of the discourse – disseminated by influential media communicators and

many liberal intellectuals of long-standing or newly converted – that accompanied

the repressive practices of the military regime installed in 1976 and supported

Minister Martinez de Hoz’s administration’s characterized by “abertura.”

In sum, this mix of ideas, sensations, and traumatic experiences influenced

domestic and foreign policy for a decade and continued to exert its influence

after the defeat of Peronism by a coalition that put in office a representative of

radicalism. In reality, though, the formula of a “nineties’ model with minor

adjustments and control of corruption” could not ensure the consolidation of a

new political cycle. It is true that the famous parity of the dollar and the peso,

acting as a support reinforced by the memory of hyperinflation, did not leave

much elbow room for a too hesitant government, unable even to maintain the

cohesion of its political basis. The days that followed the traumatic conclusion

of the Alianza’s administration saw the return of the image of an ungovernable

Argentina bent on advancing toward new abysses. If this was avoided, it was due

in large measure to Eduardo Dhuhalde. Menem’s supporter since the early

nineties, he had gradually distanced himself and become the spokesman of values

and practices of historical Peronism. Assisted by a minister of the economy

alien to orthodox fundamentalism, he was sufficiently able to redress the situation

and prevent the chaos predicted by many. Duhalde “completed his work” by

blocking Menem’s return and making possible the drawing of a new card of the

Peronist game.

As much a “Peronist” as Menem in his concept of power, Nestor Kirschner

began his term on a not too firm ground, undermined as it was by the “default”

but benefited by a more propitious climate for developmentist formulas. Although

one cannot speak of a new system of beliefs or a change in ideological hegemonies,

a retrocession of liberal orthodoxy seems evident. The social and economic

effects of policies inspired by it have brought to the fore the demand for social

justice, productive development, and autonomy – a call to a resumption of the

course interrupted thirty years ago, albeit in a quite different world, which, precisely

because it is different, requires renewed, creative forms of adaptation.

Version: João Coelho.

DEP

Enrique García

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

egional integration is a complex process that takes place in many different

ways, taking advantage of opportunities and adapting pragmatically to the

restrictions and hindrances that may arise. Accordingly, it is a process that places

major demands on the regional leadership and has deep implications in the

economic, social, political and cultural fields.

* Executive President of the Andean Development Corporation (CAF)

[email protected]

Infrastructure

integration in South

America: stimulating

sustainable

development and

regional integration

Enrique García*

Infrastructure integration in South America: stimulating sustainable development [...]

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

This process should not be seen as a luxury but as a strong necessity of

our region to face the huge challenges posed by the social realities of our

countries. In fact, the current favorable macroeconomic conditions and the

positive expectations should not make us conclude that South America has

found the path to sustainable development. The economic growth achieved in

the recent past was largely the result of extremely favorable conditions in the

international environment (especially the recuperation of the U.S. economy

and the high investment and growth in China). On the other hand, several

among the critical structural problems that have hindered the achievement

of an effective and socially equitable model have not yet been solved

adequately.

Toward a new development agenda

Latin America must push forward a development agenda that aims at

high and sustainable rates of growth and at the same time provides for the

improvement of the living standards of the majority of the population. To

reach this goal, the new development agenda must promote in an integrated

way the elements of macroeconomic stability, efficacy and equanimity and

solidarity, through the joint efforts of governments, the private sector, civil

society and the international community.

To achieve effective economic growth, the region must harmonize the

main macroeconomic balances: sustained expansion of the different forms of

capital, that is, physical, financial, natural, human and especially social capital,

a major effort leading to the evolution of productivity and the explicit adoption

of criteria of social improvement and inclusion, as well as the fight against

poverty.

One should also aim at: i) the search for an adequate balance between

the State and the market in accordance with the realities, restrictions and relative

competences of the public and the private sectors: ii) encouragement of a

changeover from a strategy of comparative advantages based on natural

resources and low wages to one that places increasing emphasis on competitive

advantages stimulated by knowledge, innovation and generation of added

value; iii) the recognition that success depends mainly on internal effort, and

external support should not be seen as a substitute but as complementary to

Enrique García

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

one’s own; iv) the decision to view regional integration not as an end in itself

but rather as a tool for achieving a better and more equitable international

insertion and a higher degree of social cohesion at the regional level.

The challenge of regional integration

South America experiences today a decisive stage of its history, inasmuch

as the countries that make it up face the challenge of progressing towards regional

convergence, having a clear understanding of the positive aspects of an

integration that possesses a definite identity. National leaders are advancing

towards the construction of this new reality, which results from the understanding

– in all its dimensions – of the strategic importance of South American integration

for the welfare and the prosperity of the region.

In this context, the question of the physical infrastructure of the region

assumes particular relevance. Infrastructure is a key element of economic and

commercial integration, for it affects market access in two ways: the transportation

of raw materials to the production centers and subsequently the distribution of

the products to the national and international consumption centers.

In Latin America, important geographical obstacles such as large areas

and great distances with low population density, complex natural barriers and

high vulnerability to natural disasters complicate the provision of infrastructure.

Such obstacles and the inadequacy of the infrastructure and logistics services

generate an increase in transaction costs and low competitiveness and productivity.

Such costs may even be greater than the protectionist barriers in other trade

partners.

For example, intra-regional trade in our region is considerably lower than

in other parts of the world. Trade within the Andean Community is about 10%

of its total trade, and in Mercosul around 25%, while intra-regional trade is 55%

within Nafta, 60% within the European Union and 68% within Asia.

CAF and regional integration

Since its inception, one of CAF’s priorities has been to strengthen regional

integration schemes as provided for in its Constitution Act. This commitment,

Infrastructure integration in South America: stimulating sustainable development [...]

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

which in the first few decades of CAF’s operation covered mainly the Andean

area, was extended since the beginning of the 1990’s due to the expansion of the

Corporation’s membership, which today numbers 17 countries, including all

members of the Andean Community of Nations (CAN) and the expanded

Mercosul, plus an important group of Central American and Caribbean countries,

as well as Spain.

A precious opportunity for the consolidation of the actions that we have

been taking in the regional context came with the recent establishment of the

South American Community of Nations which encompasses the members of

CAN and those of Mercosul which are also members of CAF.

Although physical infrastructure has been one of our emphases as regards

integration, ours is an integral and multidimensional vision, as it includes the

objectives of commercial integration, social and cultural integration, the

integration of capital markets, the integration of the labor markets,

macroeconomic convergence and political integration. CAF actively promotes

those objectives through its action in the field of credit, its several strategic

programs and its special funds, including those for cooperation.

From the standpoint of financing, CAF’s most significant effort in the last

15 years has targeted the trans-South American infrastructure – articulating

territorial and regional integration – which reflects the important and steady

growth of our portfolio of physical infrastructure projects throughout the region,

for a total of US$ 4 billion at the close of 2006. Such projects have been

strategically selected in tandem with governments and the private sector, and

their implementation has brought about the reduction of bottlenecks and missing

links in the logistical platform of South America.

During the last 10 years, CAF has provided financial support to the

execution of 49 projects of physical integration in South America, for a total

investment of over US$ 11 billion, of which CAF’s share has been of about

US$ 3,5 billion. Such projects include land and river links, energy and

telecommunications projects.

The experience acquired by CAF in infrastructure in the course of those

years resulted from successful alliances with the public and private sectors and

from the harmonization of national and regional interests. Innovative financial

structures have been developed during several years, among which those of

Enrique García

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Public-Private Associations (PPP’s), Partial Assurance mechanisms, participation

in domestic capital markets in the financing of the projects, concessions and

other kinds of financial counseling.

It is also important to highlight the creation by CAF of several funds whose

objective is to reduce some of the difficulties inherent to large infrastructure

projects. The Fund for the Promotion of Sustainable Infrastructure Projects

(Proinfra) aims at the financing of adequate preparation, financial structuring

and evaluation of sustainable infrastructure projects that have high impact on

regional, national or local economies and that contribute consistently to the

integration of CAF’s shareholders.

PROINFRA’s resources finance the elaboration of sectorial infrastructure

studies, investment options or pre-feasibility, feasibility and detailed engineering

studies, as well as the social and environmental impact of infrastructure projects.

It also finances counseling for the financial structuring of the projects or

concession processes and calls for bidding of construction works, including

technical assistance for the creation or strengthening of public investment

planning systems and public-private participation (PPP).

Likewise, it is important to emphasize the careful analysis of the

environmental and social impact of the infrastructure projects financed by the

Corporation. CAF possesses innovative tools and methodologies that have

evolved in the last few years and which have permitted the conservation and

the better use of natural resources and ecosystems. CAF also contributes to

the prevention and mitigation of the risks caused by natural disasters, by

supporting investments aiming at reducing the geologic vulnerabilities in

infrastructure projects. In this way we enhance and preserve the natural capital

and the cultural diversity of the region so as to favor a sustainable and inclusive

development.

The IIRSA initiative

IIRSA is a multinational, multisectorial and multidisciplinary initiative

involving the 12 South American countries with the participation of the

transportation, energy and telecommunications sectors and encompassing

economic, legal, political, social, cultural and environmental aspects.

Infrastructure integration in South America: stimulating sustainable development [...]

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The main objective of the “Initiative” is to develop the regional

infrastructure in a framework of increasing competitiveness and sustainability,

in order to generate the necessary conditions to achieve, in each region, a pattern

of stable, efficient and equitable development, by identifying the physical,

normative and institutional needs and by searching for implementation

mechanisms that promote physical integration at the continental level during

the next 10 years.

IIRSA originated in the Meeting of South American Presidents held in

August 2000 in the city of Brasilia, when the region’s leaders agreed to act

jointly toward the modernization of the regional infrastructure and the

adoption of specific actions to promote its integration and economic and

social development.

This commitment was expressed in an Action Plan elaborated at the

Meeting of South American Ministers of Transportation, Energy and

Telecommunications held in Montevideo, in December 2000, which became

the point of reference for the development of IIRSA’s activities. From then

on, its objectives, scope and implementation mechanisms have been validated

and strengthened in different sectorial meetings and meetings of the Presidents

of the countries belonging to the “Initiative”.

IIRSA’s guiding principles

At the start of the 21

century, physical integration and the modernization-

development of regional infrastructure are seen as central elements for

stimulating the organization of the South American area and the sustainable

economic growth of its countries. In fact, the loss of the relative importance

of the region in the world’s economic context has resulted in an increased

perception that the region needs the adoption of progressive integration

policies which allow for the articulation of comparative and competitive

advantages of our countries in order to achieve a strategic insertion in

international trade.

Accordingly, there is currently a general understanding that a stronger,

economic, social and physically cohesive region can move forward more

effectively to overcome the obstacles to its development. In the presence of

Enrique García

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

several international asymmetries, integration becomes the key for the

achievement of commercial and financial gains for South American countries,

for the physical and economic articulation of the continent and for an adequate

insertion in the international context.

The view of infrastructure as a key element of integration is based on

the notion that the synergic development of transportation, energy and

telecommunications can generate a definitive push to overcome geographic

barriers, bring markets closer and promote new economic opportunities, as

long as this takes place in a context of commercial and investment opening,

of regulatory harmonization and convergence and of increasing political

cohesion.

The question should not be seen, however, in an isolated and independent

manner. It involves the improvement of the infrastructure in itself (roads, ports,

airport, fluvial, etc.) but also to notion of an integrated logistic process which

encompasses the improvement of the customs and telecommunications systems

and regulations, energy markets, information technology, services and logistics

markets (freight, insurance, warehousing and processing of licenses, among

others), and sustainable development at the local level.

A quick review of some of the guiding principles provides a clear idea

of the objectives and scope of the “Initiative”:

1. Open regionalism: it is necessary to reduce to a minimum the internal

barriers to trade and the bottlenecks in the infrastructure and in the

regulation-operational systems that support productive activities in

a regional scale. While the commercial opening facilitates the

identification of productive sectors with high global competitiveness,

the vision of South America as a single economy permits the retention

and distribution of a larger portion of the gains from the region’s

trade and the protection of the regional economy against the

fluctuations in global markets.

2. Integration and development axes: they represent a territorial

reference for the broad, sustainable development of the region. The

ordering and harmonic development of the physical space will

facilitate access to zones of high productive potential that may remain

Infrastructure integration in South America: stimulating sustainable development [...]

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

today isolated or underutilized due to the inadequate provision of

basic transportation, energy or telecommunication services. The

Integration and Development Axes represent a territorial reference

for the broad, sustainable development of the region.

3. Economic, social, environmental and political sustainability: the

process of economic integration of the South American space will be

sustainable if it achieves the objectives in the four areas mentioned

here.

4. Increase in the added value of the production: to establish production

chains in sectors of high global competitiveness, capitalizing on the

comparative advantages of the countries and strengthening the

complementariness of their economies.

5. Normative convergence: the achievement of normative convergence,

including the convergence of visions and programs of the countries is

another requirement to render viable the investments in regional

infrastructure.

6. Public-private coordination: the challenges of the development of

the region point to the need for shared coordination and leadership

between governments (in their different levels) and the private business

sector, including both the promotion of strategic public-private

partnerships for the financing of investment projects and consultations

and cooperation for the development of a regulatory environment

geared to the significant participation of the private sector in the

regional development and integration initiatives.

In sum, the integration of the physical infrastructure of South America

aims at establishing mechanisms to overcome obstacles to growth and push

forward the development and integration of the region through financial and

methodological innovation in order to establish transportation, energy and

telecommunication links between markets and areas with a high potential of

growth or isolated zones that offer comparative advantages in the social, natural

or cultural fields.

Enrique García

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Physical intergation projects financed by CAF

CAF share Total investment

(Million US$) (Million US$)

Andean Axis

1. Colombia: Buenaventura Corridor – Bogotá (La Linea Tunnel) 32.0 278.6

2. Ecuador: Amazonian Link with Colombia and Peru (Continental Trunk Road) 93.8 152.7

3. Peru: Rehabilitation of the Huancayo-Hunacavelica railway 14.9 20.0

4. Venezuela: Railway link Caracas-National network 360.0 1.932.0

5. Venezuela: Support to commercial navigation in the river axis Orinoco-Apure 10.0 14.3

Guayana Shield Axis

6. Brazil: Road link Venezuela-Brazil 86.0 168.0

7. Brazil: Electric link Venezuela-Brazil 86.0 210.9

8. Venezuela: Railway study Ciudad Guayana-Maturin (Sucre State) 2.6 2.6

9. Venezuela: Road study Ciudad Guayana (Ven.) – Georgetown (Guyana) 0.8 0.8

Amazon Axis

10. Ecuador: Central Trans-andean link 33.7 54.5

11. Ecuador: South Trans-andean link 70.0 110.2

12. Peru: Road corridor Amazon North 110.0 328.0

13. Peru: Pre-investment region border with Ecuador 5.3 8.7

14. Peru: Central Amazon corridor (section Tingo Maria-Aguaytia-Pucallpa) 3.5 13.6

Peru-Brazil-Bolivia Axis

15. Bolívia: Road Guayaramerin- Riberalta 42.0 45.5

16. Brazil: Road Integration Program (Rondônia State) 56.4 134.2

17. Peru: Road Interoceanic Corridor (sections 2, 3 and 4) 203.5 1.073.5

Central Interoceanic Axis

18. Bolivia: Road Integration corridor Bolivia-Chile 138.9 246.0

19. Bolivia: Road Integration corridor Santa Cruz-Puerto Suarez (sections 3, 4 and 5) 280.0 585.5

20. Bolivia: Road Integration corridor Bolivia-Argentina 314.0 642.0

21. Bolivia: Road Integration corridor Bolivia-Paraguay 60.0 182.6

22. Bolivia-Brazil: Gas pipeline Bolivia-Brazil 215.0 2.055.0

23. Bolivia: Gas pipeline Transredes 88.0 262.8

24. Paraguay: Road Concepción-Puerto Vallemi 38.5 70.0

25. Peru: Road Integration corridor Bolivia-Peru 48.9 176.6

Mercosul-Chile Axis

26. Argentina-Brazil: Border center Paso de los Libres-Uruguaiana 10.0 10.0

27. Argentina: corridor Buenos Aires-Santiago (variant Laguna La Picasa) 10.0 10.0

28. Argentina: corridor Buenos Aires-Santiago (railway variant Laguna La Picasa) 35.0 50.0

29. Argentina: corridor Buenos Aires-Santiago (access to Paso Pehuenche, RN40 and RN 145) 106.7 188.1

30. Argentina: Electric link Rincõn Santa Maria 300.0 623.0

31. Argentina: Electric link Comahue-Cuyo 200.0 414.0

32. Argentina: Program Road Works for Argentina-Paraguay integration 110.0 182.0

33. Brazil: Regional Intergration Program – Phase I (Santa Catarina State) 32.0 50.0

34. Uruguay: Megaconcession in the main links with Argentina and Brazil 25.0 136.5

35. Uruguay: Road Infrastructure Program Phase II 70.0 295.4

Capricornio Axis

36. Argentina: Paving of RN 81 90.2 126.2

37. Argentina: Access to Jama Pass (Argentina-Chile) 54.0 54.0

38. Argentina: Study for the rehabilitation of railway Jujuy-La Quiaca 1.0 1.0

39. Bolivia: Program Road Tarija-Bermejo 74.8 200.0

40. Paraguay: Rehabilitation and paving of Integration Corridors RN 10 and RN 11 19.5 41.9

and complementary works

Hydroway Paraguay-Paraná Axis

41. Studies for improvement of navigation, institutional management and financial engineering 0.9 1.1

for the Argentina, Bolivia, Brazil, Paraguay and Uruguay Hydroway)

Total 3.532.9 11.081.8

Infrastructure integration in South America: stimulating sustainable development [...]

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Physical and Integration Projects Financed

by CAF in the last decade.

Legends

Existing roads

CAF road projects

CAF gas pipeline projects

CAF railway projects

CAF electric link projects

CAF border pass projects

Hydro links

Hydroelectric plant

Country capital

Other cities

Port

Translation: Sérgio Duarte.

Antônio Delfim Netto

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Elections and patience

Antônio Delfim Netto*

ach one of us inhabits two different universes: one, the Economic

Universe, where the individual expects to find a job, to make a living, to support

a family, to count on a steady improvement in well-being, and, at the end of the

day, to enjoy the fruits of honest retirement. Such a universe is basically controlled

by the “market”, but the “market” only exists and operates adequately within

certain conditions and by means of special institutions: respect for private

property, the lawful enforcement of contracts, the freedom for setting prices,

and so on. Furthermore, the market needs the State to guarantee certain public

goods that only the State can provide: a reasonable and expedient judiciary,

security, and a stable currency. The Economic Universe is defined and upheld by

Constitutional provisions that society agreed to establish at some point in time.

Obviously, the “market” does not emanate out of the Constitution. However, it

only works as an efficient tool when the Constitution is market-friendly.

The Political Universe is established by the Constitution, but it is subject

to the humors of “universal suffrage”. At regular, established intervals, each

inhabitant of the “Economic Universe” is called upon to assess his/her life and

* Federal Representative, Chamber of Deputies, Federative Republic of Brazil.

dep[email protected]ov.br

Elections and patience

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

what her/his expectations are about the future. If most people in the “Economic

Universe” live out precarious existences and their prospects are dim, each citizen

will seek out to change it by means of the ballot. How? By choosing an Executive

Power and a Legislative Power which are more committed to the changes that

are desired. Such a choice does not necessarily lead to the expected outcomes. It

is important to understand that the result of universal suffrage depends upon

how citizens perceive the situation to be. It may be “progressive”, if the previous

administration brought about expected changes or generated the expectation

that such changes would be forthcoming in the foreseeable future; it may be

“regressive”, when the citizens’ patience is at an end. In this case, the citizenry

will resort to choosing to support a leader who promises to create a “short-

circuit”, a leader who incorporates society’s dissatisfaction, gives voice to its

indignation, and, therefore, takes over power by means of the ballot box.

Historical experience shows us that the latter solution often leads to

increasing frustration. After a while, and the initial enthusiasm wears down, society

realizes that the “instant salvation” which was promised has brought about more

harm than good. The reason for this is simple: shortcuts are offered to (a tired)

society by enlightened, garrulous, or ignorant leaders who ignore their own

ignorance. Such leaders are successful at the ballot box because society has lost

any hope that their problems will be solved by current economic policy. Such

policy suggests that, after monetary stability is achieved, the “market” will solve

every social problem, which, obviously, is far from certain.

What is happening in most South American countries should be heeded as

a warning by those who would impose an economic policy that only aims at

efficiency and stability, in the belief that this will suffice for the market to generate

an illusory social justice. An economy can be balanced and achieve a maximum

of productive efficiency, even in the presence of the worst imaginable kind of

income distribution. The role of universal suffrage is, precisely, to avoid endowing

such search for economic efficiency through the “market” with an absolute aura.

For the market does not have any moral qualm when it rents out the worker’s

labor as if it were a disposable part or a lease on a parcel of land. It so happens

that the “part” is a thinking being, who realizes the injustices of the world, has a

family – and who votes! The ballot box evens out the relative power of capital

and labor: it is the tool that may lead to achieving economic development which

is relatively equitable.

Antônio Delfim Netto

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

On the market, everyone “votes” according to his or her income and

personal wealth: someone who has got $100, has 100 “votes” to buy goods;

someone who has got $1 million, has one million “votes” to do likewise. Everyone

tries to use whatever income he/she has available in the best way possible. The

hitch is to convince people at the ballot box that unemployment does not exist,

for it is a result of “laziness” of some and that each person receives a “fair”

return on his/her effort – just like “neoclassical” Economics would have us

believe... In Brazil, once every four years (rather every eight years, beginning

with the reelection of Fernando Henrique Cardoso), each one of us is worth the

same at the ballot box: exactly one vote! This ballot erects the political power on

which the workings of the market are to be based. Whenever political power

wrongly (from a theoretical and a practical viewpoint) subjects everything to the

market, as if the market were able to solve all of society’s problems (freedom,

equality, efficiency), there is a risk that universal suffrage will come up with a

problematic outcome: it will elect either a fake or a messianic leader!

Bolivia is a case in point. The country implemented a stabilization program

in 1985, which was widely regarded as “successful”. Since then, Bolivians have

been facing every kind of vicissitude. They waited for 20 years for well-known

leaders to improve their living conditions. Evo Morales may be seen as a sorry

outcome of the ballot box, but his legitimacy cannot be doubted. He is the

product of the universal suffrage of a long-suffering people who lost its patience

and the hope it placed on traditional policies.

The Brazilian case is different. Lula is a charismatic, quite pragmatic leader,

but his rise to power is based on similar causes. After eight years of lackluster

growth under President FHC (a sort of “stagflation”, the malignant combination

of stagnation and a precarious stability), a tired, exhausted people began to

realize that the same, tired promises to the effect that “growth with employment

would come later”, were only so much hot wind. Voters demanded that the

implementation of a “politics of solidarity” be accorded heightened priority, so

that the poor could be better looked after: a kind of provisional policy to aid

the poorest of the poor, while employment is still a promise.

We should not delude ourselves by thinking that we are so much more

patient than other peoples. Beyond erecting support networks for the poor, we

have to look after the development of the economy because if production does

not grow faster, if businesspeople are not encouraged to become their old savage

Elections and patience

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

capitalist selves and invest seriously in the export sector, we will not create that

many jobs for our people. It is never idle to repeat that without stronger GDP

growth, there will not be enough jobs for people who need to work. Nor will we

get tired of repeating that working is still the most efficient way to improve our

domestic income distribution. We need to dispose of the myth that Brazil cannot

grow over 3.5 percent a year without fueling inflation once again. This is a big

mistake that was cooked up by economists who think of themselves as “scientists”

but who are nothing but indentured servants of financial markets who have

never set foot on a factory floor, where common men work in order to realize

their potential. Likewise, there is no contradiction between fiscal balance goals

and larger public investment, which only needs to be well managed. If we insist

on championing “neoliberal purity”, which throws men into the man-eating jaws

of the market, one day the “Moraleses” who are already lurking around the

corner will come out victorious at the ballot box.

Keynes once said that “the economy and economists are not the depositaries

of civilisation, but the possibility of civilisation”. In other words, the knowledge

of the way economics conditions reality and human behavior should help to

build a society where citizens may devote their efforts to legal activities and be

able to reap the benefits of it, a society where they may see the prospect of

improving their well-being, within the framework of relative equality and justice,

and growing GDP and employment levels.

The activity of the economist should be to help society to build mechanisms

that allow for individual freedom, that reduce inequality, and that achieve a high

level of productive efficiency, three goals that are not entirely compatible.

It is because of this that the “market” cannot be trusted to harmonize

them, as neoliberal economists would have it. Either they introduce the ballot

box as a conditioning factor that economic policy must heed, or they will risk

harnessing a miserable defeat at the ballot box. As a Fabian slogan I heard when

I was young had it: “jobs are closed, but the ballot box is open”!

Version: Manuel Carlos Montenegro.

DEP

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

he climate surrounding conversations about Chilean-Bolivian relations

seems to have improved lately. And yet, this does not arouse special expectations

in me, as the history of the relations between the two countries is marked by

brief periods of favorable climate and long periods of disagreement and conflict.

With respect to this particular moment, three circumstantial elements

provide a good starting point.

Chilean elections have led to a fourth Concertación Administration and to

the first post-transition Administration. The first three Concertación

Administrations were tied to a too narrow, quite complicated agenda that sought

to put an end to the legacy – as clear as it was perverse – of the authoritarian

regime, which we Chileans call “the mooring period.” The Chilean democratic

governments inherited a mined field full of traps and very effective juridical and

political constructions that narrowed the margin for the people and the authorities

to exercise their sovereignty – an impressive datum from political comparison

with other Latin American countries that had also emerged from national security

The outlook for

Chile-Bolivia relations

Luis Maira

* Ambassador of the Republic of Chile in the Argentina Republic.

[email protected]

Presentation before Chile’s Friedrich Ebert Foundation’s study group on Chile-Bolivia relations, Santiago.

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

dictatorships. The 1980 Constitution placed at the summit of power entities of

nondemocratic origin, endowed with prerogatives enjoyed by institutions that

were closer to the military regime: The National Security Council, which

personified the Armed Forces’ democratic tutelage over the Parliament and the

Government, which ensured the maintenance of Pinochet as the Army’s

Commander in Chief in the first eight years. This made Chilean transition more

restricted, difficult and complex than any other in South America. With the August

2005 constitutional reforms, we finally came through this precipitous pass and,

in general, arrived at the institutional condition of a democratic country.

Michelle Bachelet’s is thus the first post-transition Administration. This

means that hers is the first government that will not have to spend a significant

portion of its energies in undoing all that was “tightly tied up,” which was left by

the military regime. It will be able to think differently about the use of its time,

spaces, and greater freedom to define its own political designs. This is quite

positive if we add that the December 11 parliamentary elections held together

with the presidential elections substantially increased the room for maneuver the

majority coalition has enjoyed within the bicameral system.

Secondly, the Bolivian presidential elections have put to rest many ghosts

that pointed to the country’s ungovernability. Backed by 54 percent of voters,

President Evo Morales will be able to organize his government in a less

fragmented political setting. Fragmentation had prevailed since the debilitation

early in the current decade of the old party triad – MIR, ADN, MNR – that

handled the situation after the 1985 crisis and permitted the alliances and

agreements that led to stability in the two last decades of the 20

century.

A comparison of the two countries’ situation shows, however, that the

Chilean Concertación’s fourth Administration comes out as enjoying greater

programmatic certainty and wider political margins.

A third key element in my view is the fact that our bilateral relations are

differently perceived by public opinion in our two countries. This is a decisive,

emblematic issue for the people and public opinion in Bolivia, but is nearly

nonexistent to Chileans, for two reasons: first, because maritime aspiration forces

Bolivia into an active conduct while it obligates Chile to nothing – mere

maintenance of the status quo thus seems reasonable to most Chileans who are

not familiar with international issues. Secondly, it has not been possible to instill

in the Chilean people the feeling that this is a priority question that must be

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

solved or that this is a subject that impinges on our international image and not

just a demand imposed on us by another country. This poses a major challenge

that we must meet in terms of political education and the construction of internal

consensus in Chile. The many statements issued from time to time by Socialist

Party leaders and parliamentarians so far have not succeeded in improving this

distant attitude on the part of Chilean public opinion, which does not see the

issue as part of our agenda.

In view of the preceding, I would like to concentrate the focus on some

aspects of the different paths that might be open from now on.

As a starting point, I would like to point out that Chile has yet to formulate

a coherent, detailed policy on our relations with Bolivia. There is no consensus,

owing in large measure to the fact that the people responsible for our bilateral

relations with that country do not see these relations as a complex issue but

rather as a self-solving question. Thus, for example, the diplomats at the Ministry

of Foreign Affairs most inured to the subject believe that one should not be

overly concerned about Bolivia’s maritime aspiration. Accordingly, they say that

Bolivia is capable of strong, consistent policies only when it manages to solve its

more serious political crises. At such times, when it is constructing governability

schemes in respect of administrations that are beginning their work, these

governments – for reasons diplomats associate with a concern over the legitimacy

of their action – assign a much higher priority to the maritime demand at

international forums and in bilateral relations. The diplomats’ perception is that

an active Chilean position gives a thrust to this process, while with the refusal to

recognize it, the issue dies down in accordance with the avatars of Bolivia’s own

internal circumstances: ignoring the demand seems a clever policy for skirting

the conflict. Obviously, this approach does not recognize the urgent need for a

more stable, proactive policy in the medium- and the long run; it simply reiterates

the already known tactical approach that usually works, given the way things

have functioned in La Paz, at least in recent years.

In my view, it is of fundamental importance to insist on the need to have a

consistent, stable Chilean policy that ascribes priority to defining issues of our

neighbor policy, linking the policies we intend to apply to Bolivia to the policies

we intend to apply to Peru and Argentina, two of our three territorial neighbors.

Adopting this policy and moving forward with it is a major pending issue, although

I think that the good relations cultivated in the last stage of President Lagos’s

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Administration have created favorable conditions for addressing this question

during President Bachelet’s term.

The first point that should be clearly made is that we must recognize that

we, Bolivians and Chileans, have the possibly worst neighbor relations among

Latin American countries. This is proven by the harsh, hard fact that only during

ten of the last fifty years we have maintained diplomatic relations – the minimum

two countries could have. Even now, prospects seem difficult for the

reestablishment of the essential link between modern States – Embassies and

regular bilateral relations channels.

At the same time, these two countries that have such a bad relationship

that periodically exploits and nearly destabilizes the binational links – face one

of the most enduring conflicts in Latin America, which has lasted for 121 years.

This controversy centers on a single, major core, namely, Bolivia’s aspiration to

have a sovereign outlet to the Pacific. Apart from Argentina’s claim of the

Falkland Islands, very few issues dating from the 19

century still remain on the

international agenda of Latin American countries in the 21

century. The other

long-lasting conflict, namely the Guatemalan claim on Belize, was resolved many

years ago by the existence of an independent country associated with the

Caribbean Community. Thus, only two old issues remain: Bolivia’s maritime

aspiration and Argentina’s claim on the Falklands. No other problem of the

same magnitude exists. This is thus the oldest, thorniest pending issue between

two Latin American countries. This is why this particular complicating factor

must be urgently recognized.

As I see it, one of the major problems during the moments of fair weather

in our relations is the belief in an instant solution. Suddenly, political leaders

believe that in a very short time they can solve such an old, complicated dispute.

This is usually a poor expectation that ends in disenchantment.

I should explain that I am part of a generation that believed that it would

quickly resolve this issue. Before the 1973 coup, there were many Bolivian youth

leaders studying at Chilean universities. Our human relations were excellent, we

knew each other, discussed about Latin America, and had no doubt that we

would be the ones to resolve with relative speed the pending issues of our history.

But life has taught us that this is no easy task and history has also shown the same,

as on four occasions since the Pacific War we have been close to a solution to

Bolivia’s need for a sovereign port on the Pacific: before the 1903 Treaty, namely,

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

in 1895, in the context of the Argentine-Chilean-Bolivian dispute over Punta de

Atacama; in 1926, with the so-called Kellogg Proposition, put forth by the U.S.

Secretary of State, who, as the Arica and Tacna situation with Peru was pending,

invited the two countries to cede the port of Arica to Bolivia as a way of avoiding

a referendum. Chile expressed its willingness to consider such possibility, although

internal public opinion was very skeptical of this solution; but Peru rejected it

outright and this put an end to the U.S. initiative.

In 1950, former Foreign Minister Alberto Ostria Gutiérrez, who was then

Bolivia’s Ambassador to Chile, and Chilean Foreign Minister Horacio Walker,

under the administrations of Mamerto Urriolagoitia in Bolivia and Gabriel

González Videla in Chile, went ahead with the design a more durable solution: a

Bolivian corridor, a strip of land south of the Concordia Line and to the north

of Arica. Ostria Gutiérrez (and this is also found in detail in González Videla’s

Memoirs), pursued a clear-sighted, extraordinary diplomatic course to arrive at

such a possibility. It finally materialized in a technical formula devised by engineers

and experts in border issues. While this was being worked out, an unfortunate

circumstance undermined the negotiation: González Videla, who was not a

popular ruler and who had outlawed the Communist Party, occasioning Pablo

Neruda’s exile and other well-known issues, visited President Truman in

Washington in 1950 and held a private conversation with him about the issue.

Weeks later, at the Foreign Relations Council in Chicago, Truman held talks with

press people and U.S. foreign relations experts, who spoke to him about the

futility of visits of Heads of State to Washington, saying that it was a waste of

time to receive Asian, African, and Latin American Chiefs of Government in

those Cold War years. Truman replied by pointing out the positive results that

might come out of this process and told them of the negotiations González

Videla was carrying out in private with the Bolivian Government. This elicited

denunciations by the press in both Chile and Bolivia. In a question of weeks, the

two Foreign Ministers had been ousted and the matter had fallen to pieces.

The fourth attempt – the embrace at the border town of Charaña – took

place under Pinochet and Banzer. It would seem that owing to the fact that

negotiations were being carried out by two dictators, that there was no public

opinion to be taken into account, and that the Armed Forces of the two countries

were directly involved, a solution was really possible. The technical design was

the same as in 1950, and the corridor envisaged was nearly the same. The attempt

failed for various reasons, but particularly because of the negative psychological

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

impact, in both Bolivia and Peru, of the Pacific War’s centennial. The dialogue

was resumed in 1986 and 1987 by Presidents Belisario Betancourt and Julio

Sanguinetti, of Colombia and Uruguay, respectively, but conversations did not

succeed either, owing to Admiral Merino’s veto in Chile. A twofold attempt late

in Pinochet’s rule also fell to pieces.

In our sixteen years of transition, we have not come close to any of these

four preceding attempts. The explanation given by those responsible for Chile’s

foreign policy, especially under President Lagos, was the succession of six

governments with which they had to dialogue (first, President Banzer, replaced

by Quiroga, owing to his illness; then Sánchez Lozada, followed by Mesa and

Rodríguez, and lastly, by Evo Morales). This has hindered continuity and a

conjugation of efforts. Another factor is the fact that conversations have been

held in private and this is a point we should consider – whether it is convenient

to hold private conversations or whether it would be more helpful to have a

certain degree of publicity about them and the progress made so as to establish

guideposts for the eventual resumption of conversations.

Henceforward we have to be aware of the times and of the complexities

of this bilateral relationship and keep on working, while thinking of what the

future might hold. In my view, as of 2006, processes should be explored and

developed in a twofold setting: 1) multilateral integration, to which I attach

extraordinary importance for the adoption of measures conducive to mutual

trust, which in turn would allow progress on bilateral issues, and 2) the bilateral

issue proper, which the Chilean Foreign Affairs Ministry calls the “Bolivian

maritime aspiration.”

In this connection, it is worth thinking in terms of a time horizon of five

years. Last year we talked about the Bicentennial time. Bolivia was a real precursor:

its rebellion started in 1809, as it had manifested itself very early, preceding by

one year the outbreaks that led to the independence of most Latin American

countries. But looking forward to 2010 as the emblematic year of the bicentennial

of Mexico, Colombia, Argentina, and Chile and the start of the processes leading

to the emancipation of other countries of the region, we might take it as a

chronological milestone of this effort, which moreover coincides with the

beginning of new Administrations in Chile and Bolivia. We should ensure that

this will be a fertile time for moving ahead on two fronts: multilateral integration

and bilateral negotiations.

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

As regards South American integration, we have made significant progress

under circumstances far better than were those as recently as 2003, for instance.

This change is linked to the maturation of this new historical post-Cold War and

globalization phase, heralded by the fall of the Berlin Wall in 1989 and the end

of the Soviet Union in 1991. The integration process in Latin America, and

particularly in South America, has made far more real progress and lost the

rhetoric, somewhat utopian character it had since the birth of the Latin American

countries. If we had to explain to someone from outside our region what has

happened, we should point out that we have had some very bright national

builders, fathers of our homelands, who understood that we had to counter the

support of the United States of America with a political integration of the South

American countries. This was the perception of Bolívar and San Martín, i.e., two

of the greatest figures of the continent held this view that found its highest organic

expression in the Panama Amphictyonic Congress in 1826, at which it became

obvious that such a prospect was not feasible.

The Bolivarian dream, as we call it, became then a utopian construct, the

ideal of a political association of South American Sates that would counterbalance

the increasing impact and ascension of the North American hegemony in the

northern hemisphere. This gave rise to some significant, generous initiatives that

never materialized into a political project, not even today. And yet, we have

moved through the 19

and the 20

centuries with this living aspiration shared

by the elites and the more progressive groups.

To this first utopian vision of integration, a second one was added in the

century, oriented toward economic integration. This led, after World War

II, to the idea of a Latin American Common Market, embodied in the thinking

of the Economic Commission for Latin America and the Caribbean (Eclac) and

in its 1959 document on a Latin American Common Market. We moved from a

politically united Latin America to a Latin America economically bound together

by productive projects and trade. But similarly to the Bolivarian dream of

political union, the project of Raúl Prebisch and the Eclac founders encompassed

the entire region, an area that extended from the Rio Bravo in northern Mexico

to Tierra del Fuego. Just as the previous project, though, this one did not prosper

and became a constantly shifting goal in a distant scenario, which Latin America

was not able to reach.

Today’s world and the new international system, though, have again raised

the integration issue with more urgency and specificity, forcing us to skip stages

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

and really move forward toward Latin America’s integration in the coming years

– quite possibly independently from the will of governments.

Today we are faced with a multitude of economic, trade, as well as political

agreements that must be interwoven and coordinated. Latin American reality

today consists of subregions and large countries rather than a homogeneous

space as in the 19

century and first half of the 20

century. The real Latin America

of the early 21

century, with its two large countries in the north and in the south

– Mexico and Brazil – which are subregions in themselves – and four markedly

integrated subregional spaces: Central America, the heterogeneous Caribbean

zone, Andean Latin America, and the Southern Cone Latin America, consisting

basically of Mercosur, in which Brazil is both a player and an emerging power

sufficiently large to handle its foreign policy independently from the decisions

of the other area countries. We may thus think in terms of these six players,

which maintain numerous understandings amongst themselves. Many free trade

treaties and agreements are being signed – be they Economic Complementation

Agreements under the Latin American Integration Association (Aladi) or bilateral

or multilateral Free Trade Treaties. A graphic presentation of the forms of

association and understanding among Latin American countries is quite

impressive, as they make up a network of agreements of varying quality, among

different parties and about different issues. And yet, this trend has consistently

grown in the last fifteen years.

Now, in a world characterized by large regions, Latin America must

endeavor to become a region that carries weight in the reshaping of the

international system and steadily move in this direction.

These two driving forces – partial agreements and the need to have a more

dynamic presence on the international stage – have helped to ensure that progress

toward integration is increasingly more consistent. As globalization moves on

from phase one – before September 11, 2001 – to phase two, with the United

States as the global policeman imbued with a new security doctrine involving

unilateral military intervention, accompanied by the neglect of its regional policies,

we find ourselves before a vacuum and a nonpolicy on the part of the United

States toward Latin America. This makes our countries’ association and mutual

support even more important.

This scenario has forced us to take more initiatives than before, which has

led to a proposal that, despite all limitations and unmet challenges, has taken

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

form in the Cuzco Agreement of December 2004 and in the establishment of

the Community of South American Nations, which is holding meetings and

considering the next steps to take.

We know that the process begun in December 2004 is only partially

auspicious. It is obvious that Brazil has lost much of the international initiative

taken by the Lula Administration, owing to its internal crisis. We also know that

old rivalries have come up again within Mercosur, particularly between Brazil

and Argentina, and that there are many unsolved problems. Despite all this, though,

the integration process is a reality and has the possibility of going forward.

The 2005 Bolivian and Chilean elections will have enormous consequences

in 2006 and the first half of 2007, as practically all relevant countries of the

region will have new Administrations. There will be elections in Mexico (July

2006), with the possibility of a significant change from the PAN to the PRD, if

the polls prove true; in Brazil, where we do not expect a change in its foreign

policy of recent years; in Colombia; in Peru; in Nicaragua, whose results can

mean a drastic change, should the Sandinists win this new context. In several

other countries, including Costa Rica, Haiti, Venezuela, and Ecuador, the scenario

is being normalized and updated. Finally, in 2007 Argentina will hold its elections.

This means that we should see the integration process from this perspective,

which is not unfavorable. Taking into consideration the more and the less relevant

developments we will see in Latin America, it is possible that early in 2007 we

will have governments even more favorable to integration than today. If we

handle things well, this may mean progress in this matter. This is the current

context.

Now, as this is a multifaceted context and not one driven by just one factor,

differently from when we were pursuing political or economic integration in the

and the 20

centuries, we are in a good position to plan our more immediate

moves. When we speak of situating the Bolivia-Chile problems in a broader

context, we are speaking of the core of the central part of South America, an

area where six countries or part of six countries come together: the Peruvian

South, the Chilean extreme North, the Argentine Northwest, the Brazilian

Southwest, and Paraguay and Bolivia, the two landlocked countries of the area.

This leads us into another equally interesting but complicated exercise,

forcing us to innovate with respect to focus and coordination of tasks. Special

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

importance must be assigned to the subnational level and the authorities therein.

In the post-Cold War world, a country’s foreign policy is the sum of national

and subnational impulses. It does not depend solely on what is decided in La

Paz, Buenos Aires, Brasilia, or Santiago, but is often linked to the agreements

and understandings that regional players bring to bear on these countries. Once

again, the dynamics are driven by two factors: the countries’ national foreign

policy and the subnational, paradiplomatic foreign policy implied in many

projects. And these are precisely what must be organized in the central part of

South America crossed by the Tropic of Cancer and which forms the Santos-

Antofagasta Ocean-to-Ocean Corridor.

If we look at the actual integration progress that has emerged from the

Cuzco meeting and the encounters of political leaders, public policy

administrators, and above all from Heads of State, South American integration

is the outcome of three substantial agenda items:

1. Physical integration;

2. Social integration, implying attention to social policies and to South

American problems of poverty and inequality; and

3. Energetic integration; and the South American gas pipeline project in

particular.

There may be other important aspects to this picture. But if we were to do

a rigorous, current description of the integration effort and its priority issues,

these three would be the most important.

This means that a first exercise we should engage in if we want dynamically

to inject Chilean-Bolivian relations into this context is to see how these three

factors can contribute to advancing our bilateral relationship.

In these three fields we may find major, decisive issues to give a thrust to

our relations. First, because with each meeting of the border groups we are

learning and making progress as regards projects and methodology. Last year,

for example, in Salta, I took part in a meeting of the Center-West South America

Integration Zone- Zicosur, which had already held eight annual meetings,

attended by the heads of regional governments, called governors by the Argentines

and intendants by the Chileans. Other participants are heads of municipal

governments and civil society representatives, including university presidents,

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

businessmen, and social leaders. This means that at these meetings the private

and the public sectors unite their efforts. This type of dialogue about specific

projects is becoming more and more frequent in Latin America.

At the same time, the countries are working on these issues at a more

official level through “Border Committees,” thereby reinforcing for foreign offices

and governments the issues related to bilateral relations. At these committees

we must address the current dilemmas and the main alternatives before our two

countries as well as before the other countries of South America’s center region.

Looking ahead, we can see that these efforts will determine the extent to which

we can play a dynamic role in the 21

century’s economy and in international

trade in the Atlantic and the Pacific basins, the two largest oceanic basins in the

world. I do believe that as the 21

century progresses, this trend will be reinforced,

as it was already consolidated in the last century’s final decades and shows that

the Pacific Basin is displacing the old dynamism of the Atlantic basin with respect

to the trade performance of productive and technological capabilities. Moreover,

it is worth noting in connection with this area, that the countries of South

America’s center region have a pressing need to enhance their trade with China,

Japan, and India. Although the latter is not on the Pacific, the Indian Ocean can

be accessed through the Pacific.

For the region’s larger countries, this challenge takes the form of a pressing

demand and for this reason I think it is worth referring briefly to the Brazilian

and Argentine projects concerning the Pacific.

In June 2004, President Lula, accompanied by 450 Brazilian entrepreneurs,

visited Beijing and sought to establish agreements to obtain a Pacific outlet for

Brazilian soybean. Brazil is one of the world’s largest soy producers and has to

ship it through Peruvian and Chilean ports to gain in competitiveness and travel

time with a view to moving this commodity in coming years.

At the same time, China found a good opportunity not to be affected by

uncertain availability and rising prices of raw materials owing to its very demand.

Accordingly, it offered to extend credit to Brazil through China’s National

Overseas Engineering Corporation-Covec, so as to ensure the supply of Brazilian

soy in the medium run and, in turn, deliver infrastructure projects, including the

implementation of one of Brazil’s three projects to carry soy produced in the

state of Mato Grosso to the Pacific shore – either the alternative Mercosur

waterway or one of the two other projects that included railway stretches through

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Bolivia by way of Salta to Chilean ports, from where the Brazilian commodity

would be shipped to Asia’s Pacific seaboard with great advantage to the Brazilian

economy and competitiveness. Brazil is willing to consider trading 12 years of

soy supply for railway infrastructure without having to make additional public

investment that would compromise its constrained budget.

Two months later, President Kirchner visited China, accompanied by 300

entrepreneurs and a large portion of his Cabinet, at the suggestion of President

Lula, with whom he had good relations at the time. The Argentine President had

the same kind of conversation with the Chinese Government and the Covec

authorities, this time about the implementation of another ocean-to-ocean

corridor, from Porto Alegre in southern Brazil to the Chilean port of Coquimbo,

instead of from Santos do Antofagasta. This project called for the construction

of a tunnel in the Agua Negra pass, between Argentina’s San Juan and Chile’s

Coquimbo, which would shorten the length and above all the height of the

international route. This route would be passable nearly all year and would provide

an outlet for Argentine soy, produced basically in the central provinces,

particularly in Santa Fé, to be transported on a straight line to the Pacific and

from there to the Chinese market. The Argentine plan would also include an

infrastructure project to be implemented by Covec, with the backing of the

Chinese banking system, on a design by the Chinese government. Argentina would

receive the completed project and repay it with commodities in the coming

years. This project also remains open and various Chinese technical missions

have been working on-site in San Juan.

I have closely followed the conception and intensification of this other

type of experiment. My point is that the idea of specific infrastructure projects

in South America’s central part has long ceased to be a rhetorical issue. With

projects being implemented under the Initiative for Regional Infrastructure

Integration in South America-IIRSA and by governments, there might be good

chances of budgetary commitment to Bolivia’s development. The same could

be said in relation to projects backed by international financial institutions such

as Eclac and Aladi (currently at the study and prospecting stage), as well as the

more concrete work done by the Inter-American Development Bank and the

Andean Development Corporation-CAF, which could contribute more decisively

with financing to ensure the feasibility of initiatives that are of priority interest

to Bolivia and conducive to that country’s progress.

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The fact is that in the central part of South America there is today an

intense infrastructure activity in connection with the ocean-to-ocean corridors

and such projects can be multiplied to the benefit of the six countries. There is

no doubt that the idea of trains and routes running from Cuiabá in Brazil to the

Pacific, through a large extension of Bolivia or through a similar kind of route

by way of Argentina, is an important consideration as regards prospects and

potentialities for the Bolivian economy and the country’s productive

development.

I thus believe that this is a positive issue on which the governments could

work in closer cooperation, in association with international institutions and

organisms, and by cultivating a relationship encompassing both the national

and subnational levels, in accordance with the priorities set by the authorities.

Social policies and combating poverty and inequality are an equally

important issue I have not addressed here. But I should point out that the

territorial focus of projects and resources is a key criterion, as the poverty

problems of Latin American countries, including the larger countries, are

concentrated in specific areas and, in many cases, are better dealt with through

projects implemented jointly by two countries than individually by one country.

This applies also to the Chilean situation. The poverty problems in Tarapacá or

Antofagasta, regions I and II of Chile’s extreme North, would be solved much

better in association with Argentina and Bolivia and with the Peruvian South

than if we treat them solely as another item on Chile’s social agenda. Something

similar occurs with the Brazilian Southwest or Argentina’s Northwest, zones with

great concentration of poverty and inequalities.

Lastly, energy is an issue to be considered, which involves the countries’

sensitivity and sovereign decision; but we should not forget the picture presented

by a report by the Latin American Energy Organization-Olade two years ago:

South America has energetic potentialities that can twice meet the national

economies’ accumulated peak demand. The basic problems are thus a question

of coordination, interconnection, and intelligent use of energetic resources. All

South American countries have thus something to contribute to and something

to gain, on a fair basis, from the rising international prices on today’s energy

market. Accordingly, the project of the South American Gas Pipeline starting

from Camisea, in Peru, is a significant proposal that should provide an outlet

for Bolivian gas as soon as the new government establishes the legal framework

for its marketing abroad.

The outlook for Chile-Bolivia relations

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

In conclusion, I refer to the bilateral handling of the Bolivian aspiration

for an outlet to the Pacific. My view is that if we are capable of signing consistent

agreements for the integration of an area of interest to both Chileans and Bolivians

(which, as far as we are concerned does not involve the entire Chilean territory

but essentially the extreme North), we can also implement these projects. For

this we should adopt mutual confidence-building measures and foster better

mutual knowledge among those responsible for public policies, so that we can

go forward together, without exclusions, in the spirit of the Algarve Declaration

we issued on the occasion of the 2000 Ibero-American Summit. In this same

spirit we should address the issues specific to our bilateral relations, without

excluding the Bolivian aspiration for a serviceable, sovereign seaport on the

Pacific. On all these issues we should move forward through proper channels, as

a two-engine apparatus that finds in the achievement of complementary interests

and in the integration agenda a reason for reinforcing and legitimating our bilateral

relations and the agreements we may establish.

In practical terms, a substantial effort should be directed at arriving at a

constructive relationship with Peru because, as all seems to indicate, an eventual

solution will be in the terms envisaged by the 1929 Treaty and will require Peru’s

consent, similar to the one sought in 1950 and 1975. The only positive result of

the failed 1986 and 1987 attempts, defeated by Chile, was that at those times

Peru displayed a far greater degree of flexibility and willingness than it had in

previous conversations. We should ensure that such cooperation will be

forthcoming for materializing the agreements we may arrive at together.

Furthermore, this work will require sound, consistent agreements similar

to a State policy in both Bolivia and Chile. I would discard outright the possibility

that a Chilean government could, through mere negotiation, sign an agreement

under which it would cede part of its territory. No government in the world

would do such a thing. The process I envisage should involve a referendum or

parliamentarian decision in the two countries, which would sanction the

agreements and endow them with the legitimacy and stability that only the citizenry

could confer on the solution proposed. Otherwise, it would be virtually

impossible to obtain the internal accord the two Congresses could sanction as

an international agreement complementary to the 1904 agreement. Only this

complex course would confer respectability, stability, and a degree of legitimacy

to any agreement the technical teams of Chile and Bolivia may arrive at.

Luis Maira

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

In practical terms, I do not believe this solution would entail too high a

cost for Chile, if we consider the advantages of putting an end to a more than

one century-old dispute that definitely damages our image in Latin America.

Chile has a 4,300-km coastline and the truth is that if the matter should be viewed

as “national generosity,” as The Economist suggested in an editorial of great impact

two years ago, Chileans would be seen as niggard by not favoring such a solution.

The point is that this has to do with the legitimacy of a decision based on

the media’s handling of questions pertaining to Chilean-Bolivian relations. When

Chilean flags are burnt in La Paz or vitriolic editorials are published in Bolivian

papers and immediately reproduced by the Chilean press and at times on

television, this generates massive rejection of any solution to Bolivian demands.

More nationalistic groups find it very difficult to present their views, which leads

to an involution of the attitudes that see in the solution of the conflict with

Bolivia something favorable to Chile’s national interest, and reduces the maneuver

room of those responsible for seeking a more positive solution. Care and

prudence are basic attitudes when considering the agreements.

My view then is that it is necessary to create – through multilateral economic

relations – an environment conducive to advancing our bilateral relations to a

point where a juridical and institutional solution may be finally found, so as to

put ourselves an issue of the past, by solving it early in the 21

century. By working

together, we Chileans and Bolivians may cross out from the list of conflicts this

issue that is an obstacle to South American solidarity, friendship, and integration

and finally achieve lasting peace and friendship.

Version: João Coelho.

DEP

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

rappling with the challenges posed by guerrillas, terrorists, armed cartels

trafficking in illicit drugs, vigilantes, corruption, profound social inequities and

property ownership concentration, Colombia has nevertheless been able to preserve

itself as a democratic State with considerable economic and social development.

How has this been possible?

This is the question often raised by Enrique Iglesias, former President of the

Inter-American Development Bank. In his view, the secret should be unveiled.

This is why I decided to convene a group of academics and entrepreneurs to provide

answers from different perspectives, based on their own research and experience.

The endeavor led to the publication of two volumes totaling thirty-eight chapters.

As the first volume is out of print, and the second will not be sold in bookshops,

this article sums up the main themes addressed by the various chapters, for wider

dissemination.

Colombia’s strengths

Fernando Cepeda Ulloa*

* Former Minister of State of the Republic of Colombia, and Professor at the University of the Andes,

Bogotá, Colombia.

[email protected]

Fortalezas de Colombia I, Ariel, IADB, 2004, Fortalezas de Colombia II, Cuéllar Editores, Cociencias, 2006.

There is an English translation of the first volume, sponsored by the IADB. This article reflects in large

measure the two lectures given by the author as an introduction to the two volumes on Colombia’s Strengths.

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The two volumes focus on the historical development of a country that

like many others has earnestly endeavored to establish institutions, shape a national

identity, protect minorities, promote women, and introduce, reinforce, and

consolidate democratic procedures that are continually reformulated. Riddled

with adversity and shortcomings, Colombian society has striven after economic

growth and for distributing this growth among its different segments. There has

been progress, backslides, recovery and, there is no denying, injustices and deep-

rooted inequities.

And yet Colombia has strengths that range form creativity in different

fields of knowledge to the accomplishments of Colombians in sports and the

originality of its music, in addition to the country’s long-standing commitment

to public education, the persistence and importance of the regional press, and

the civilized and civilizing answers to violence: the public libraries network, the

significant examples of civil resistance against violence, and the public forces’

contribution to the strengthening of our democratic institutions.

A brief overview of the authors’ valuable, original contributions will

familiarize readers with thoughts and data that should be better known by all.

As portrayed in the two volumes, Colombia is much more attractive and

interesting, as well as deserving of just admiration than the picture usually

presented. True, the country is not free of major flaws, injustices, and inequities.

But these intellectual contributions offer us a more complete picture, richer in

nuances. Accordingly, more positive, noteworthy aspects of Colombian reality

are brought into greater relief than in customary presentations of our historical

development.

Of course, the subject cannot be dealt with in its full dimension here, but

each author calls attention to factors that have not received the degree of

consideration they deserve for a better understanding of our reality. The truth is

that Colombia has been able to maintain democratic governance despite the

notorious frailties of the State, the Government, civil society, and the citizenry.

The intent is to show that Colombia has – with both successes and failures

– faced up to the critical situation in which it has lived, which has been particularly

acute in the last quarter of a century. This has been possible owing to traditions

and institutions that have not only survived the severe challenge of many threats

but also transformed and strengthened themselves in the process through

democratic reforms as answer to the crisis.

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Despite the controversy that still persists about its meaning and impact,

the best example of this was the drafting and implementation of the 1991

Constitution. The product of a deep crisis, it was also the result of an extensive

self-criticism process, determination to change, and popular participation

(Cepeda, 2003).

Its drafting had the participation of the Executive, the Judiciary, civil society

in its various manifestations, and several former guerrilla groups that had

reintegrated themselves into civil society and availed themselves of this opportunity

to participate in the conception of new institutions. The Constitution’s

implementation and development, which have not been free of backslides, flaws,

and inconsistencies, have been characterized by vigorous debate and broad

participation. Although it was the fruit of consensus, the 1991 Constitution elicits

no unanimity. It still has some opponents, some of them implacable.

As I expressed at the First Congress on Latin American Political Thinking

(June 29-July 2, 1983), the 1991 Constitution was a response to what I then called

the challenge of the future. It established an institutional framework combining

efficiency and political responsibility, participation and institutionalism. It put in

place a different political setup incorporating new political tendencies and

established new rules of the game to allow broader participation. It sought to

open up the political process to a harsher but nonviolent game. It attempted a

prescription for doing away with armed conflict without precluding but rather

strengthening a pluralist political life. In brief, it maximized consensus at the

same time it allowed a civilized, pluralist political conflict.

This explains why to this day it is the new political forces, such as the Polo

Democrático Independiente, that defend the 1991 Constitution and oppose attempts

to deform it. Other sectors abominate it. My view is that the precarious

legislative development accorded it in subsequent years has hampered the 1991

Constitution’s full implementation. Some adjustments are needed. The

Constitutional Court has been the guardian of its spirit and enforcement

(Cepeda, 1984).

Cepeda, Fernando. Colombia: The Governability Crisis, in Dominguez, Jorge I. and Shifter, Michael, Constructing

Democratic Governance in Latin America, second edition, The Johns Hopkins University Press, Baltimore, 2003.

p. 193 ff.

Cepeda, Fernando . Pensamiento Político Colombiano Contemporáneo. in Congreso de la República, in Primer Congreso

del Pensamiento Político Latinoamericano, Tomo II, Volumen V, Caracas, 1984. pp. 561. See also Cepeda 2003.

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The civil eclectic tradition

Civil tradition in Colombia? In its first century as an independent country

did not Colombia experience nine general wars and 54 local revolutions? Malcolm

Deas, the distinguished Oxford historian, addresses these questions in a work

that in a highly synthetic form follows the course of our history from colonial

times to the present. For him, one of Colombia’s unique features is the absence

of wars with neighbors or imperialist interventions and this contributes to the

persistent internal conflicts and the historical weakness of the public forces. He

unhesitatingly asserts that the country has indeed had a civil tradition and that

this is a strength deserving of a chapter in any book. But Deas sounds a strong

caveat as to how, when, and where this civil tradition has failed and proved

incomplete. The predominance of civilians does not necessarily imply tolerance,

he says. And here lies the problem that has plagued Colombia. After reviewing

nearly two centuries of history, Malcom Deas states that a true civilian has to set

limits to his hatreds and ambitions so as to preserve civility. This has not always

been the case. To this is added another shortcoming of civilians, namely, their

shortsightedness in relation to the law and order structure that the country has

lacked. Deas believes that some civilians are more civil than others in a culture in

which the military has been politically and socially subordinate, and adds the

revealing observation that tolerance is a virtue less common among civilian

politicians than among the military. In his view, the most dangerous aspect of the

Colombian system was the sectarian politicization of the people, which reached

a depth and breath seemingly unrivalled in Latin America. The obvious conclusion

is that the problem was sectarianism, not militarism.

On the basis of his extensive, enviable knowledge of the history of

Colombia and of other countries of the region, Professor Deas also comments

on Colombian eclecticism. In his view, the eagerness to have access to a broad

culture has been a leading thread in the national cultural history. He mentions a

letter from general Santander in which the general stresses that he and his

correspondent were in Cundinamarca and not in Dinamarca (Spanish for

Denmark) and questions the usefulness of reading the economists of the time,

of Filangieri, Say, Adam Smith. His tone seemed to express pragmatism, doubt

rather than rejection, as suggested by his mention of an Italian, a Frenchman,

and an Englishman. Deas saw in this an admirable example of eclecticism and

viewed it as a strength, which may often lead to wisdom. This intellectual

eclecticism as regards external influences on national thinking can be seen in

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

many fields is pointed out by Deas, who seeks to show how cultural geography

contributes to this characteristic, establishing a comparison with other countries.

At some point in his work, Deas concludes that Colombia is a country without

theories, without official assumptions about its being, which are more noticeable

in Mexico.

The elections tradition

Since independence, there has been an intensive, prolonged elections

schedule, which could be a sufficient indicator of the central role played by

elections in the shaping of power in Colombia. This is historian Eduardo Posada

Carbo’s keen observation. According to him, this is a “long-standing, persistent”

tradition. The system has been competitive from the very origins of the republic

and this has given rise to various political organizations vying for power. The

course of history leaves no doubt about this. The peaceful transfer of power is

part of Colombia’s democratic history. Male voting was adopted early on, in

1853. Election rules are inclusive. Inclusion, however, has had ups and downs; it

has followed a bumpy course. In 1936, all restrictions to male voting were lifted.

In 1957, women’s voting was introduced, although it had been temporarily

adopted in the Velez Province in 1853. Third parties have challenged the two-

party system and there have been conquests and failures in this connection. In

Posada Carbon’s view, a culture of electoral litigation exists.

The freedom of expression tradition

Historian Jorge Orlando Melo says that since the first Constitution – the

1811 Cundinamarca Constitution – freedom of the press has been recognized

as one of the citizen’s rights, although within some limits pertaining to dogma

and obscene issues. Throughout Colombian history, according to Melo, efforts

by different governments to curb criticism or to bring the press under control

have consistently failed. He also shows how in recent years major, more dramatic

efforts to restrict the freedom of the media come from social groups and not

from the Government, and points out that the true tragedy suffered by the

Colombian press results from violence perpetrated against journalists by social

groups and not by governmental agents – drug cartels, guerrillas, paramilitary

groups, and other forms of criminal organizations. In general, though, freedom

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

of expression has not differed much from what happens in European

democracies.

The party tradition

Colombian parties do not stand out as the most disciplined in the region.

They are the product of one of the most individualistic systems in the world.

However, inter- and intra-party competition has not hampered legislative output.

Congress has played a major role in maintaining democratic institutions and is

one of the most institutionalized in the region. Moreover, together with the

parties at the national level, it constitutes one of the most important institutional

strengths – the civilian essence and the tradition of democratic institutions. Such

is the conclusion of Mónica Pachón in her comparative study of political parties

and the Congress.

Civil society

Colombian civil society has played a determinant role at key moments of

our history. Fernando Carrillo describes a paradigmatic case. A public order

crisis experienced by Colombia owing to narcoterrorism was given a political

solution – who would have believed it – through popular participation

encouraged by an ad hoc student movement in a country where student federations

had lost significance. Carrillo’s work shows how formidable obstacles, including

legal ones, were overcome for arriving at a legal solution to the crisis. This political

process fits into the 1989-1991 popular mobilization phenomena that brought

down the Soviet regime. In Colombia, this imaginative student movement

impelled by a generational spirit of change brought down the wall raised by

Article 13 of the 1957 Referendum as it permanently prohibited the realization

of a referendum. Not even President Barco, whose initiative had the support of

90 percent of public opinion, was able to overturn it. However, President Barco’s

attempt set an important precedent for this generational movement that sought

to promote new political institutions.

The juridical tradition

If something that, notwithstanding shortcomings and occasional attitudes

that might suggest the opposite, reveals the Colombians’ attachment to the rule

of law is the “juridical review”, known among us as the control of constitutionality.

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

This becomes quite clear in the scholarly work of Justice Manuel José Cepeda,

which offers an overview of the practice and development of this juridical

guarantee in Colombia.

Suffice it to cite its major conclusions about the role of the Constitutional

Court in ensuring the supremacy of the 1991 Constitution:

• The Court has had a substantial role in strengthening the Rule of Law

and in the transformation of the juridical system as a whole;

• The Court has had a noticeable impact on the political field. It has

helped change social conflicts into constitutional problems and thus to

the peaceful solution of conflicts within society;

• The most significant constitutional discussions in recent times have been

conducted by the Court, particularly in four areas:

• Multiculturalism and the right to collective difference;

• Demand for social rights;

• Protection of the weaker party in the application of fundamental

rights in private relations; and

• Affirmation of fundamental rights.

Justice Cepeda concludes by saying that Colombia has enjoyed a centuries-

old, uninterrupted tradition of juridical defense of the Constitution’s pirmacy.

He does not gloss over periods when this power was timidly exercised. Nor

does he pass over the fact that there have been court decisions aimed more at

legitimating power than at controlling or limiting it. In his view, however, the

essential thing is that for a whole century constitutional control has been exercised

with independence, in a higher or lesser degree according to the times. He also

thinks that the 20th century shows an ascendant constitutionalism and that

constitutional control, formerly focused on solving the conflict among

government branches, has become a guarantee of the effectiveness of

constitutional rights and has thereby helped maintain democracy and the peaceful

solution of conflicts.

Fernando Carrillo shows the new economic model envisaged by the

Constitution, whose Article 13 sets the cardinal principle of equality and provides

the basis for major as well as controversial jurisprudence cases. He also shows

how the Constitution obliges the State to assign priority to public expenditure in

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the social area as another expression of the social Rule of Law that permeates

the new statute.

Carrillo says that one of the Constitution’s strengths is the fact that it has

added public services to the State’s social purposes. The definition of the control

bodies (the Public Prosecutor’s Office, the Attorney-General’s Office, the Public

Defender’s Office, the National Comptroller’s Office), as independent,

autonomous bodies. He further observes that to be effective these institutions

must function as a “network of relatively independent powers.” He stresses the

meaning and import of the Constitutional Court and describes the mechanisms

adopted to rationalize the functioning of the Executive and the strengthening of

the Legislative. According to Carrillo it is very easy to demonstrate how the

major achievements and strengths of the 1991 Colombian Constitution can be

proven by those that used to have no voice or rights, as they were excluded from

the system and marginalized. Innovative instruments adopted in Colombia are

the expression of a modern social rule of law.

The Colombian ethnic and racial minorities, particularly since the 1991

Constitution, have been a valuable, essential component of Colombia’s

nationhood. Psychologist Mala Htun makes a significant contribution to the

understanding of these minorities’ position througout our history and today.

She raises intriguing questions about the unequal treatment they have been

accorded and attempts to answer them. She points out the weaknesses in public

policies aimed at these minorities as well as the strengths Colombia could draw

from better oriented policies. Mala Htun brings her work to a close by saying

that “defending the rights of citizens that are marginalized and underprivileged

is not incumbent only upon the legislators that represent the minorities; it is an

ethical imperative that obligates all the members of the political society.”

Mala Htun points out that in no other country have ethnical and racial

groups been more successful in achieving representation in Congress. And she

raises the question: Why have the indigenous groups fared better than blacks?

She recognizes the differences between the two groups and the different solutions

they demanded. She adds that it is easier for the government to grant rights to

smaller groups. In her view, political reforms that improve the minorities’

representation may be harmful to the country as a whole.

Colombian foreign policy is also informed by a long-standing legal

tradition and is “based on the defense of international law,” as Rodrigo Pardo

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

writes. In his long article, Pardo says that “another major thread of foreign policy

is the concern that relations with the rest of the world should strengthen the

democratic system”. The weak Colombian State has not looked for reinforcement

in police forces. It has sought international alliances capable of helping it to face

its great enemies: communism in the sixties and seventies; the drug problem in

the eighties and nineties; and terrorism in the 21

century. Colombia has favored

the peaceful solution of conflicts pursuant to international law. The adherence to

extradition of powerful, criminal mafia enemies indicates how, in the midst of

upheavals and challenges, it has adhered to law and to compliance with its

international commitments.

In view of the preceding, no one should be surprised at Pardo’s conclusion

that “the United States has been Colombian foreign policy’s vertebral column.”

The reason for this is that the three major historic threats to Colombian democracy

– communism, drugs, and terrorism – have been major or rather fundamental

lineaments of the foreign policy of the United States.

The environment

Various studies point out that the Colombian State’s capacity to protect

the environment as one of the greatest in Latin America and in the Caribbean, a

view emphatically expressed by Manuel Rodríguez Becerra. In the nineties,

according to him, Colombian reinforced its environmental institutions and

policies. One can hardly grasp the fact that Colombia ranks 36

among 122

representative countries for its economic and environmental importance.

Colombia ranks second among the 12 countries with the greatest biological

diversity. And yet, as Rodríguez asserts, the progress achieved has not been

sufficient to reverse the inertial trends of destruction of the natural assets, owing

in large measure to population growth and to the prevailing development models.

In addition, the armed conflict sets limits and poses unique challenges to

environmental protection.

Economic and social development

Colombia was a singular case in Latin America with respect to economic

development in the eighties. It was in this period, known as “the lost decade,”

that Colombia experienced the highest growth rate as compared with the other

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Latin American countries. Such positive indicators are brought into focus by

Carlos Caballero and can be thus summed up: “the Colombian economy

experienced sustained growth at an average 4.5 percent a year between the thirties

and the close of the 20

century.”

Colombia shares with Brazil and Argentina the reputation of having the

largest number of competent professionals in the higher business echelons. This

is so much so, that the country has become an exporter of qualified human

resources. Health coverage rose from 23 percent to 55 percent of the population

in 2002, owing to Law 100 of 1993. Nevertheless, as Caballero points out, there

are shortcomings in control and vigilance as well as limitations to the system’s

financial sustainability. Accelerated urbanization (39 percent of urban population

in 1951 as compared with 72 percent in 2002) has put strong pressure on the

demand for housing and the deficit of housing units is estimated at two million.

Data show that 3,228.751 urban families are not homeowners. The Uribe

administration’s “Housing of Social Interest Program” seeks to meet the housing

demand, not without difficulty.

The tendency toward poverty reduction, as Caballero explains, points to

continuing improvement in the long run, despite a marked setback caused by

the economic crisis in the late nineties. Between 1980 and the mid-nineties there

was remarkable progress, but by 1999, indicators had fallen to 1988 levels, owing

to the economy’s contraction and to higher unemployment rates. New studies

lead Caballero to believe in promising expectations. For example, the percentage

of families living in poverty and in extreme poverty declined between 1973 and

2003, both in urban and in rural areas and between 1993 and 2003 the quality of

life index improved countrywide.

As Caballero puts it, “an economy that has had the capacity to grow and

generate social progress with stability has the strength to face the challenges of

the coming years.” With greater reason this will come to pass if Colombia

overcomes the various manifestations of violence and appropriately integrates

itself into the international context.

This assessment should be complemented by two cases of entrepreneurial

organization. One is described by Gabriel Silva, the general manager of

Colombia’s National Coffee Growers Federation, who shows how the coffee

sector was an engine of growth and of social, economic, political, and institutional

development, as well as a regional integration factor.

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

It is a well-known fact that coffee used to be Colombia’s main export. In

1925 it accounted for about 75 percent of total exports. In the eighties it still

accounted for over 40 percent. Today, this percentage is down to only 7 percent,

as a result of diversification. The important thing to stress is the coffee sector’s

capacity to generate an institutional environment that, as the title of Gabriel

Silva’s essay indicates, is a model of equality and stability in Colombia’s rural

sector. “In this institutional quality of the coffee sector lies one of the country’s

greatest strengths (…) the Coffee Growers Federation is an organization that

had the capacity to take advantage of its private, democratic, and participative

nature to associate with the State for attaining collective welfare levels which

otherwise would not have been possible (…),” as Silva’s concludes. He does not

hesitate in affirming that coffee is the product that had the greatest distributive

impact in rural areas, owing to its economy based on small and medium-size

producers, with higher levels of civic interaction, political participation, and

quality of life than the rest of Colombia’s agricultural sector and other comparable

coffee economies. The coffee growers’ model of institutional, political, and social

organization deserves greater attention even on the part of Colombians, as it

may serve as a model for many major productive projects likely to contribute to

the post-conflict era that has already started.

The second model is provided by a more recent organization devoted to

the exploitation of the African oil palm. Entrepreneur Rubén Darío Lizarralde

shows how peasants, State, entrepreneurs, and bankers can establish effective

alliances that lead to coexistence and peace as well as productivity and

competitiveness. This is the noteworthy, original experience of Indupalma, a

project implemented in a conflict zone, whose innovative aspect is not so much

the distribution of the sparse existing wealth but the generation of new wealth

and its equitable distribution. This peace and development alliance is tantamount

to a private-sector implemented agrarian reform, which has made 300 new

landowners, given rise to oil palm crops, and provided employment for 300

new workers, all of them imbued with an entrepreneurial spirit. Social equity has

been created and a sustainable productive environment has been established in

an area where the climate of violence was not conducive to the communities’

integration.

This model can be replicated in other Colombian zones and for other

crops. It points to the possibility of new productive projects that would open

attractive opportunities in the post conflict era Colombia is already experiencing.

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

There are opportunities for both national and foreign investment, as well as for

international cooperation, as 70 percent of Colombia’s farming land is not in

production. As Rubén Darío Lizarralde says, sustainable economic development

axes could be created in the rural zone, with economy of scale and competitive

production, through the promotion of crops such as oil palm, cocoa, rubber,

coffee, timber, and banana and other fruit crops. The management and equality

models are visible and have proven successful.

The entrepreneurs’ role

Carlos Dávila and Roberto Gutiérrez address the role of entrepreneurs

and their significance in our history. Dávila presents a historical view of their

significance, stating that they are neither heroes nor villains. His starting point is

that entrepreneurial history is part of society’s history. He revises the notion of

Colombia as but a coffee-producing country, pointing out that there was

remarkable entrepreneurial activity before coffee. He also opposes the theory

that sees the entrepreneurial spirit as virtue nearly exclusive to the Antioquia

province and states that one trait of Colombian entrepreneurship is its marked

regional basis and identity. He also focuses on the major role played by Syrian-

Lebanese immigrants. Dávila then points to other distinctive characteristics of

Colombian entrepreneurship through the 150 years of its history, which can be

thus summarized: a high degree of diversification – “don’t put all your eggs in

one basket;” close relations with politics and the State; few immigrants but some

notable entrepreneurs among them; and the family’s importance and persistence

as an entrepreneurial agent.

As an answer to the question that gave rise to the two volumes about

Colombia’s strengths, Dávila recalls “that Colombia’s economic performance

stands out in the Latin American context for the prudential control of the

economy on the part of a group of well-qualified Colombian entrepreneurs and

technocrats who throughout the 20

century prevented hyperinflation, serious

fiscal deficits, and excessive external indebtedness.” He alludes to some behaviors

he classifies as “juggling between the legal and the illegal,” a ballast that affects

the rules of the game. He further stresses the entrepreneurs’ tenacity in adapting

to the internal armed conflict conditions and point to the “formation of new

entrepreneurial sectors of different origins, which warrant speaking today of a

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

entrepreneurial middle class that has sprung up with force in many economic

sectors and practically in every region of the country.”

Roberto Gutiérrez and Enrique Navarro show the progress entrepreneurs

have achieved in devising new approaches to alleviating poverty and inequality.

They point to the Colombian private sector’s contribution by both profit-oriented

and nonprofit entities. After explaining the modern concept of a social enterprise,

they present four examples to show the factors that contributed to their

consolidation and the results achieved. They start with the Social Foundation

established in 1911, stressing that this foundation owns enterprises and not the

opposite and that its reason of being is “to change the structural causes of poverty

in Colombia.” Although the authors do not dwell on the detailed characteristics

of this extremely interesting institution, they adduce four experiences: Profamilia,

a nonprofit organization, devoted to sexual and reproductive health; Finamérica,

a commercial enterprise engaged in micro credit; La Equidad Seguros, an insurance

cooperative; and Colsubsidio, a nonprofit family subsidizing organization engaged

in health, education, leisure, social marketing, credit, and housing programs.

They show that “the structuring of these organizations as social enterprises has

managed to change Colombian society.”

The role played by entrepreneurs, both male and female, in the construction

of a more equitable society in Colombia would be incomplete without reference

to their philanthropic activity. Unfortunately, entrepreneurs seem to have taken

too seriously the gospel dictate not to let one’s right hand know what the left

hand does in respect of generosity. There is thus no proper record of the number

of foundations, their resources, and history. Beatriz Castro has worked on this

issue and despite scarce research available she makes an evaluation of this activity

that harks back to colonial times.

Colombia has more than 5,400 NGOs whose financing is as follows: 39.5

percent comes from their own resources; 23.3 percent from government funds;

and 24 percent from donations. Colombia stands out for the fact that most

NGO funds come from corporations and entrepreneurial foundations – 14.9

percent as compared with 10.4 percent for Latin America. These are some figures

presented by Beatriz Castro. She points out that in recent years, as the Colombian

conflict intensified, so did the work of philanthropic organizations, particularly

those of a humanitarian nature. There are also noteworthy generous gestures by

figures such as the painter Fernando Botero, who has made several donations to

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the Antioquia Museum, the National Museum, and the Bank of the Republic.

However, this is a matter the entrepreneurial community should bring into relief,

as so much discretion does not help, particularly when reviews often fail to do

justice to this sector.

Cultural diversity and the emergence of a new

accountability culture

Historian Gustavo Bell focuses on another Colombian paradox: the

persistence and wealth of different cultural manifestations that range from folk

music to the theater and reaching to the extraordinary mass events which express

the Colombians’ poetic sensibility, despite the harsh reality reflected in so many

expressions of violence.

Bell says that Colombians have never faltered in their endeavor to construct

a gentler, more cultivated country, as witness the varied cultural agenda in the

capital as well as in the different regions. Some random examples of this activity

corroborate this view – the Manizales and Bogotá festivals have become a cultural

feast; the new version of the Manizales festival, with theatrical groups from five

continents has been attended by over 2.5 million spectators. The International

Poetry Festival has had the participation of poets of over 70 countries from all

continents. This festival’s next edition will be attended by 72 poets from 52

countries. With respect to reading, figures are impressive: in 2000 some five

million people visited the various public libraries; this number doubled in 2003.

Bogotá’s Luis Angel Arango public library is the world’s most visited public

library and maintains the most diversified and extensive home page in Spanish

on the Internet.

With respect to music, the vallenato has acquired national status, with

international repercussions. García Márquez, the Colombian Nobel prize winner

for literature says that his famous work One Hundred Years of Solitude is a written

vallenato and that this music style was the source of inspiration for his writing.

The Colombian musicians Carlos Vives, Shakira, Juanes, among others, have

won international recognition, which is expressed in coveted international awards

as well as in million sales. The same can be said of dance and other genders that

begin to cross national boundaries.

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Bell also finds that the starting point for all state cultural support policy is

the diversity of manifestations in the different regions and relates it to one of the

new 1991 Constitution’s fundamental principles—recognition and protection

of the Colombian nation’s ethnic diversity, although this diversity was already a

consolidated fact. Bell concludes by saying that Colombia is just now discovering

itself in its cultural wealth, disturbed as it may be by a violent context. Adverse

as this environment may seem, cultural manifestations do enjoy a healthy vigor.

Historian Adolfo Meisel squarely asserts in the first paragraph of his essay

that “the existence of different, clearly differentiated economic regions is one of

Colombia’s strengths today. On the one hand, these regions have imparted a

more fluid dynamics to interregional relations than a bipolar division would

have done. Another advantage is that crises that affect one zone’s economic base

do not necessarily have major effects on the whole economy. Moreover, this has

allowed the regional economic elites to have a multiplicity of interests, thereby

contributing to the existence of intertwined segments in the pressure groups (...),

which helps them to moderate the positions they defend.” According to Meisel,

caudillismo took root in Colombia precisely because of this physical fragmentation.

He believes that “the regions’ economic strength is one of Colombia’s enduring

strengths.”

Patricia Londoño Vega has undertaken a thorough historical research that

unveils the characteristics of Antioquian society, which so many others have

attempted to identify. In Putnam’s manner, she shows an intricate network of

organizations, associations, and societies that has woven the complex social fabric

that has made Antioquia one of Colombia’s most vigorous, enterprising regions.

To the surprise of many, the author shows how the Catholic religion was a

modernizing factor in that society. She concludes by pointing out how these

socio-historical antecedents could explain this Colombian region’s capacity not

only to endure the onslaught of guerrillas, paramilitary groups, and criminal

cartels but also to recover, as witness its current economic, political, social, and

cultural indicators. She writes that “Its past, compact sociability, and relatively

smooth ties binding the private sector, the government, and an institution as

important as the Catholic Church in that period (…) may have played a larger

role than is usually recognized in the region’s response to the challenges posed

by recent difficulties. It may be time to do them justice: worse levels of social

disintegration might have resulted from a different history.”

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The Antioquia case clearly shows the role of associations, the high regard

for education, the women’s role, and the influence of European religious orders.

The traditions already reviewed and others that have not been considered

help explain the emergence of a modern, broader political understanding of

citizenship, a keener civic spirit, a demand for accountability on the part of the

authorities, and the pursuit of peaceful solution of conflicts. This is the view

expressed by David Spencer, for whom Colombia’s cultural changes should

accompany structural changes, if the system is to function. Spencer asserts that

in Latin America Colombia provides the most extraordinary example of the

emergence of a new political culture that may contribute to a better functioning

of its democratic structure of such long-standing tradition.

Spencer describes the emergence of this phenomenon and compares it

with what occurs in other countries and regions. He ascribes this situation to the

possibilities open by the 1991 Constitution. For him, the former M-19 combatants

rendered a valuable contribution when they assumed municipal governments

and implemented the vision they had helped introduce into the new Constitution.

In his view, the most successful of them were Antonio Navarro Wolf, as mayor

of Pasto, and Rosenberg Pabón, as mayor of Yumbo, near Cali. Both mayors

rendered accounts before the citizens, gave them power, and significantly

contributed to the improvement of their communities. Also, independent

politicians, such as Antanas Mockus, a son of Lithuanian immigrants and former

President of Colombia’s National University, who made integrity, honesty, and

austerity as well as the construction of citizenship into a genuine concern of all

citizens. For Spencer, Enrique Peñalosa, another successful Bogotá mayor, and

Alvaro Uribe are continuators of these efforts, who are creating a new political

culture. This is a remarkable, unprecedented achievement in a country that has

lived in the throes of violence that has plagued Colombia in the last lusters.

The theoretical principles and the mechanisms used to make possible the

construction of a new citizenship in Bogotá’s case are expounded by John

Sudarsky, a pioneer among us of academic works dealing with social capital

development. He adduces specific examples: the water conservation campaign;

respect for the law and its universal application; respect for life; appreciative

public information, i.e., information that acknowledges the progress achieved

and not so much the shortcomings. According to him, key phrases have served

for the collective codification of these issues: “building on the already built,”

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

“don’t ask in private that which cannot be asked in public,” etc. These battles for

a new citizenship require more appreciative communication and less “failure

mania.”

In 1940, three U.S. geography teachers claimed that Bogotá was the most

inaccessible capital in the world. In 1980, the French newspaper Le Monde

published a book profiling a dozen cities. The chapter on the Colombian capital

was titled Bogotá: La Peur (Bogotá: The fear). At about the same time, a French

woman architect published a short novel followed by an essay titled Bogotá: Jungle.

She described a sordid world of urchins, victims of drugs. Julio Dávila recalls

these assertions and compares them with those published decades later by a The

New York Times correspondent saying that Bogotá had never been better. A year

later, The Washington Post would qualify Bogotá as a “pleasant anomaly” on a

continent “whose capital cities are often horror stories.” All this serves Dávila as

a background for explaining Bogotá’s transformation.

The author, a London University professor, wonders about what had

happened in the Colombian capital to occasion such a radical turnabout in the

perception of its citizens and occasional visitors. What triggered the changes

that have recently earned Bogotá international prizes and elicited such favorable

comments from experts? Dávila’s essay seeks to go further than circumstantial

assessments. Without neglecting the role played by successive municipal

administrations, he shows that this transformation is grounded on a series of

profound social and physical changes that have occurred since previous decades.

He points out that there were national but principally local institutional

foundations which municipal governments knew how to bank on in innovative

ways, with the citizenry’s crucial backing. This perspective reinforces Spencer’s

and Sudarsky’s conclusions and does justice to other aspects of the process.

Women’s promotion

There is increasing recognition of the undeniable progress Colombia has

made in promoting women. Particularly relevant has been the work done by The

Women’s Leaderships Conference of the Americas, especially as regards women’s

access to government and public administration positions.

The chapter written by María Consuelo Cárdenas focuses principally on

the role women now play in the Colombian entrepreneurial sector and in particular

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

on how they are harmonizing this work with other spheres of their vital activity.

For Cárdenas this behavior fits what French philosopher Gilles Lipovetsky calls

“the third woman.” She says that Colombia is the country with the largest

percentage of women executives in Latin America. They occupy this position

owing to their professional training and excellent performance. Colombia is

undeniably an exemplary country in this respect. A particularity brought into

relief by the author is the rejection of an alienating work ethic that loses sight of

other personal and family values. With their practices in daily life, she says, our

female executives are questioning the “work ethic.” Many of them are willing to

“resign and quit working” if this is he only way to protect their own lives and

family relations. They thus question work’s absolute importance, its schedule,

and demands. One of our country’s strengths, according to Cárdenas, is the

balanced leadership style Colombian women are establishing and the equilibrium

they are striking between home and job.

Answers to some threats to democratic governance

Ricardo Santamaría describes the characteristics of the expressions of

violence Colombia has endured and shows how in the course of seven

administrations (since 1981) government and society have kept an open attitude

for reconciliation, a generosity trait. He explains how under the Barco and the

Gaviria administrations several insurgent groups (Ml-19, Quintín Lame, EPL,

etc.) reintegrated themselves into civil life and into the political struggle, and the

difficulties that have hampered negotiated political solutions with the FARCs,

the ELN, and the Autodefenses. He points out how the illicit drugs business

catapulted into power illegal armed groups and exacerbated other problems.

Then he describes the most recent peace processes and suggests what may lie

ahead. “What we Colombians know is that never, no matter how great the

challenge, terrorism will be able to overcome society and its institutions (…)

and we also know that the peace processes in Colombia have been the best

learning experience for democracy. They have heightened tolerance and expanded

the political space. Those who have participated in them have demonstrated

that the force of their ideas is superior to their weapons. Thus, what Colombian

society has done has been the deepening of democracy for the construction of

peace and in constructing peace it has found the way to go on improving

democracy.”

Colombia’s strengths

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The Spanish analyst Román Ortiz, who lived in Colombia in 2003-2004,

makes a careful personal reflection about the factors that converted Colombia

into a “problem country” in the nineties. He does a comparison with the other

Latin American countries, particularly with the Andean countries. In his view,

Colombia’s internal security problems are associated with advanced but

incomplete modernization processes.

The nineties, according to him, were the period when the “crisis reached

its peak,” which was followed by a recovery process. He explains in detail how

the illegal armed groups gained strength. In essence, this happened through the

internalization of their financing, the type of weaponry they obtained, and the

advisory assistance they received from international illegal groups, etc. Ortiz

also examines how violence acquired greater visibility and how this circumstance

affected national life and foreign relations. The modernization process that

encompassed constitutional, institutional, commercial, and financial aspects led

to a transition that helped heighten the perception of instability. “The

consolidation of the new constitutional arrangement and the gradual completion

of the administrative decentralization process reinstated the stability of the state

apparatus and made possible the efficient, more orderly functioning of

bureaucracy.” These circumstances, coupled with the reinforcement of security

instruments, gave rise to a virtuous circle that has translated into improvement

in public order and in the citizens’ daily life.

Ortiz concludes by saying that the Uribe administration “soon achieved

results,” so much so hat “Colombia could become a strategic pillar” for the rest

of the region. This is not guaranteed and depends on other factors

Civil resistance

It is common knowledge that Colombia has experienced a protracted

calvary. I do not think any other Latin American country has faced greater

adversity; the events of the last forty years are a real horror history. The purpose

of the various chapters of Colombia’s Strengths I and II was precisely to show how

the country has surmounted this terrible happening and to point out the traditions,

institutions, and the political, economic, and social facts that have sustained our

democracy and permitted considerable economic and social development. The

chapter by Juanita León is truly remarkable. Based on careful research she did

not so much in libraries as in the very battlefields, she has published works on

Fernando Cepeda Ulloa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the subject, which have served as the source for the chapter titled Civilian resistance

to illegal armed groups.

Juanita León transmits a feeling of all the courage and heroism displayed

by many Colombian communities. It could be said that Colombians’ behavior

was equated with civil resistance. Otherwise, one could not understand why the

pace of work, entrepreneurial and artistic creativity, and the drive shown by

Colombians at all times did not flag, despite more than 25,000 kidnappings and

countless genocides, assassinations, and grotesque cases of abuse in violation of

human rights and the most elementary tenets of Humanitarian International Law.

Juanita León shows this in a masterly fashion as she opens her chapter by recalling

the astonishing conclusion of the World Happiness Barometer, a project carried

out by Rotterdam’s Erasmus University, which measures how satisfied people in

several parts of the world are with their life: Colombians are the happiest people

in the world. “Some – writes Juanita León – interpret this attitude as painful,

crude indifference toward the suffering of so many Colombians that have fallen

victims of the war. It is possible that this may be true in some cases. But I am

convinced that being happy despite the armed conflict is the Colombian’s main

form of resistance.”

Conclusion

It is impossible to fit into a brief text the content of two works totaling

nearly one thousand pages. I believe, though, that the original purpose has been

achieved, i.e., explaining the factors that have contributed to the preservation

of Colombian democracy and the achievement of sustained growth rates despite

extremely serious and persistent threats to institutional life. So as not to

overburden the text, significant elements have been left out, such as artistic,

scientific, and musical creativity; the role traditionally played by the Colombians’

love for libraries, education, museums, and sports, which are also strengths that

help boost self-esteem. It could be said that it is this array of virtues that is

revitalizing and refreshing Colombian society and instilling in it the impetus for

achieving the remarkable progress indicators that have led to President Uribe’s

prompt reelection – a highly significant, unprecedented political fact in our history.

There is no doubt that Colombia’s strengths have once again performed the task

of setting the country on the right path.

Version: João Coelho.

DEP

Foreign policy and democratic and human security

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

t is imperative for the Ecuadorian State, as well as for all sectors of its

society, to define a national policy in the field of international relations. Such a

policy must reach beyond the limits of governments, ideologies, power groups

and political or party interests, and should be based on a nationwide consultation

process and stem from a consensus by all sectors of the country.

The problems of development; the distressing situation of poverty,

dereliction and lack of attention that afflict wide sectors of the population; the

growing instability in the northern border; the persistent political instability; the

severe problems of governance; corruption; the loss of values in our society,

and in the external front the existing state of regional security, all seriously

jeopardize Ecuador’s security as well as that of many other countries in the region.

This situation requires the urgent definition of a coherent, consensual State policy

focussed on the higher national interests.

Foreign policy and

democratic and human

security

Diego Ribadeneira Espinosa*

* Vice-Minister of External Relations of the Republic of Ecuador.

gabvicminis@mmrree.gov.ec

Diego Ribadeneira Espinosa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

In order to be effective, this policy must be democratic, and be

accomplished with the active and widest participation of civil society.

The serious problems generated by human vulnerability in recent years

make it necessary to engineer a foreign policy for the 21

century, with special

emphasis on the concepts of human security, citizen security and their

consequence, democratic security.

The concept of security has evolved rapidly in the last few years, and should

progress decisively from the exclusive stress on questions of State and territorial

security to a much higher emphasis on the security of the population.

Democratic security is intimately linked to the effectiveness of the

institutions, which must necessarily serve the people. Human beings should be

considered as the ultimate objective of the State and of democratic institutions.

According to this concept, democratic security should also serve as a bridge

between internal and external security.

In order to provide focus to our discussion, it is appropriate to note that

the first document where the term “human security” was coined is the Report

on Human Development of the United Nations Development Program (Undp).

This concept was reinforced during the Millenium Summit of the United Nations.

While the idea of security in the international field is usually limited to the

realm of the State, the concepts of human security, citizen security and their

consequence, democratic security, have become increasingly important in recent

times as a result of human vulnerability. Such a modern view has filled a gap in

the policies of States and in international cooperation.

If one concurs with this reasoning, it is possible to agree that a concept of

international security for our time should be based on the idea of internal and

international security centered on the human being, rather than on the State’s

exclusive entelechy.

Hence we may recognize the multidimensional character of security, from

a wide and integrated criterion, focussed on the life and dignity of the person;

from that perspective, this view generates effects and consequences such as an

authentic projection that guarantees effective access to all human, civil, political

and economic rights by all human beings, including the benefits of development.

This also implies new commitments and responsibilities on the part of the

international community to review its practices, by recognizing the vulnerability

Foreign policy and democratic and human security

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

of the human being, who must be protected and offered security in the face of

old and new, chronic and unexpected threats, both domestic and global.

The construction of a fair security system that can render higher values

and principles compatible with the practical interests of countries is perfectly

feasible. Peace and security are international common goods, whose validity and

practicality produce new options of action and cooperation, which without

curtailing the sovereignty of States makes cooperation and understanding

possible by way of co-responsibility, since the right of a State ends where the

other’s right begins.

The phenomenon of migrations is intimately linked to the current

vulnerabilities of the human being, especially in Latin America and in many African

countries. Migrations are part of human evolution and their remarkable increase

is a result of globalization, of inequalities in the levels of development, of

disparities in worker’s wages in developed and developing countries and chiefly

of the increase of poverty that afflicts a high proportion of the Latin American

population.

In the last eight years a massive emigration movement, unprecedented in

the country’s history, has taken place in Ecuador. Approximately three million

Ecuadorians, roughly 25% of the nation’s population, now live in a foreign

country. Ecuador has increasingly become a supplier of qualified and unqualified

labor to the United States, Spain and Italy, and to a lesser extent to new destinations

such as Canada, the United Kingdom, Holland and Germany.

In the case of Ecuador, the causes of this massive emigration are the

political instability and the political and economic crises that the country has

experienced, particularly the financial crisis of 1999, when the GDP shrank by

30% and the rate of inflation reached 300%. In addition, the country went through

a process of dolarization and the occurrence of natural disasters such as

El Niño, all of which resulted in dramatic impoverishment of the population.

The deep human significance of migrations and the need to establish the

basis for a holistic treatment of its problems require the development of a policy

aimed at strengthening the role of the State in the following tasks: defending

human rights and the freedoms of the emigrants, in order to promote their full

regularization abroad, their integration in the receiving countries and their

enduring link with Ecuador; improving the care for their families through social

assistance programs, support for family reunion and reintegration into Ecuador;

Diego Ribadeneira Espinosa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

supporting the reinforcement of the relations between the Ecuadorian State and

the receiving countries, in order to take coordinated ant joint action in the

implementation of programs that benefit the emigrants.

The tremendous social, economic and political importance of the

phenomenon of emigration requires agreement on a South American policy

regarding migrations, whose main lines should be: assistance and protection of

the human rights of emigrants, remittances and instruments for development, as

well as international negotiations regarding migrations.

The wider practical objectives of such a South American migration policy

might be: to oversee the respect for the migrants’ rights in accordance with

existing Conventions and international instruments; to provide assistance with

the laws and regulations of the receiving countries; to promote the regularization

of undocumented migrants; to protect their families and promote their reunion;

to fight labor exploitation, traffic of persons, traffic of migrants and related

crimes (it is urgent to increase the penalty for coyotes); to support the strengthening

of associations of emigrants and stimulate the application of the principle of

shared responsibility in international relations, particularly through development

projects; to seek bilateral or regional agreements for the regulation and ordering

of migration currents; to provide for effective international cooperation on

repatriation; to promote the contribution of migration to development; to

alleviate internal problems stemming from irregular migration; and to strengthen

relations with receiving States with a view to coordinating joint actions for the

design and carrying out of plans, programs and projects for the benefit of emigrants.

In addition, it is extremely necessary that once Ecuador and all South

American countries have agreed and adopted this regional policy regarding

migrations, systematic and coordinated action is carried out to include those

problems in the agendas of relevant international fora, in an effort to counter

the restrictive policies of developed countries and at the same time strengthen

the international legal framework for the defense of the emigrants’ rights. In this

context, it is important that countries belonging to the South American

Commonwealth of Nations act to ensure their participation in the following

international instruments that guarantee the rights of emigrants, of which Ecuador

is already a Party: International Pact on Civil and Political Rights, International

Convention against Organized Transnational Crime and its Protocols against

Illicit Traffic of Migrants by Land, Sea and Air, and to Prevent, Curb and Sanction

Foreign policy and democratic and human security

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the Traffic of Persons; the Conventions against Torture, Discrimination against

Women and Racial Discrimination; the International Convention for the

Protection of the Rights of all Migrant Workers and their Families, and several

conventions regarding migrant workers agreed in the International Labor

Organization.

Another essential element of a foreign policy focused on democratic and

human security is the promotion of human rights. In this respect, one should

recall that the Political Constitution of Ecuador recognizes as the foremost duty

of the State the respect, defense and promotion of human rights. In this context,

the Government of Ecuador issued, in June 1988, the “National Human Rights

Plan of Ecuador” a document promoted since its origins by the Ministry of

External Relations, which aims at preventing, eradicating and punishing human

rights violations in the country. In this way, the Ecuadorian Chancery not only

watches over the respect for human rights in the country but also keeps the

international community and relevant international organizations informed about

the actions taken by Ecuador to ensure the respect of those rights.

The National Human Rights Plan contains an Operative Plan on the Rights

of Migrants, Aliens, Refugees, Displaced and Stateless Persons, for whose

implementation governmental agencies, in conjunction with civil society and with

international technical cooperation, are currently performing studies aiming at

the elaboration of reforms to the norms concerning migrants, in accordance

with constitutional provisions and international instruments.

Having suffered less severely the effects of the serious crisis that affects

the country, the Ecuadorian Foreign Service, as a permanent professional

institution of the Republic, has thus a double responsibility before the society

and is summoned to cooperate with other national institutions in order to make

up for its weaknesses, without forgetting the fulfillment of its duties in carrying

out abroad the policies established by the Head of the Executive.

In this connection, the Chancery must become – and in many ways it has

already started this process – a channel of communication between the central

government and the national community, so that through its practice in dialogue,

its overall view and its experience of foreign ways of life, as well as the society’s

perception of its neutrality regarding domestic disputes, it may become a bridge

to help solve the great needs and problems that affect the development and

welfare of the population.

Diego Ribadeneira Espinosa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

In this struggle the Ministry of External Relations should pursue permanent

coordination and agreement with another professional organization, the Armed

Forces. Together, the external sector and the military will apply a strategy of

cooperation with the population, in order to attract attention from the central

government and the other Ministries to the needs and solutions to the difficult

problems of the country.

In order to perform these tasks the Chancery must seek, in addition,

increased cooperation with all sectors of the country’s population, especially the

poorest ones. The credibility of the actions taken by the Ministry of External

Relations will depend on the depth of the involvement of its employees with the

widest sectors of the Ecuadorian people. In this context, I believe it is absolutely

essential to expand the representation of the Chancery to the largest possible

number of Provinces, over the totality of the Ecuadorian territory.

In this endeavor, Ecuador should seek help from friendly nations, with

which the management of international cooperation, an issue already within the

purview of the Ministry of External Relations through the Ecuadorian Institute

of International Cooperation (Ineci), shall become an essential tool that will allow

on the one hand the channeling of all efforts to provide for the needs of wide

sectors of the population, and on the other the involvement with civil society,

social organizations and fundamentally with sectorial governments, which

fortunately guarantee efficacy, continuity and stability. In this context, the Chancery

shall look for an alliance – which in a way already exists on several issues – with

the Association of Municipalities of Ecuador (AME), the Corporation of

Provincial Councils (Concope) and the National Council of Parochial Boards

of Ecuador (Conajupare).

Another extremely important sector for the structuring of a security policy

are the social communicators, who – as guides of public opinion – have a very

high responsibility before the society. The Chancery should adopt a policy of

great openness toward the press, to ensure not only the diffusion of actions

already taken and the support of the population, but also the affirmation of

national identity and the recovery of the self-esteem of the citizens of Ecuador,

who unfortunately, because of the events of the last decade, have lost faith in

democratic institutions.

In parallel, Ecuador must participate actively in bilateral and regional

processes that seek the reinforcement of the security of the zones of border

Foreign policy and democratic and human security

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

integration and at the same time put together a policy of Andean, Amazonian

and South American security.

In this order of ideas, the external policy, of whose definition and execution

the Ministry of External Relations is chiefly charged, shall pursue the following

main general objectives:

– adoption of a foreign policy in the service of peace, democracy,

development and integration, that reaffirms the principle of sovereignty,

guarantees independence and territorial integrity and promotes the

participation of Ecuador in all continents and international markets,

through a close linkage between external action and national

development priorities, with special emphasis on human rights and

above all on the defense of the emigrants’ rights.

– Promotion and encouragement of a culture of dialogue, of agreement

and citizen participation, which contribute to the best performance of

the functions of the State so as to overcome the problems of governance.

– Promotion of a climate of peace and security at the global, hemispheric,

Andean, South American and fundamentally the national levels, in order

to create an environment of political stability and furthering of

confidence, which are indispensable elements for development,

eradication of poverty and the security of the nation.

– Promotion of respect to human rights, democratic values and the rule

of law.

– Intensification of the struggle against corruption and drug traffic, at

the national and international levels.

– Active participation in the processes of physical, political, economic

and social integration, particularly at the Andean and South American

levels.

– Development of a preferential policy with neighboring countries with

a view to allowing for harmonious development of border areas and

creating capabilities for initiative, negotiation and dialogue.

– Active promotion of the sustainable development of regions situated

in the border areas in the North and the South and their integration

with similar areas in neighboring countries.

Diego Ribadeneira Espinosa

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

– Furthering the process of forming new diplomatic generations, in order

to ensure the effective action of a national diplomacy that upholds and

defends the permanent interests of the State, protects and supports

Ecuadorian communities and enterprises abroad and fulfills with efficacy

the objectives of trade promotion and attraction of investments and

resources from international cooperation, thus becoming instrumental

for the development and the security of the country.

– Adopt global migration policies that promote work opportunities and

the best use of emigrants’ remittances, through the establishment of

small and medium-sized family ventures, in order to ensure the return

of emigrants and the welfare and development of the next generations.

– Cooperate systematically with all sectors of the State and of the society

in policies aimed at affirming national identity, in order to consolidate

an integrated, non-regionalist Ecuadorian nation, that respects its values,

its historic heritage and its ethnic and cultural diversity.

– Maintain close cooperation between foreign policy and the military

and the national defense system, in order to define and safeguard the

permanent interests of the State.

Version: Sérgio Duarte.

DEP

Cheddi Jagan’s global human order

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

ackground

The New Global Human Order came at a particular time in developments

in Guyana and the rest of the world. Poverty was raging, the debt burden of the

developing world was increasing and had become unmanageable, Guyana’s debt

of US$2 billion was eating up 94 cents in every dollar earned, the IMF

prescriptions had drastically reduced the standard living of all Guyanese but

had impacted most severely on the poor and disadvantaged thereby intensifying

poverty and employment. These prescriptions are being increasingly recognised

as “palliatives, not a cure”. At the same time the ideology of globalisation had

become the new panacea for the ills of the world, both developed and developing.

In Guyana, the IMF prescriptions had begun to take hold and these included

the removal subsidies, reduced government spending, a balanced budget, wage

freeze, high interests rates and privatisation. The devastating consequences were

described in the McIntyre Report and the 1991 Budget Speech of the Minister

of Finance. McIntyre described Guyana as being the poorest country in Caribbean

* Former Speaker of the National Assembly of the Cooperativist Republic of Guyana.

Cheddi Jagan’s global

human order

Ralph Ramkharan*

Ralph Ramkharan

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

next to Haiti and Greenidge described Guyana as bankrupt. In 1992 the

Government changed and Cheddi Jagan took the opportunity to present in one

document the ideas he had been developing for some years.

As is well know, Cheddi Jagan’s consuming ambition was the elimination

of poverty. He rightly saw this scourge as an infliction and affliction on the

developing world which could be eliminated even within the context of the

existence of developed capitalists states. He saw poverty as destructive of the

“vigour and initiative of the individual and deprives the society of incalculable

human resources at a critical time. Its elimination will enrich our community and

release a harvest of energy and skills. If left unattended, the expansion of poverty,

with hunger, will undermine the fabric and security of the democratic state”.

He saw that rational and realistic policies, acceptable to and supported by

the developed world, could eliminate poverty. He said that : “Our times call for

clear thinking to diagnose the ills of our globe, to ascertain the root cause of

society’s growing problems and to formulate what must be done – a set of

guiding principles and a programme of action”.

Cheddi Jagan’s vision was expansive and ambitious. He had studied

development issues for fifty years and had written volumes on it. He had always

recognised and understood that Guyana alone could not obtain the necessary

support and resources to influence the developed countries to change course.

He knew how important it was to devise a strategy that would gain broad

acceptance. He said “... a development strategy for the eradication of poverty

must be global and positive”.

In a speech to the United Nations General Assembly, he said that he saw

this as a “crucial time” as characterised by globalisation and liberalisation

dominated by the transnational corporations with one dominant ideology;

unacceptably high unemployment and underemployment; increasing poverty and

widening gaps in developed and developing countries; chronic budget and balance

of payments deficits; social, including family disintegration; strife and convulsions

based on race, ethnicity, tribe culture and religion; demagogy and confusion

leading to a rise in fascism and racism.

He argued that Third World debt which he had been studying and writing

about since the 1970s and had been one of the earliest voices arguing that it was

unpayable and should be cancelled, was strangling reconstruction and human

developments efforts.

Cheddi Jagan’s global human order

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

He calculated that at the time US$500 billion was lost in unfair and non-

equivalent international trade, a sum equal to ten times official development

assistance from the developed countries.

He concluded that “these factors pose a grave threat to international and

individual peace and security. Consequently, there is an urgent need for a New

Global Human Order, as an adjunct to the UN Agenda for Development. A New

Global Human Order must have as its goal human development: meeting the

basic needs of the people, cultural upliftment and a clean and safe environment”.

The New Global Human Order proposes changes leading to:

1. The establishment of global institutions to respond to the global

dimension of the existing human society.

2. The United Nations system to play a more central role in global economic

management and should have access to large financial resources.

3. The IMF and World Bank to concentrate on human development as

distinct from the means of development and return to their original

roles.

4. A new Official Development Assistance which would channel to the

poorest countries two-thirds of ODA instead of one-quarter.

5. The acceptance of sustainable human development as an attainable

global.

6. A greater role for non-governmental organisations in international

institutions.

7. Reduction of military expenditure and the use of the “peace divided”

for debt relief. Introduction of the Tobin Tax of 0.5 percent on

speculative transfer of currency

8. Providing for equitable international trade both in goods and services

to accelerate global growth and allow a more equitable distribution of

its benefits.

Ten years have gone since the New Global Human Order was launched.

It was Cheddi Jagan’s and Guyana’s contribution to the struggle against poverty,

a struggle which consumed the entire lifetime of Cheddi Jagan. How have we

feared so far?

Ralph Ramkharan

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Despite the tragic international situation which now prevails, we have seen

some initiatives during last year but a tremendous amount remains to be done.

The Millenium Development Goals adopted by the United Nations in

September 2005 set a ten year agenda with clear goals which it was hoped would

guide the strategies of both developed and developing countries in planning

their assault on poverty. The MDG proposes to eradicate extreme poverty and

hunger, achieve universal primary education, promote gender equality and

empower women, reduce child mortality, improve maternal health, combat

HIV/Aids, malaria and other diseases, ensure environmental sustainability and

develop a global partnership for development all by the target date of 2015.

While these goals are ambitious and the means to attain them have not

been identified, during last year the G8 countries agreed to write off the debt of

18 of the poorest countries in the world, Guyana included, amounting to US$40

billion. Guyana was already been benefitting from this facility. This is a start but

its implementation has been severely criticised.

In his book, “The End of Poverty”, Jeffrey Sachs said: “Alas, the international

community’s approach remains incoherent in practice. On the one side, it

announces bold goals, like the Millenium Development Goals, and even ways

that the goals can be achieved, such as the pledge of increased donor assistance

made in Monterey Consensus. Yet when it comes to real practice, where the

rubber hits the road, in the poverty reduction plans, the Millenium Development

Goals are expressed only in vague aspirations rather than operational targets.

Countries are told to go about their business without any hope of meeting the

MDGs. The IMF and World Bank reveal split personalities championing the

MGDs in public speeches, approving programmes that will not achieve them,

and privately acknowledging, with business as usual that they cannot be met”.

Jeffrey Sachs is a famous economist who specialises in development

strategies and is absolutely convinced that the poverty and the problems of

development can be resolved with the correct strategies and the commitment of

developed world.

Guyana was prepared Poverty Reductions Strategies at the behest of the

donors. This is what Professor Sachs said about these: “Knowing that a certain

amount of aid is likely, the recipient country is expected to engage in a broad-

based public consultation to prepare the poverty reduction plan, including how

Cheddi Jagan’s global human order

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

the aid will be deployed. The international community’s insistence on broad public

participation in the design of these plans is designed to achieve four main goals:

(1) better prioritisation of investment plans, (2) increased public awareness about

poverty reduction programmes, (3) mobilisation of NGOs and community

groups in the fight against poverty, and (4) fostering more political ‘antibodies’

against corruption. All of this is fine, indeed, it is reasonably successful in eliciting

public participation. What is missing in the process are the practical linkages

between the today’s arrangements, the country is presented with a fait acompli –

‘Here is the amount of aid you will receive.’ Instead, the process should be

turned around. The first step should be to learn what the country actually needs

in foreign assistance. After that, the IMF and World Bank should go out to raise

the required amount from the donors”.

Professor Sachs recommends a programme for a poverty reduction

strategy based on the MDGs. It should be in five parts, namely, (1) a differential

diagnosis, identifying the policies and investments that the country needs to

achieve the MDGs, (2) an investment plan, showing the showing the size, timing,

and costs of the required investments, (3) a financial plan, to fund the investment

plan, (4) a donor plan, which gives the multiyear donor commitments for filling

the MDGs Financing Gap, and (5) a public management plan, that outlines the

mechanisms of governance and public administration that will help implement

the expanded public investment strategy.

There is clearly a growing recognition of the belief that Cheddi Jagan carried

his entire life by outstanding and world recognised experts like Professor Sachs

and public figures like Bono, the pop star, who wrote the forward to the book,

that poverty could be eliminated with the resources that are currently available

and with the correct policies.

While there have been minimal success, there have been serious failures.

The failure of the Doha Round of trade talks recently has been a great

disappointment to developing countries which had been hoping that the reduction

of trade barriers would have gone a long way in contributing to their own

economic growth and the development of the world’s economy.

Even thought there is much that is discouraging, including the war in Iraq

and the continuing hostilities in Israel and Lebanon, we have moved albeit slowly,

from the position where up to recently poverty was considered to be the fate of

‘lesser’ peoples to the situation where it is now recognised that developed countries

Ralph Ramkharan

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

have a responsibility and a duty to do much more to destroy this scourge.

Developing countries have an equal responsibility to put their houses in order

and must discharge that responsibility.

The hopes of Cheddi Jagan as envisioned in the New Global Human Order

helped to point the way when many were not looking or could not see. Let us

hope that his dreams for Guyana are soon achieved.

DEP

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

* Former Minister of Finance of the Republic of Paraguay. Director, Center for the Analysis and Diffusion

of Paraguay’s Economy (Cadep).

[email protected].py

ntroduction

Paraguay is different from other countries in the region in that both the

1980’s and the 1990’s were lost decades for the country, devoid of reforms or a

democratic experience. Its economy is still based on agriculture and cattle-raising,

and diversification of economic production has been very limited. To this, low

productivity, deep inequalities, an incipient market, and stunted governmental

development must be added. Since the advent of democracy (1989), the

implementation of reforms has always been partial, inconsistent, and subject to

reversals. This situation corresponds to limitations on the part of the political

Paraguay’s economic

situation and prospects

Dionisio Borda*

Recent results (2003-2005) include restoring macroeconomic balance, public finance

reorganization, and an incipient economic recovery after a long political and economic

crisis (1982-2002); nevertheless, there appears to be no strategy to achieve economic

growth on a new productive basis, nor consistent social policies that aim at fighting

poverty and inequality. Ever since the transition to democracy started in 1989,

the divorce between economic and electoral results has blocked the emergence of a

new development model and a new political model that create both sustainable

growth and a true democracy.

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

class and of the state’s bureaucracy – caused by incompetence and dominant

private interests – to generate a new strategy that may break away from the

present economic and political model.

Paraguay continues to be the least developed country of Mercosur. With

about six million inhabitants, the country’s per capita income is US$ 1,300, and

GDP is close to US$ 7,500 billion, of which 30 percent are generated by the

agricultural and cattle-raising sector, which employs the rural population (about

49 percent). The Paraguayan economy is riddled with structural problems that

have hindered economic growth, especially during the 1982-2002 period, which

featured a banking crisis (1995-1998), a growing fiscal deficit (1999-2002), and

public debt payment arrears (2002).

The new Administration (August 2003) inherited a heavy burden, but it

started its term endowed with a degree of legitimacy that had been denied to the

two previous ones. It had a good gauge of the economic situation, and a

government program which identified expected results over the short, medium,

and long range.

The Economic and Political Crisis (1982-2002)

Paraguay launched a process of economic reform and a transition to

democracy after the February 1989 coup. This military action opened the door

to democracy, after a 35-year dictatorship. Nevertheless, it was neither able to

reverse slow economic growth nor to find a new way to do politics.

The current Administration (2003-2008) was preceded by three elected

presidents (1998-1993, 1993-1998, 1998-2003), the last of which faced certain

impeachment proceedings arising out of the March 1999 assassination of his

vice president, and was ultimately removed by Congress, which put in place a

new Administration (1999-2003). In this 16-year democratic period, there were

also three unsuccessful coup attempts (December 1995, April 1996, and

December 2001), a fact that highlights Paraguay’s precarious democratic tradition,

particularly among the political class, as well as the limited presence of the state.

The first phase of the economic crisis (1982-1988) corresponded to a sharp

drop in economic growth and to the deterioration of the authoritarian political

regime. The rate of GDP growth reached 2 percent a year, and GDP per capita

had a negative growth of 1.1 percent during the period.

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The second phase (1989-1998) which saw the beginning of the transition

towards democracy (1989), started out with a modest economic recovery – 2.9

percent GDP growth and 0.1 percent GDP per capita growth. This period

witnessed important institutional and economic policy changes. Price controls

and multiple exchange rates were dropped, financial markets were liberalized,

and legal bank reserve requirements were loosened. Furthermore, the tax system

was simplified and new legislation was adopted, with a view to achieving

economic and institutional reform.

However, this period also saw the worse banking crisis in Paraguayan

history: only 18 banks and 22 financial enterprises – out of a previous 34 and

63, respectively – survived the 1995-1998 bankruptcy wave, which cost the

country an estimated 10 percent of GDP.

The major features of the third phase (1999-2002) were economic retraction

and a governance crisis. It featured three years of recession (1998, 2000, and

2002), real GDP growth of 0.1 per cent a year, on average, and a rate of per

capita economic growth of – 2.9 percent, also on average.

Throughout these phases or cycles, the agricultural production structure

has not changed much: its growth has been spotty and it was subject to several

adverse exogenous factors, such as the weather and international prices. The two

decades since the toppling of dictatorship have been associated to low economic

growth, with a yearly average of just 2 percent and a GDP per capita negative

growth rate of 0.8 percent. This economic stagnation is due, in part, to the fragile

nature of the development model – which is based on undiversified agricultural

exports, on the preeminence of the state as a source of employment and contracts,

and on linked import-and-reexport operations. It is also partly the result of the

vulnerability of a small economy to domestic and foreign volatility.

Moreover, the transition to democracy elicited the emergence of two

sources of political instability. The first one is the high turnover rate of

government ministers and of CEO’s or directors of state-owned companies.

Such changes usually bring uncertainty, due to the limited institutional

development of the Paraguayan state, and to the high degree of institutional

dependence on individual leadership qualities in order to implement policy. The

second source of instability has been the emergence of governance challenges,

due to the scant legitimacy of elected officials. Both have eroded confidence and

have hindered the growth of capital investment levels.

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Neither the fiscal debt nor hyperinflation, which afflicted other countries

in the region, can explain Paraguay’s economic stagnation over the 1982-1998

period. Instead, the cause may be found in the country’s production structure, in

its vulnerability to exogenous factors, and in its political instability. The

deterioration of the political and economic situation accelerated in 1999-2002,

as a result of a significant economic downturn that may be partly attributed to

the economic crisis elsewhere in the region, and partly to corruption, to symptoms

of weakening governability, and to the scarce results of some reforms

implemented since 1989.

A new start for a new administration (2003-2008)

The political and economic situation in August 2003 reflected serious short-

and medium-term problems. The slow growth of the economy negatively affected

the employment outlook, and worsened poverty and inequality. In 2002,

unemployment stood at 17.1 percent, and underemployment at 22.5 percent of

the work force. Poverty expanded to 46.4 percent, and extreme poverty surged

from 17.3 percent to 21.7 percent, particularly in rural areas.

Macroeconomic stability also plunged into a period of fast deterioration

and inbalances. Both inflation and the fiscal deficit saw remarkable increases.

Mean annual inflation for 1998-2002 stood at 10.3 percent, with a peak of 14.6

percent in 2002. Similarly, the fiscal deficit witnessed an explosive growth – from

1 percent of GDP in 1998 to 3.3 percent in 2002. One of the causes for such

surge was the operational deficit caused by retirement and pensions doled out

to civil servants, which accounted for 75 percent of the fiscal deficit (2002). At

the same time, tax revenue was stagnant, while growing salaries and debt servicing

expenses further pressurized fiscal accounts.

Contrary to the trend of the previous 15 years, the foreign debt also surged,

and its servicing began to fall into arrears – which was the case particularly with

domestic debt servicing and with foreign payments to some bilateral organs.

The debt servicing backlog in August 2003 reached US$ 64 million, and the

public debt coefficient reached 50.3 percent in 2002.

Macroeconomic variables linked to the financial sector were also in growing

disarray in 2002. There was an increase in debt arrears (13.5 percent) and financial

intermediation (71.7 percent), as well as a “dollarization” of banking deposits

(69 percent) and credit (60 percent).

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

In the face of this situation, the new administration (2003-2008) established

four pillars to support its development strategy for the next five years:

i) to restore the public’s trust in state institutions by fighting corruption,

tax evasion, and public administration inefficiency;

ii) to promote the participation of civil society in the design of public

policies and in the control of public administration;

iii) to promote job creation through economic growth, on the basis of a

new model of agricultural and industrial development, which is

endowed with fiscal, environmental, and social accountability; and

iv) to fight poverty and inequality by means of direct initiatives focusing

on access to health, education, and basic services, and on policies that

promote equality.

Progress and Achievements

The most basic task for the incoming administration was to restore domestic

and foreign confidence, to implement a series of reforms, to solve the problem

of public debt arrears, to reestablish fiscal balance, to create conditions for

macroeconomic stability and economic dynamization, and to set the foundations

for sustainable growth.

Governability, transparence, and trust

In order to face immediate and short-term economic problems, an

important achievement was working to build a consensus in order to reestablish

governance and to show increasing transparency. An unprecedented step was

the October 2003 signing of an “inter-institutional agenda for the Executive and

the Legislative Powers”. This agenda included the adoption of major legislative

bills in order to avoid defaulting on Paraguay’s debts, to fight the fiscal crisis and

financial vulnerability, as well as to promote economic recovery. Another

significant confidence-building pact was signed in October 2003 between the

Ministry of Finance and members of the Banking Association – an agreement

to reschedule domestic debt (Treasury Bonds) valued at US$ 138.1 million over

three years at 9.5 percent interest. The real financial possibilities of the Paraguayan

state involved extending the redemption date of such bonds to five years, at a

lower interest rate that would gradually increase over time.

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

The administration also signed an agreement with the business sector

(November 2003) through which the Executive committed itself to a series of

reforms with a view to promoting competitiveness, fairness, fiscal responsibility,

and the formal sector of the economy.

Lastly, a seminar was organized that gathered the President and his cabinet,

business leaders and civil society representatives with a view to discussing the

challenges posed by economic growth with fairness. This event, which was held

on 26 November, 2004, identified problems, goals, and possibilities for policy

implementation in four sectors relevant to sustainable growth:

i) Competitiveness and business environment.

ii) Diversifying and increasing the added-value of production and exports.

iii) Agricultural production and land ownership.

iv) Poverty and inequality.

This economic agenda aims at achieving certain intermediary goals by 2008

and medium-term goals by 2011, the bicentennial of Paraguay’s independence.

Another sector in which the new Administration quickly broke new ground

was improving transparency and citizens’ participation. Transition

Administrations have been criticized for neglecting these issues. A first step to

strengthen the fight against corruption was the August 2005 agreement between

the Ministry of Finance and the Council in charge of promoting the National

System of Integrity and International Transparency. The agreement would

strengthen the Public Procurement Program, fiscal administration – including

customs –, and promote accountability practices in the public administration.

After 43 years and two recent attempts, in 2001 and 2002, the administration

was able to reach a Stand-by Agreement with the IMF on 15 December, 2005.

The agreement aims at fighting poverty, promoting sustainable growth, and

improving the public sector’s efficiency and transparency. It also made two

international loans immediately available to forestall payment arrears vis-à-vis

multilateral financial institutions.

Reforming the public sector’s pension and retirement system

Reform was started with the adoption, in December 2003, of Law 2345,

dealing with the Fiscal Mutual Fund (Caja Fiscal). The new legislation sought to

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

change the public sector’s pension and retirement system, which was generating

a steadily growing operational deficit for the central national government to

fund. Beyond the yearly transfer of funds necessary to cover such deficit, the

system required other immediate changes, in order to: i) avoid system-wide,

short-term failure; ii) to reduce heterogeneity among the various Mutual Funds,

which created serious fairness issues in the system; and iii) to solve the insurance

portability issue, which prevented insured workers from being able to migrate

their coverage from one government sector to another.

The immediate result of this reform was a drop of the operational deficit

due to an increase in public sector workers’ contributions to the system, from 14

to 16 percent. Similarly, the long-term sustainability of the pension fund was

enhanced, and dividing it into two independent branches – for retirements and

pensions – has improved manageability and reduced the possibility of bribes

and corruption.

Tax Reform

This reform aimed at promoting the formal sector of the economy and to

correct the very low fiscal load (10 percent of GDP) by maintaining taxes at a

reasonable level, increasing the ranks of taxpayers, and creating new taxes.

Previously existing legislation (Law 125/91) had far too many loopholes (46

types of exemption), which made tax management difficult. Furthermore, it

inexplicably lacked universally-adopted taxes, such as a personal income tax, a

capital gains tax, and it did not tax agricultural or cattle-raising concerns. The

reform aimed at simplifying the system through a 10-10-10 formula, i.e., a 10

percent value-added tax on all products and services, a 10 percent tax rate on

individual incomes above 10 minimum salaries, and a 10 percent tax on firms’

business income. Tax revenue under a new fully-fledged system was forecast at

1.5 percent of GDP. This proposal was adopted in July 2004 as Law 2421. It

introduced individual income tax, a tax on agricultural and cattle-raising firms’

profits, and it reduced the VAT on basic goods and services for the population.

Strong resistance erupted against the so-called Fiscal Adequacy Law,

because taxation does not translate into improved services. Such a vicious circle

– a low, 10 percent tax load on GDP, and bad public services – had justified

evading two problems: low competitiveness and extremely low fiscal resources.

Improving competitiveness does not only imply low marginal tax rates. Had this

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

been the case, Paraguay would have been in better shape with a system that

included (legal) tax exemptions, (illegal) tax evasion, and low taxes, which along

with other concessions were already featured in the previous tax legislation –

such as a 10 percent VAT, or a 30 percent tax on business income, gasoil subsidies,

and outdated public tariffs. Even in the presence of such egregious privileges,

the competitiveness of Paraguay did not improve. The high public services

operational deficits and the low quality of public expenditures are two serious

problems for development. One consequence of such a situation was the

inefficient allocation of insufficient resources for investing on the population

and public services; another was low tax revenue due to corruption and privileges.

The crux of the matter, therefore, was to correct this historic inconsistency:

an enhanced need for resources to be spent on infrastructure and human capital

investment to improve the country’s competitiveness, in the face of a low tax

load. Paraguay lags behind every other country in the region in infrastructure

and human resources training; yet it paradoxically sports the region’s lowest

tax load.

Customs Code Reform

The new Customs Code update Paraguayan norms to international

standards and opens the way to the administrative modernization of an institution

that had hitherto been the symbol of political crooning. It also opens the way to

professionally qualifying its human resources. Resistance to change in this sector

has not been any less intense than that involving other reforms.

The first source of resistance came from within the institution. It slowed

down the pace of change. The second source was the government itself, and it

emerged during the implementation phase of the law, which makes the customs

office an independent institution, the first goal of which is to train its professional

cadres.

Public finance reform and fiscal balance

Management reforms at the Ministry of Finance aimed at various

immediate goals: to revert the financial gap; to eliminate debt arrears; to contain

the growing fiscal deficit; to reduce tax evasion and to correct the lack of tax

income transparency, improving the allocation of resources; to introduce

innovation in order to modernize institutional management, especially with a

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

view to planning and monitoring money transfers, foreign loans execution, and

the achievement of social and economic goals by the public sector.

The strategy adopted by the Ministry of Finance, as well as some of its

major results, hinges on four elements: i) strengthening existing institutions with

a view to improving management; ii) creating new units to strengthen

administration and control; iii) developing e-government to achieve efficiency

and transparency gains; and iv) improving institutional coordination.

After many years, the fiscal deficit was significantly lowered, to .4 percent

of GDP in 2003. The following year, a 1.6 percent global surplus and a 2.8

percent primary surplus were achieved. In 2005, the twin surpluses were

maintained, though at lower levels.

On the revenue side, the tax load, which over 2000-2002 had been below

10 percent of GDP, was initially lifted to 10.3 percent, in 2003, and had an

unprecedented surge to 12.2 percent of GDP in 2004, dropping to .84 percent

of GDP in 2005. Such a historically low tax load is, to a certain extent, balanced

out by royalties and compensations paid by the two binational enterprises

Paraguay owns along with Brazil (Itaipu), and Argentina (Yacireta). Both

(especially Itaipu) accounted for 4.1 percent and 3.2 percent of GDP in 2004

and 2005 (after tax load adjustments).

The structure of tax revenue before reforms has made it possible to increase

the tax load coefficient just by improving revenue management. The value-added

tax (VAT) is the most important source of tax revenue. Between 2003 and 2005,

it reached an unprecedented 4.4 and 5.2 percent participation, respectively,

relative to GDP. However, VAT, which has been held at 10 percent, is still subject

to exemptions and evasion.

As a result of management improvements and the Fiscal Adequacy Law,

both tax revenues and the number of taxpayers have increased. Between 2002

and 2003, the number of taxpayers rose by 10.6 percent, and the following years

saw increases of 7.6 percent (2003-2004) and 9.7 percent (2004-2005). The same

trend is true for revenue levels, which increased by 12.3 percent in 2002-2003,

40.9 percent in 2003-2004, and 14.1 percent in 2004-2005.

As to resource allocation, the growing expenditure rigidity is remarkable.

There is a strong imbalance between current and capital (investment) outlays.

Over the last few years, they have kept an 80:20 proportion. Such an imbalance

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

is partly due to low investment implementation efficiency, as investment resources

are used up to compensate resource scarcity periods. However, this is not only

caused because of the lack of matching investment funds, but also because of

managerial problems.

Another characteristic of outlay rigidity is the high proportion used up by

personal services in the form of salaries and other benefits. In 2003, these outlays

still accounted for about 43.9 percent of total outlays, due to salary hikes that

benefited workers in the security area. However, in 2004 and 2005, through

enhanced control over hiring practices, they dropped to 42.7 percent and 41.3

percent, respectively – this, in the absence of civil service reform, which is a

major bottleneck.

If one excludes amortizations, the servicing of interest on loans by the

central government, personal services outlays, and transfers to cover retirement

and pensions operational deficits are, as a whole, larger than the tax load. That is

to say, tax revenues are used up to pay for public sector salaries and to cover the

operational deficits of the public servants retirement and pensions system. Only

in 2004 did outlays for these three areas stay, at 10.9 percent, almost a full two

percentage points below the tax load.

Economic recovery and macroeconomic balance

After a strong recession period, GDP growth started to slowly recover –

3.8 percent in 2003, 4.1 percent in 2004, then down again, in 2005, to 3.4 percent.

In current dollars, GDP reached US$ 5.616 billion, US$ 6.929 billion, and 7.479

billion, respectively, over the 2003-2005 period. GDP per capita registered

positive growth of 1.8 percent in 2003, 2.1 percent in 2004, and only .8 percent

in 2005. In current dollars, GDP per capita reached US$ 978 in 2003, US$ 1,205

in 2004, and US$ 1,301 in 2005.

One of the major achievements of the first two years of the new

Administration has been control over inflation. In 2003, the inflation rate dropped

to 9.3 percent and to 2.8 percent in 2004. This historic rate, the region’s lowest

for that year, was a result of improved economic policy coordination, and

particularly reflects the active role of fiscal policy, which increased tax revenues

and imposed discipline over expenditures – of course, a favorable international

situation also played a role. In 2005, inflation made a comeback, reaching 9.9

percent.

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Prices have increased as a result of the higher oil prices (though domestic

price adjustment has lagged behind the oscillations in international oil prices)

and of a more relaxed fiscal policy, especially because of increasing expenditures.

A factor that contributes to lower price levels is a freeze over public tariffs,

especially water supply. After the 2001 adjustment, tariffs have decreased in real

terms. Over the last few years (2003-2005), the evolution of real prices for

electricity, water and telephone services has been negative.

Turning to credit, the relation between domestic and foreign currency

changed 39:61 in 2002 and 52:47 in 2005. Decreased dollarization of credit

corresponded to an increase in domestically-denominated credit of 22.7 percent

in 2004 and 21 percent in 2005. One serious limiting factor to encourage private

investment demand is the short-term nature of loans and deposits. Active interest

rates have dropped over the last two years. The Guarani-weighed rate dropped

from 30 percent (2003) to 15.5 percent (2005). This downward trend is led by

development-oriented interest rates, due to the influence of public banks.

As to international trade, Paraguay is an open economy, with an opening

coefficient of 55 percent (2003). Exports in relation to GDP saw significant growth

rates of 14 percent and 22 percent, respectively, in 2000-2002 and 2003-2005.

This is due to the recovery of regional economies, mainly Brazil’s, the largest market

for Paraguayan exports. Exports increased markedly in 2003 and 2004, at around

23.5 percent, and at 3.6 percent in 2005. Imports as a proportion of GDP also grew,

to 34.8 percent, compared to 27.5 percent in 2000-2002, and 34.8 percent, in

2003-2005. The trade defict has stayed relatively constant, at 15.5 percent of GDP.

A remarkable trait of Paraguay’s foreign trade is reexportation – the exports

of goods that enter Paraguay as imports. Such transactions were on a downward

path from 1995 to 2002. Over 2003-2004, they staged a modest comeback,

though they have kept below registered exports.

Obstacles and restrictions

The initial thrust of reforms has ebbed away. Signs of uncertainty and

obstacles to governability reappear, as does a weakening of commitment to

carry on with pending reforms. The lack of a clear course towards a new

development model that affords sustained economic growth, poverty reduction,

and lower inequality is also apparent. Early electoral jostling, beginning with the

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

Administration’s party primaries (in February and July), to be followed by

municipal elections in November 2006, and perhaps a National Constituent

Assembly in 2007, which would change the Constitution to introduce the

possibility of reelecting the president, are potential threats to sustaining a

predictable economic policy over 2006-2008, as well as to securing governability.

A weakened governability

Uncertainty as to the rules of the game is on the rise again, beyond the purely

economic. The risk perception of society and of the private sector is growing in

the face of personal and property insecurity. In spite of the turnover at the

Supreme Court of Justice (7 out of 9 Ministers have taken office since 2003), the

Judiciary has been unable to guarantee a speedy and impartial implementation

of the law. The prosecutors, security organs, and police officers involved in

criminal acts, as well as legislators accused of corruption that go unpunished by

their peers chip away at the credibility of institutions and their ability to create

an adequate environment to attract investments.

Traditional parties are increasingly weakened as sources of proposals and

debates over public policy. Clientelism and cronism is on the rise, to the detriment

of building on institutions that promote new leaders. The primary elections within

the party in office pose a threat to the progress and achievements of the last two

years.

Reversibility of reform and stagnation of changes

In addition, political and special interest pressure groups are lobbying to

make recently adopted legislation – inter alia, the Fiscal Adequacy Law, the

Pension Reform Law, and the Customs Code – more flexible either through

changes to the legal text or through implementing legislation, just as was done in

the 1990’s to financial legislation. Reverting reforms does not always mean

correcting design errors or implementation mistakes, but responding to special

interests. This is one of the vicious circles that explains the low fiscal burden and

the fragility of the financial system vis-à-vis the state and the business sector.

Another significant fact is the stagnation of changes to Law 1626, which

regulates the Public Administration. Law 1626 has serious shortcomings, which

account for its inability to establish a civil service on the basis of efficiency and

personal integrity, and for the lack of a plan to generate professional cadres of

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

100

state bureaucrats. Over 2003-2006, the fiscal budgets have included significant

increases in paid government positions.

The civil service faces various problems. The first of these is its lack of

professional cadres, which would be achieved by the admission and promotion

of professional officials who do not hold politically-appointed jobs. The absence

of competition and the lack of a meritocracy have turned public employment

into a tool of political clientelism and favoritism. This not only affects managerial

efficiency, but also creates challenges to discipline and resistance to change, either

under the form of training or goal-oriented incentive mechanisms. The second

type of problem, which is linked to the former, is the lack of proportion between

the number of jobs at the lower rungs of the hierarchical scale and middle- and

higher-management jobs. A third limitation is the low salary level for technical

jobs that carry a high degree of responsibility, as compared to jobs in the private

sector. Such a situation is a Petri dish for corruption, cronism, and it strengthens

political clientelism.

Under present conditions, no serious commitment is apparent on the part

of the Administration to reform the state, especially at the level of state-owned

enterprises and autarchic bodies. With the exception of the Ande public electricity

utility, water, oil, and cement companies have in common supernumeraries,

overdue payments to suppliers (which the National Treasury may have to pay),

and decaying levels of service. Reform of this sector is an unfulfilled pledge to

civil society and to opposition political parties.

No progress has been made in improving the control mechanisms over state

resources, and state control over the management of financial resources

transferred to subnational levels of governments is still weak, which could

negatively affect fiscal achievements in the immediate future. Itaipu donations

for social expenditures are not a part of the fiscal budget, and are being questioned

as to their lack of transparency. On the one hand, the body that should concern

itself with energy policy undertakes social programs and, on the other, the

institutions that should concern themselves with the strategy to fight poverty

lack resources to implement their programs.

The scant effort devoted to civil service reform and to strengthening control

mechanisms – especially the National General Accounting Authority, a

dependency of the Presidency of the Republic which monitors public

expenditures – chips away at the credibility of the Administration’s claim that it

Dionisio Borda

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

101

is fighting corruption, as this fight has limited itself to improving tax revenues

and to certain achievements in the field of public procurement.

Improving competitiveness

The governmental agenda has demoted the goal to achieve a new development

model – one that is anchored on agroindustry, improves the productivity of

agricultural family units, increases investments in human and physical capital in

order to achieve integration advantages, and enhances the opportunities for the

poor to have access to services and resources.

Paraguay needs to generate incentives, to offer guarantees, and to implement

a sustainable economic growth policy that is labor- and resource-intensive. This

challenge involves supporting the innovative private sector so it may fully use its

installed capacity and increase its investments. Besides extending medium-term

credits, which the new Development Financing Agency is supposed to mobilize,

the country needs to allocate resources to improve its physical infrastructure

and to invest in its human capital.

Social Challenges

High levels of unemployment persist in the social area, while poverty and

extreme poverty have not been reduced by the economic recovery of the last

few years. Social tensions grow among farmers and the agricultural business sector

devoted to soybean production and cattle-raising. These are large concerns that

typically use extensive land areas and are technology-intensive. The conflict

revolves around the following factors: i) the growing use of pesticides in the

absence of any state regulatory ability to avoid health and environmental hazards;

and ii) the creation of a dynamic market for land that increases its value and

promotes a growing exodus towards the cities.

The lack of opportunities for employment of rural migrants in urban areas

has sparked a growing migration abroad. An estimated US$ 500 million in

remittances are made by Paraguayan residents in Spain, Argentina, the United

States, Japan, Germany and other countries. Such remittances represent the fourth

or fifth largest foreign exchange source of Paraguay’s economy.

Besides delaying the implementation of expected reforms – for public

enterprises, commercial banking, regulatory agency development, and

strengthening the financial sector – the Administration’s priority is to send out

Paraguay’s economic situation and prospects

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

102

clear signs and to take strong steps with a view to changing the development

model. The strong dependence on a few, low added-value agricultural products

and on the import-reexport business, as well as the state’s discretionary powers

and inefficiency as the main provider of jobs and the main consumer of goods

are not the pillars on which sustainable growth will be achieved.

Conclusions

The progress achieved over the last two years have reestablished the fiscal

balance, eliminated foreign debt arrears, started an economic recovery supported

by favorable conditions in the region, and reestablished the domestic and foreign

credibility of the Paraguayan government. This trust has in turn afforded an

adequate governability climate and an incipient economic reactivation.

Nevertheless, such changes are not reflected by changing the rules of the game.

Rent seekers within the public sector or the market, or state-linked firms,

are still powerful enough to trump innovative sectors both in the economic field

and in the political arena. The struggle to control the state is still a struggle to

control economic rents. Such a concept of power stunts market development,

state development, and the practice of democracy well beyond electoral balloting,

and of attempts at economic reform.

Such vicious circle of political and economic backwardness and its

alieanation from electoral incentives is one of the reasons for the prolonged

stagnation and isolation of Paraguay, and it still stunts the emergence of a new

model of competitive development based on a fairer distribution of opportunities

and resources, and on a system of incentives that may break away from the

nihilism that has crystallized the democratic transition. The corruption perception

index published by Transparency International shows Paraguay is one of the

world’s most corrupt countries, placing 144th in a field of 158. According to

the competitiveness index of the World Economic Forum, Paraguay is one of

the least competitive economies, 113

out of a possible 117. And it is the country

that has the lowest appreciation of democracy – only 13 percent of the population

is satisfied with democratic rule, according to Latinobarómetro. These figures

show that the economic and political transition of Paraguay still has a long way

to go before a light may be sighted at the end of the tunnel.

Version: Manuel Carlos Montenegro.

DEP

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

103

ntroduction

Up to the end of the 60’s the foreign policy of Peru was mainly focused on

legal aspects in order to defend the State’s territorial patrimony. Innumerable

demarches and negotiations were undertaken to solve border disputes with

neighboring countries. It should be recalled that in the beginning of the 20

century the borders of Peru with its five immediate neighbors were not

demarcated. Moreover, the southern end of the territory was still occupied by

Chile. In such circumstances, since the State lacked a precise territorial profile,

patrimonial defense was obviously the main task for Peruvian diplomacy.

Over the four decades between 1902 and 1942, thanks to the noble effort

of renowned internationalists such as Alberto Ulloa, Victor M. Maúrtua, Victos

Andrés Belaunde and Raúl Porra Barrenechea, among others, definitive border

arrangements were achieved through recourse to a series of mechanisms for the

settlement of disputes, including direct negotiation, arbitration, good offices

A strategic regional view

of Peru’s foreign policy

José Antonio García Belaunde

* Minister of Foreign Affairs of the Republic of Peru.

infor[email protected]ob.pe

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

104

and mediation. Nevertheless, in some cases the signature of treaties was not

enough to solve bilateral differences, due to problems arising from their

implementation.

Before it could be officially concluded, the agreed delimitation between

Peru and Colombia in 1922 required complementary negotiations, due to the

military incident that took place in the Amazonian town of Leticia. The question

of the observance of non-territorial obligations agreed by Chile in the border

treaty of 1929 was only solved in 1999, with the signature of the Ata de Lima.

The case of the Peruvian-Ecuadorian border is better known. Despite being

delimited in 1942, by the Rio de Janeiro Protocol, substantive divergence about

the demarcation of the border remained unsettled for decades and gave rise to

serious military clashes in 1981 and 1995. The final solution to the problem, with

the active engagement of the four guarantor countries of the Protocol, required

complex and protracted plurilateral negotiations which were completed in 1998

with the Brasília Agreement.

Taking into account the historic background briefly summarized above, it

is not surprising that during the 20th century the legal focus in Peru centered on

the defense of the territorial patrimony. Only at the end of the 60’s the conditions

were ripe to allow a new vision of the Peruvian external management to coalesce,

geared to the characteristics and interests of the nation and its international

projection. As a result of a fruitful consideration drawn from the French school

of political sociology, external policy objectives, still valid to this day, were

identified, with adjustments and readjustments obviously needed before a

changing and uncertain international context.

That consideration, inspired and directed by the action and thought of

Carlos García Bedoya, a key figure of Peruvian diplomacy, defined the ways

along which Peru’s international projection would be consolidated, on the basis

of the historical continuity and the geographical component of its national

territory. A whole generation of young Peruvian diplomats, to which I belong,

had the chance and the privilege of witnessing and cooperating to some extent

in the formulation of that new political vision, designed and executed from the

beginning of the 70’s. Today, decades later, we, the heirs of this rich experience,

both theoretical and practical, have the duty to forge ahead in the achievement

of the objectives whose consolidation continues to respond to the vital interests

of Peru.

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

105

The conditions imposed by the present international context do not

weaken, but on the contrary strengthen, the validity of the central objectives of

the foreign policy, clearly identified thirty years ago. A clear example of this is

the realization that regional integration is the inescapable means to allow for the

development of individually weak States. The disappearance of the bi-polar

world and the globalization of the economy, unpredictable in the mid-seventies,

confirm that it is indispensable to consolidate integration. This is the only way to

ensure the best possible insertion in a global world. Competition in a globalized

world, both in terms of the exchange of goods and services and in terms of

political presence, calls for the shaping of regional political and economic units

as a necessary condition.

During the 70’s there was a debate over the possibility of establishing a

new world economic order on the basis of a North-South dialogue. A new order,

globalization, has effectively come about and has radically changed the

international economic system, although in a way that is completely different

from the aspirations of equality and justice that fueled the now defunct North-

South dialogue. The gap between rich and poor countries has widened and the

role of the production and manufacture of raw materials in international trade

has given way to the growing exchange of services, information, financial means

and hi-tech. The traditional division of labor was reshaped and today the rule is

the regional division between blocks of countries who concentrate the commercial

and financial flows. In the present global context, the establishment of

plurinational economic spaces is no longer an abstract notion, but a very concrete

imperative that stems from the international reality.

Until 1990 the non-aligned perspective in the face of antagonistic blocks

of countries facing each other for ideological or security motivations was still

valid. The vacuum generated by the sudden disappearance of the socialist block

was filled by the strategic and military unipolarity of the United States, without a

countervailing or balancing element. Nevertheless, the global challenges and

threats demand political agreement and modalities of transversal management

that transcend the limits of a perspective aligned with the unipolar vision

originating in the United States. This suggests that regional unity becomes even

more important in order to find agreement and to defend policies aiming at the

development of our countries, within an international framework marked by the

presence of a superpower and by the interaction of political and economic blocks.

As isolated actors our ability to dialogue in such a scene is minimal, even nihil.

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

106

Consequently, South America faces today the challenge of finding the best

possible niche in the global scene, on the strength of actions designed and

executed in an integrated way and as a group. Such a challenge, common to all

South American States, creates the need to bring our countries together with

links that provide for better communication, effectively and qualitatively, and

for bonds and interexchange among our national territories, as well as among

the integration mechanisms already existing in the region. This requires a

negotiated convergence of interests and national policies in order to identify the

modalities of linkage whose strengthening will facilitate development.

Ultimately, integration is a shared responsibility, a duty that stems from

similar social demands put forth by the citizens of South American countries.

The perception of the region as a converging ensemble of integration mechanisms

and national States stems from the similarity of our social contexts. In other

words, the notion of community inherent to the concept of regional integration

responds to the conjunction of governmental agendas facing common challenges,

either coming from citizens’ demands or imposed by the international panorama.

This concept is expressly included in the Declaration of Cusco, in December

2004, which spawned the South American Community of Nations. The

convergence of national policies was defined as a potential factor of strengthening

and development of the internal capabilities of our countries, to improve their

international insertion and access to higher standards of living for their citizens.

Our shared identity was characterized as the result of a history of struggles

against common internal and external challenges, as well as the expression of a

common vision of development based essentially on the commitment to respond

to the same social claims: the fight against poverty, the elimination of hunger,

the creation of employment and universal access to health and education. Thus,

the external policy of Peru’s new government matches the objectives of the

declaration of Cusco.

Peru and the new Alan García government

The government’s objectives are directed towards the social imbalance of

Peru, where half of the population is poor and one fifth live in conditions of

extreme poverty. In response to this situation, the fight against poverty is the

central priority of the Peruvian government. This leads its external arm to unite

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

107

its efforts with the countries in the region in order to push forward a development

agenda aimed at ensuring stable growth with equanimity and social inclusion.

Peru’s government also pursues the internal consolidation of governance,

supported by participation of the citizenry and by transparency in the conduct

of public management. The government’s objective is to increase the credibility

of the State through responsible management, drawing closer to the citizens

who live in the national territory or abroad. Within this perspective, the basic

purpose of the external action is to give privileged attention to the defense of

the rights of our compatriots abroad and to facilitate their integration in the

host country.

This government directive is coupled with the taking over of the

responsibility to deepen a culture of duty, as one of the pillars on which to

rebuild the relationship between the society and the State. The objective pursued

with this task has internal and external consequences. In the internal field the

goal is the increasing participation of the citizenry in the making of public

policies. Externally, the goal is to stimulate the population to gradually assume

the role of the protagonist in giving social content to the regional integration,

by means of the qualitative intensification of communication and interchange

across our boundaries. The government of Peru fully agrees that the growing

interaction between private corporations and civil society must be set in motion

from within the State, as a key factor of the dynamic integration of the South

American space.

The contemporary conceptual framework of the Peruvian foreign policy

stems from the notion of the stages where the external action evolves, in

accordance with the projection of its oceanic, Andean and Amazonian spaces.

This does not presuppose a set of concentric circles with decreasing influence

from the center toward the periphery, but rather the simultaneous convergence

of the different scenarios, granting to each one the priority and the specific weight

commensurate with each given set of circumstances.

The first circle, or stage where the external action is played out is the

immediate geographic space represented by the neighboring countries. The

second is the Andean and South American region, through the consolidation of

integration. The third is defined by the relations with the dominant, or hegemonic

world power, the United States, and the ensemble of other powers or blocks in

the rest of the world.

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

108

It must be noted that in the original concept of the relationships sketched

above, previously seen from a bipolar context, Peru’s relations with the rest of

the world were under the influence of the roles of the different actors vis-à-vis

the United States, as the hegemonic power in the continent. Today the relations

of Peru with the rest of the world seek the improvement of its insertion, through

integration into the blocks corresponding to its international projection.

At the same time, the multilateral level, understood as a field of external

action in itself, is defined by the convergence of two specific features of the

growing power of international organizations. On the one hand, the multilateral

sphere is capable of imposing decisions on States, and this conditions their margin

of action as far as political alternatives are effectively available. On the other, the

multilateral level is by itself a stage where negotiations about national interests

and aspirations are played out, with a view to imposing, or preventing the

imposition of, multilateral decisions. Consequently, multilateralism is the proper

space where countries with medium or low income can participate in the

formulation and approval of international norms, within an international

framework in which multilateral legislation gains a new and wider scope.

Nevertheless, it must be underlined that the widening of the scope of

multilateral action has resulted in the primacy of international law. The multilateral

constraint on the unilateral impulses of the remaining superpower is a pending

undertaking. Opposing tendencies, toward globalization or fragmentation,

coexist in the international system, and they generate global threats, create

insecurity and instability and weaken the ability of States to govern. The existence

of poverty, social exclusion and environmental degradation in a world scale are

huge challenges faced by multilateralism. Mutilateral action requires a holistic

view of such factors of disintegration and instability in order to ensure

international peace and security.

Again in the inter-State level, the central role of relations with neighboring

countries is a particularly relevant feature in the case of Peru, due to the location

of the country in the physical map of South America and the large extension of

its international boundaries. The transfer of the focus of Peruvian foreign policy,

from border problems to the political relationship with neighbors, sought to

stimulate the joint use of territorial elements of common interest, including in

situations where border disputes still persist. We are interested in cooperative

policies, rather than in policies of confrontation.

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

109

The axis of integration

Within this perspective, to generate and deepen the integration processes

at our borders and bilateral cooperation continue to be priority tasks in our

immediate geographic environment. This means that the management of the

several variables with each neighboring country must be directed to facilitate the

relationship in its entirety, keeping in separate channels the treatment of questions

where interests are not coincident or are divergent. The specific political objective

is to free the international projection from constraints and prevent bilateral

disagreement to become a paralyzing factor. Thus it is possible to preserve the

mobility of external action and to prevent the subordination of whole bilateral

relation to divergences.

In the case of Peru, the immediate surroundings are not restricted to the

relations with neighbors, since due to the geographic position of the country the

regional panorama is also a part of our neighborhood. There is thus a close

inter-relationship between contiguous vicinity and the regional scene. This means

that border integration is a promising field where synergies with the cooperation

by integration mechanisms can be found. The strengthening of our border

integration mechanisms is then coherent with the deepening of regional

integration, and vice-versa.

Within the Peruvian territory there is a convergence between the central

massif of the continental vertebral column formed by the Andes and the source

of the main South American fluvial basin, the Amazon basin. Consequently,

Peru plays a pivotal role in the natural axis that runs vertically through South

America, and at the same time forms with Brazil the nucleus of the transversal

Amazonian horizon, as well as the natural outlet towards the Pacific for the output

of that extended geographic space. For this reason, the Peruvian perspective of

regional integration has expanded, encompassing in sequence the Andean,

Amazonian and South American spaces, as well as its transpacific projection.

The identification of the Andean integration as an axis of external action

for Peru was an eminently political decision. According to its original

conception, along the lines of the late 60’s, the immediate objective was to

extend the scope of the national markets to allow for industrialization via

import substitution. Until then, the Andean countries had lived without

engaging in major trade among themselves, nor agreeing joint measures.

Nevertheless, the integrating model was conceived as a process which, on the

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

110

basis of a common market, would lead to political understanding to increase

the international presence of the whole.

The original signatories of the Cartagena Agreement of 1969 – Bolivia,

Colombia, Chile, Ecuador and Peru – worked actively toward the adoption of

a wide range of norms and regulations aiming at a significant increase of trade

among the Parties. The accession of Venezuela in 1973 required the renegotiation

of the industrial programs and soon after the military government that took

power in Chile demanded a review of the common regime on the treatment of

foreign capital. The debate on that issue caused Chile’s withdrawal from the

Andean group in October 1976. The departure of Chile called into question the

substantive aspects of the Andean development model and this in turn delayed

the economic integration of the remaining member States.

The political dimension of the integration process acquired impetus in

1979 when the Foreign Minister of Peru, then Carlos García Bedoya, promoted

the creation of the Andean Council of Foreign Ministers. That initiative

responded to the wish to articulate a common political response to the

Nicaraguan crisis. The Andean political action prevented military intervention

and provided for a solution at the fall of the Somoza dictatorship. Later in the

same year action by the Andean Council prevented the consolidation of a military

coup in Bolivia and ensured the return to democratic institutions in that country.

Such an experience of common political action linked Andean integration

with the defense of democracy and human rights. In the following year, 1980,

the Heads of State of all democratic governments in the Andean countries

underwrote a commitment to compulsorily defend individual rights and expressly

agreed that joint action to protect such rights does not constitute a violation of

the principle of non-intervention. The identification of democracy with

subregional integration led finally to the signature in 1998 of the Declaration on

the Commitment of the Andean Community for Democracy, an instrument that

permitted the inclusion, in the following year, of a democratic clause in the

Additional Protocol to the Agreement of Cartagena.

While the Andean region has been the preferred path by Peru to stimulate

integration, the Amazonian territorial component indisputably turns its external

action toward the central physical space of South America, with a view to ensuring

the coherent, effective and sustainable development of the Amazon region. The

initial formulation, in 1970’s, of that conditioning factor of Peruvian external

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

111

policy, aroused some skepticism. Nevertheless, the subject of the Amazon is

currently placed at the center of the international debate and will certainly acquire

increasing significance, since that space contains one fourth of the world’s

biodiversity and eight million square kilometers of forests shared by the eight

Amazon countries.

The signature of the Amazon Cooperation Treaty (TCA) in 1978 responded

precisely to the need to articulate common efforts to preserve and utilize in a

rational way the natural space we all share. In this connection, the strengthening

of the TCA through the creation, in 1998, of the Organization of the Amazon

Cooperation Treaty (Otca), constituted a strategic wager for each of its Parties

and for the region as a whole. As time goes by. the crucial ecological importance

of the Amazonian space in a global scale will only enhance the political role that

such an organization will be called to play, the real dimension of which is still to

a certain extent beyond our full grasp.

One must underline that the Peruvian interest in promoting Amazonian

cooperation, besides stemming from the natural importance inherent to the basin,

has significantly complemented relations with neighboring countries through the

work of the bilateral joint committees, so that within the Amazonian space actions

adopted in the local and regional areas can be mutually profitable.

The Andean and Amazonian composition of Peru is shared by the five

members of The Andean Community of Nations (CAN) This led CAN and

Otca to sign in 2004 a memorandum of understanding to cooperate in the

fulfillment of common interests and objectives regarding regional integration

and the conservation of biodiversity and natural resources, with a view to applying

the necessary measures to ensure the sustainable development of the region. It

was agreed that coordination and cooperation should be concentrated on the

areas of water resources, forests, soils and protected zones, besides questions

related to biodiversity, among others.

The understanding reached between CAN and Otca demonstrates

concretely the links among the regional mechanisms on which the building of

South American integration is based.

Since the latter part of the 1970’s Peru has stimulated the intensification of

that kind of bonds, with a view to facilitate the development of regional joint

action. The Andean political agreement of 1979, for instance, served as a model

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

112

for the Contadora Group, set up to mediate the Central American crisis of the

1980’s. The Peruvian government decided in 1985 to strengthen this mediating

instance through the creation of the Contadora Support Group, composed by

Argentina, Brazil, Peru and Uruguay.

On the basis of the linkage between both groups the mechanism of

consultation and political coordination known as the Group of Eight was

developed. Once expanded, it later became the Group of Rio, encompassing

all Latin American States under an informal grouping without institutional

support. The expansion of the Rio Group, however, diminished the force of

its action, since the increase of its membership entailed a reduction of the

ability to reach common objectives. The evidence shows that increase in its

representativeness coincided with the weakening of its international projection

and political action.

During the previous Alan García government (1985-1990), Peru also tried

to create a unit of political dialogue within the Latin American Economic System

(Sela), with a view to convert that organization into a System of Latin American

States that would encompass the political and economic interests of the region.

In keeping with the original project, the joint political experience of the Group

of Eight would be incorporated into the new Latin American system, according

to a model of political concert and economic integration that would include all

26 members of SELA. Nevertheless, this political project did not coalesce and

the organization lost its force during the 1990’s in the face of negotiations for

the creation of the Free Trade Area of the Americas (Alca).

It should be mentioned that in the formulation of the Latin American

initiatives proposed by Peru in the period 1985-1990 permanent foreign policy

objectives and ideological tenets of the Aprista Peruvian Party converged in the

government of that time. Not surprisingly, the name of that political group

stems from the American Popular Revolutionary Alliance (Apra), put forth since

the 1920’s by the founder and ideologue of that party, Raúl Haya de la Torre.

The original doctrine of aprismo sprang from the continental defense against

imperialism. According to the early reasoning of Haya de la Torre, the political

and economic unity of Latin America, or Indoamerica as he called it, was a necessity

in order to preserve freedom and oppose imperialist interests. Indoamerican

nationalism, in his view, went beyond political boundaries and encompassed the

wider nation formed by all Latin American countries.

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

113

Nevertheless, the limitations of the integrating models of Latin American

scope conceived in the Group or Rio and Sela, as well as in the Latin American

Integration Association (Aladi), led to the conclusion that it would be more

feasible to build South American unity on the basis of the sum total of existing

integration processes within the region. The most promising dynamics of

integration is the consolidation of joint action in smaller spaces, such as CAN

and the Southern Common Market (Mercosur), and then link it by stages into

wider systems. This view entails in parallel the intensification of physical, energy,

trade and cultural integration, without subjecting the agenda of common interests

to the coincidence of political ideology.

In the South American case, integration supposes that Brazil plays the role

of stimulator of the project of regional articulation. In this connection, Brazil

exercised in 2000 the regional leadership which befalls to it by proposing the

creation of the South American Community of Nations and promoted the

adoption of the Initiative for the Integration of the Regional South American

Infrastructure (Iirsa), which was conceived as the physical pillar or the community

project. The integration of the regional infrastructure is geared to the

reorganization of the South American space to promote its more competitive

insertion in the globalized context and create viable conditions for the

decentralized development within each State.

Brazil also demonstrated its commitment to the community project by

facilitating trade negotiations CAN-Mercosur aimed at the establishment of a

South American free trade zone. In 2003 the Peru-Mercosur agreement was

concluded, and in the following year Colombia, Ecuador and Venezuela followed

suit, as Bolivia had celebrated since 1996 an Agreement of Economic

Complementariness with Mercosur.

The collaboration between Peru and Brazil to shape the creation of the

South American Community of Nations was activated since the establishment

of the strategic alliance between both countries in 2003. That measure permitted

the conclusion of the trade agreement Peru-Mercosur which in turn facilitated

the signature of similar agreements with the remaining Andean nations, so that

by 2004 the instruments of physical integration and free trade needed for the

launching of the South American community project were already in place. That

political decision was formally taken later that year with the signature of the

Cusco Declaration.

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

114

Nevertheless, the achievement of the regional community project is still a

sizable pending task, even as it can also count on the dense integrating fabric

woven in South America. Its deepening requires the expansion of free trade

beyond goods and services and the strengthening of security, as well as the

development of the normative framework and financial mechanisms. The path

for physical integration opened through Iirsa must be emulated in the energy

and environmental fields, so as to strengthen complementariness and community

of criteria for sustainable development.

Finally, the greatest challenge is still the consolidation of a kind of political

coordination that allows us to acquire significant and effective international

projection. Globalization by itself does not facilitate the fight against poverty

and exclusion demanded by our societies. An inadequate or disadvantageous

insertion in the global world would affect the conditions of social cohesion in

the weakest States, whether of medium or low incomes. Accordingly, the joint

political action in South America requires a clear common view of the needed

model of sustainable development with social inclusion, as well as a real capacity

to promote and defend that common view in the international arena.

The regional orientation of foreign policy

The first stage of Peruvian external action, as we have shown, is the

immediate local environment. In the case of Peru, this environment coincides

with the physical bounds of the Andean integration and the Amazonian

cooperation. Our neighbors are our partners, or our associates in CAN. At the

same time, all our neighbors are Amazonian countries, with the exception of

Chile. With Brazil, moreover, we share the main Amazonian fluvial route and its

bi-oceanic projection. This means that the Peruvian policy towards its local

environment plays a major role in complementing the bilateral cooperation

measures with the initiatives of Andean and Amazonian cooperation.

Consequently, the intensification of our relations with neighboring countries

stimulates regional integration. Contrariwise, the Peruvian foreign policy would

play a dissociating role in the region.

The first external priority of the Peruvian government has been to lead an

active policy of tightening the links with the immediate local environment, with

a view to establishing agreed constructive bilateral agendas, above all in the

border zones which are the least relatively developed ones. In the execution of

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

115

this policy presidential and ministerial visits to neighboring countries have been

actively pursued. In his capacity as president-elect, dr. Alan García visited Brazil,

Chile, Colombia and Ecuador. Upon my appointment as Foreign Minister, I

undertook working visits to Brazil, Ecuador, Bolivia and Chile and received in

Lima my counterparts from Chile and Colombia.

Our objective is to concentrate our actions with our neighbors in the

identification and development of agreed common interests, being aware of the

projection of our policy toward our immediate local environment and of its

influence on the facilitation of Andean, Amazonian and South American

integration links.

Brazil

Brazil plays a key and privileged role in the framework of the neighborly

relations of Peru. The excellent state of the bilateral relations gives a positive

input to the political priority attributed to the deepening of the strategic alliance

between the two countries.

The ample bilateral agenda includes the substantial increase in trade, the

setting in motion of the physical and economic interconection in the framework

of Iirsa, through the bi-national axis Multimodal of the Amazon, Central

Transoceanic and Southern Inter-oceanic, cooperation in the system of oversight

and protection of the Amazon region (Sivam/Sipam), cooperation in the field

of energy, increase of air frequencies and the concretization of the joint use of

Peruvian port facilities in the Pacific.

The immediate objective in the current phase of the bilateral relationship

is to realize the physical integration between the two countries. The start of

the construction of the Integration Bridge between Iñapari, in Peru, and Assis,

in Brazil, and of the inter-oceanic highway opens the interconnection of vast

shared Amazonian frontier areas that require joint grater effort to overcome

their lower degree of relative development. The initiatives to consolidate the

joint administration of the tri-national basin of the river Acre constitute an

additional experience in the Amazonian trans-border and decentralizing focus

that must be deepened.

The social dimension of the Peruvian-Brazilian relationship has not been

neglected. In September 2005 the Agreement on Facilities for Entrance and

Transit, that abolished passports and visas between the two countries, entered

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

116

into force. Afterwards, in the beginning of the current year, on the occasion of

the visit of the Brazilian Foreign Minister to Peru, agreements to avoid double

taxation and prevent fiscal evasion, promote trade and investment, cooperate in

space science and technology and interchange management methods in agricultural

research and development were signed. The ensemble of agreements permitted

the increase in bilateral tourism and facilitated commercial, financial and investment

transactions, thus creating conditions for civil society and private enterprise to

undertake the task of providing social content to the physical integration.

In short, the relationship between Peru and Brazil can be considered an

example of synergy, where achievements in the bilateral field are in consonance

with the aims pursued in the level of regional integration, with special emphasis

in the decentralized development of the Amazonian frontier areas. The active

bilateral relations maintained with Brazil provide a sample of the dynamic

interaction model that Peru intends to consolidate with its other neighbors.

Chile

The Peruvian-Chilean relations have been significantly strengthened by the

inclusion of Chile as associate member of CAN since September 2006, thus

marking its return to the Andean sphere after 30 years’ absence. Previously, during

the visit of the Chilean Foreign Minister to Lima, the Free Trade Agreement

that follows the Agreement of Economic Complementariness of 1998 was signed.

For its part, Chile took the initiative to invite Peru to join the Transpacific

Agreement of Strategic Economic Partnership (P4), which currently brings

together Chile, Brunei, New Zealand and Singapore.

The reorganization of the relation with Chile is being undertaken through

the reactivation of the extensive existing bilateral architecture. The resumption

of the “2+2” meetings, which facilitate consultation and coordination between

the Ministries of External Relations and defense of both countries should be

understood in this context. At the same time, the Border Commission is charged

with continuing the process of integrated border control and of the ensemble

of questions of common interest to the population of that zone. The convening

of new meetings of the binational technical cooperation and limits commissions

is also contemplated.

The bilateral relationship with Chile is a concrete demonstration of the

advantage of undertaking common action in areas of common interest and to

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

117

proceed through separate channels to resolve controversial issues. In addition,

both countries enjoy conditions that facilitate the intensification of the

relationship, due to the high level of Chilean investment in Peru, to the large

Peruvian community living in Chile and the sustained growth of trade.

Ecuador

Relations with Ecuador were qualitatively redefined in 1998 with the

signature of the Brasilia Agreements, as the set of instruments reached thanks

to the generous mediation of Brazil, among other countries, is known. Within

that framework, the signature of the Wider Agreement of Border Integration,

Development and Neighborhood and of the Agreement for Acceleration and

Deepening of Free Trade put in motion an intense network of bilateral

interaction, in several fields, which is fully operative. Accordingly, the Peruvian

government has committed itself to the fulfillment of the pending parts of the

Brasilia Agreement in order to facilitate the deepening and intensification of

the bilateral relations.

In the specific case of the renewed Peruvian-Ecuadorian relationship,

the Neighborhood Commission, created in 1998, is the political and

representative instance charged with the execution of the programs and projects

of common interest to both countries. Likewise, the Binational Development

Plan encompasses a number of projects dealing with highway, fluvial and

administrative integration, of a scope hitherto unheard of, aiming at converting

the border area into a space of inter-exchange of goods and services and of

coordination of local policies among the populations of both countries.

It must be underlined that the physical integration projects envisaged

under the Binational Plan complement the decisions and measures adopted in

the framework of Iirsa. Approved projects also respond to pre-established

criteria of environmental sustainment, impact of social development and

inclusion. The employment of such criteria contributes to keep the significant

presence of international non-reimbursable cooperation in the financing

schemes of the Binational Plan.

The characteristics of the current Peruvian-Ecuadorian relationship

clearly show that the 1998 agreements unleashed the intense bilateral dynamics

that had remained constrained until then due to the weight of conflicting

interests.

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

118

Bolivia

The General Treaty on Integration and Social and Economic Cooperation

signed with Bolivia and recently ratified by Peru is the agreed framework to

intensify and solidify the ample ensemble of links that both countries have

traditionally entertained. That Agreement seeks, in essence, to shape a common

Peruvian-Bolivian market.

Border development is a theme area of special importance within the thick

bilateral agenda. In view of that, the Agreement on the Creation and establishment

of the Border Integration Zone entered into force within the framework of

Decision 501 of CAN. As complementary measures, in the following years

agreements of joint border supervision, migratory regularization and customs

cooperation have been signed.

Concurrently, the use and condominium of the waters of Lake Titicaca,

under the responsibility of an autonomous entity charged with the integrated

management of the lake basin is a recognized example of bilateral cooperation

in this field. Peru has also provided every facility to Bolivia for the use of the Ilo

seaport, including a customs-free zone and the development of a tourist project

in the Peruvian sea coast.

Finally, the Convention on Mining Integration and Complementariness

reached in 2003 and the Letter of Intention for Energy Complement signed in

2004 make up the binding legal framework adopted to deepen productive bilateral

cooperation.

The network of bilateral instruments described above clearly reflects the

wide reach of the traditional historic, social and cultural linking Peru and Bolivia,

and its rich projection.

Colombia

Peruvian-Colombian relations stand within the concept of a preferential

association that seeks integration as a corollary to political agreement, border

development, social and technical cooperation besides security and defense.

Cooperation in issues of security and defense is the central axis of the

bilateral relationship and this is one of the fields where much has been achieved

in the past few years. The common policy of security and defense was promoted

in 2002 with the creation of instances of ministerial cooperation and the signature

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

119

of conventions on air and fluvial interdiction. The common objective is to ensure

the flow and the dynamism of cooperation and the interchange of intelligence

information between the armed forces and the police of both countries. The

common interest in waging an effective fight against drug traffic has also resulted

in the strengthening of bilateral legal assistance and in the signature of a new

extradiction treaty.

In what concerns border development, the Neighborhood and Integration

Commission is responsible for the adoption of measures to improve the living

conditions of border populations. Its main activity is the design and execution

of health, food security and education projects. The exchange of experiences in

programs directed to social problems takes place actively in parallel by means

of the joint technical cooperation commission.

Finally, the Binational Plan for the Integrated Development of the

Putumayo river basin is charged with ensuring the sustainable management of

shared natural resources in the Amazon border area, in close coordination with

the measures adopted by Otca.

Regional lines of the foreign policy

Present conditions call the attention of the Peruvian government to the

consolidation of the two regional communities, the Andean and the South

American, and to the strengthening of their inter-regional relations. The latter

constitute the nucleus of the agendas of the V Summit of Heads of State of

Latin America and the Caribbean-European Union (ALC-UE) and the XVI

Summit of the Asia-Pacific Economic Forum (Apec), which will take place in

Lima during 2008.

Almost 40 years ago Peru identified the Andean environment as the

natural path for its international projection. Despite the comings and goings

of the Process of Andean integration, this continues to be our immediate

space of joint action. For this reason the Peruvian government and its Andean

partners have negotiated intensely and extensively in order to rescue, normalize

and modernize the process of sub-regional integration. The possibility of

withdrawal from the Andean group by Peru showed that the process would

lose it rationale in the absence of its historic, political and geographic pivot

and nexus. For this reason Peru keeps alive its wager on the strengthening and

international projection of CAN, with a view to perfecting the common

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

120

economic space with an institutional scaffolding that may serve as a platform

to facilitate integration with other commercial blocks and countries in the

framework of the global economy.

In parallel, as a last phase of the ensemble of integrationist experiences

amassed in the region, Peru and Brazil promoted in 2004 the shaping of the

South American Community of Nations (Casa), which rests on the convergence

CAN-Mercosur, together with Chile, and with Guyana and Surinam joining in

the regional integrating dynamics. The project is also based on the innovative

path of articulating and integrating the regional infrastructure in order to

reorganize strategically the shared physical space, with a view to the creation

of the necessary conditions for the promotion of sustainable decentralized

development and competitive global insertion.

The construction of Casa, a pending task that requires perseverance and

clear objectives, constitutes a South American priority, inasmuch as this political

and commercial project, as well as of physical and social integration, aims ate

ensuring the efficient insertion of the region into the international system. Its

realization will undoubtedly mean the appearance of a qualitatively superior

regional political and economic actor, in keeping with the notion of modernity.

Nevertheless, even if the central objective of consolidating Casa is kept

in force, the immediate priority from the viewpoint of the Andean countries

is to conclude the Association Agreement CAN-UE, including a political

dialogue, cooperation programs and a trade agreement, as agreed last May at

the IV Summit ALC-UE in Vienna, in accordance with the international strategic

objectives. The achievement of the association agreement CAN-UE will

constitute in itself an experience that will strengthen the concerted action among

the Andean countries, due to the kind of block negotiation that it entails. The

process of joint evaluation of the state of Andean integration was satisfactorily

completed last July and the definition of the basis of negotiation is in the

final stage.

The objective envisioned is that the signature of the agreement take place

in March 2008, on the occasion of the celebration in Lima of the Summit

ALC-UE, a meeting whose primary objective is to deepen regional inter-

relations in order to put together balancing measures in the face of the

predominant political, commercial, economic and cultural role of the United

States in the American continent.

José Antonio García Belaunde

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

121

Peru has also demonstrated a growing interest in participating actively

in the commercial development that since the end of the last century has been

gathering speed in the Asia-Pacific region. This led Peru to join Apec in 1998,

by adopting to this end the open economy model. As a reflection of the

Peruvian interest in the strengthening of its trans-oceanic projection, it was

agreed that the XVI Apec Summit would be held in Lima. The central objective

sought by Peru is to use the political opportunity of the organization of the

Summit to look for concrete competitive advantages for Latin American

countries that are Parties of that Forum. A complementary objective is to

push forth demarches aimed at facilitating the adherence of further South

America countries to Apec.

On the basis of our trans-oceanic projection, the Peruvian government

envisages to propose the creation of a Latin American Pacific Association.

This initiative seeks to include CAN, and Chile as an associate member, in an

economic mechanism that encompasses the countries in Central America and

Mexico. The proposal also contemplates the facilitation of the adhesion of

Ecuador and Colombia to the Apec Forum. Its strategic purpose is to

strengthen the commercial position of the ensemble of countries in the Asia

pacific markets.

Finally, the holding of the Apec Summit in Lima brings a useful

opportunity to explore measures through which the South American countries

may articulate themselves in a wider and more profitable manner with the

dynamic Chinese economy, in view of its aggressive commercial expansion.

The weighty role currently played by China in the world economy and, above

all, its projected growth, require a concerted regional response given the

powerful dimension of the Chinese economy. The positive insertion of Peru

and South America in Asia requires the reevaluation of the relation with China,

with a view to the qualitative strengthening of the exchanges with the rapidly

growing market of that country.

By way of conclusion

The main lines of Peruvian diplomacy are adjusted to the new realities

and challenges. The Peruvian diplomacy of President Alan García’s government

is defined by a dynamic of building agreement and of the construction of

scenarios that lead to renewed structures of cooperation.

A strategic regional view of Peru’s foreign policy

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

122

This diplomacy seeks an international insertion which is competitive in the

economic field, supports the primacy of multilateralism and International Law

in the political realm, affirms democratic governance and the defense and

promotion of human rights in the social terrain, with an effective program of

struggle against poverty and social exclusion, and in the cultural area rescues

and enhances internationally the rich cultural heritage of the Peruvian nation.

Peru does not intend to tackle that task by itself. It will be performed

much better with the concurrence of our neighbors in the region.

Version: Sérgio Duarte.

DEP

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

123

ebate on the issue of what constitutes Surinamese literature has spanned

the years. It is not confined to the country itself: the question has been raised well

beyond its borders, particularly in the former mother country, the Netherlands.

To this very day the question is posed. That betokens continued uncertainty in a

country that gained its independence just thirty years ago. The legacy of the

colonial past has not always been adequately assimilated. This is especially the

case in former colonies that do not always know how to deal with this part of

their history. Should this issue simply be brushed aside or is it so crucial that it

deserves debating?

This article aims to provide an overview of Surinamese literature. Brief

considerations will also be made about literature written during the colonial

period and in the years following World War II. Literary output began to increase

in volume in the latter period, particularly in the 1970s when independence

triggered a flourishing of Surinamese literature. The focus will be not only on

authors then or still active in Suriname itself but also on writers of Surinamese

origin resident and published mainly in the Netherlands.

Suriname by its authors

Jerome Egger*

* Professor Anton de Kom University, Suriname.

jlegger@yahoo.com

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

124

An approach

A debate that took place in the Netherlands more than ten years ago raised

certain points that remain on the agenda in discussions of Surinamese literature.

At the time, Anil Ramas claimed that in actual fact Surinamese literature had

failed. How had it failed? He supported his provocative claim by offering

examples of well-known novels by Surinamese authors which cannot be cast

into the shade by other Caribbean writers. Anil Ramas said that writers in his

native country cannot perceive this fact. Furthermore, he argued that writers

should not always feel obliged to help in the business of nation-building. Rather,

he wished they would describe and probe people’s behaviour, plumb the reasons

for their acts, and reveal their inner motivation. They should likewise prove

capable of reflecting despair. Ramas’ harsh tone can be explained by his desire

to set the ball rolling in debate on Surinamese literature. This type of introductory

gambit frequently causes a wave of reactions. Once such reaction came from

Michiel van Kempen. He said it was easy to find examples of Surinamese

literature to support the claims Ramas had made. On the other hand, though,

many of these examples could be found in the author’s own complete works. He

also pointed out that there are plenty of poems displaying sentiments and

emotions that range from fright and perplexity to repudiation and despair. He

drew attention to a key issue: the small size of the community sharing Surinamese

experience. This naturally affects what a writer seeks to write and what he prefers

to keep to himself. This does not, however, imply that quality will be impaired.

Writers occupy themselves with Suriname and certainly attempt to explain what

goes on in its vicinity. Hope is a legitimate aspiration, van Kempen argued.

The second reaction to Ramas’ opening gambit came from Thea Doelwijt.

In an ironic, sarcastic article in the form of a short play, she exposed the absurdity

of some of his allegations. To give the play extra punch, it takes place partly in

Casablanca, a potential allusion not only to the famous Hollywood film but also

to the double Diaspora: away from the native country and away from the former

colonizer.

Such reactions show that Surinamese literature was capable of provoking

a great variety of reactions, and that all found it hard to reach a consensus as to

what precisely should be considered as belonging to the category. At about the

same time a congress was held in Suriname on the prospects for Surinamese art,

at which literature was also discussed. Writer Robby Parabirsing gave his view

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

125

of the country’s literature. One important aspect of Surinamese literature, he

said, was the absence of criticism. In his opinion, “writers and poets cannot

develop and improve their work without effective literary criticism.” When literary

criticism eventually came into its own in the eighties, a whole generation that had

been active in the sixties and seventies had sadly already moved to the Netherlands

or died. One can, of course, start over afresh. He also warned that exaggerated

demands should not be made by the critics because this could have the opposite

effect. He explained that criticism in the eighties expected too much of the

literature of the day. The result was that writers were discouraged from publishing

their work. In his article, Parabirsing also commented on another feature of

Surinamese literature: the lack of self-criticism. It took until the late nineties for

regular criticism to appear.

By observing these two moments in the early 1990s, we can draw certain

conclusions. Firstly, discussion about Surinamese literature were not confined to

Suriname but also took place in the former metropolis. Many Surinamese who

emigrated to the Netherlands in the sixties and especially in the period around

the 1975 declaration of independence continue to nurture very strong bonds to

their native land. This has led them to be irrevocably engaged in debate on any

issue relating to their motherland, literature included. Another conclusion drawn

is that the writers have undoubtedly taken into account the issues they tackle.

That is visible in van Kempen and Parabirsing’s articles. The third conclusion is

that something or other is still lacking for Surinamese literature to come of age.

This is the debate that occupied the early nineties. Time has not stood still

and the scenario has changed somewhat. A group of writers formed in 1977 is

increasingly active. The weekly literary page in the press has devoted special

attention not only to local literature but also to Caribbean and Latin American

writing. Publishers in Suriname and the Netherlands are now increasingly willing

to launch books to kindle the debate. That was not the case in the past. Another

major step forward is the possibility of participating in seminars and congresses

held abroad. Writers resident in Suriname are increasingly being invited to talk

about their work elsewhere. Finally, a number of international congresses have

been organised in Suriname itself.

The first congress that merits mention was held in 1997 when the 77 Writers’

Group (Schrijversgroep ’ 77) celebrated its twentieth anniversary. A number of guest

speakers from the Guianas, Dutch Antilles, Trinidad and the Netherlands took

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

126

part in this event. The former chairman of the group, Frits Wols, has said that it

“endeavours to ensure Surinamese writers and poets can conserve or discover

their dignity and express themselves without any kind of linguistic restraint.”

He points out the restrictions imposed by writing in Dutch on a continent

where no other country speaks the language. Be that as it may, the event proved

successful and well attended. It enabled those interested to address the various

aspects of the literary enterprise at local and international levels. Furthermore,

it allowed considerable attention to be focused on the literature in the media

beyond Suriname’s borders.

The second congress took place in November 2002. It was an international

literary festival called “Het Woud der Verwachting” (The Forest of Hope) and was

attended by numerous Dutch institutions and writers. A considerable stir was

caused by some Surinamese writers refusing to participate in the event for various

reasons. The festival evenings received an extraordinary number of visits and

presentations were not confined to the capital, Paramaribo but spilled over into

other districts. Surinamese from all walks of life, but especially school and

university students, were confronted with work by authors from other countries.

Care was taken to hold debates that would induce people to reflect. An occasional

push in the right direction does no harm in literature. And that is what happened.

In brief, the groundwork discussions for establishing an approach to

Surinamese literature did take place but failed to reach a consensus. Controversies

have not yet been allayed in the first decade of the 21

century. Every so often

they surface again. Today, there are more writers living and working in Suriname,

who publish their work here. They express a certain pride in being Surinamese –

and that is all. They differ from poets of the sixties and seventies whose nationalism

often left its mark on their work. The quality of the writing has improved, and

international contact has enabled their work to be assessed beyond the country’s

borders.

Certain vitality is apparent in Suriname’s literature, whether or not it reflects

a particular orientation.

The early period

We shall now proceed to provide a chronological overview of the

development of Surinamese literature. A good place to start is the oral tradition

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

127

of the original inhabitants of Suriname, the Natives. Much of their knowledge

and sentiments about their own past was recorded in song. A song recorded in

Callaloo describes a great ship that brings cannibals to devour them. Is this a

reference to white Europeans arriving in the Americas who, not literally but

figuratively speaking, devoured the indigenous peoples driving many

communities out to the margins of society? A great deal of interest is now being

taken in the viewpoint of these peoples who, in their own manner, have created

a literature that is now increasingly recorded in writing.

Another culture (cultures, actually) that has a strong oral tradition and

merits attention is that of the different groups who have descended from fugitive

slave who set up their own communities in the Surinamese hinterland and, in

their own way, expressed the events unfolding around them. They too have

contributed to the country’s non-written literature. Over the years, their tales,

songs and other cultural expressions have drawn the attention of scientists from

a variety of countries. This interest has helped bring their culture, which is part

of Suriname’s multicultural patchwork, to light.

The books written about Suriname cannot strictly be deemed Surinamese

literature. Even so, a novel set in the region deserves comment. Aphra Behn

wrote “Oroonoko or the History of the Royal Slave” in 1688. The Antilles

writer Frank Martinus Arion holds this is one of the first novels to be written,

countering the traditional claim that the novel emerged in the first half of the

century. According to Arion, Behn used the situation in Suriname and the

wrangles surrounding the royal couple as a parallel for the political struggle

unfolding in 17

century England. Treason is thus a kernel theme. Arion argues

that Behn must have been in Suriname because his descriptions of nature are

highly authentic. This is a moot point, however. What really matters, though, is

that Suriname is the stage on which the action of the novel is played out.

A number of books were written about Suriname in the colonial period.

They were the work of travellers, plantation owners and other people who visited

the country for varying lengths of time. These writings generally have more

historical than literary interest. Some have come to be viewed as classics because

they established an image of Surinamese society in a particular period. There

were also societies that encouraged reading and promoted the publication of

poems and other literary works. The quality is variable.

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

128

The end of the 19

century saw the emergence of several local writers

publishing work of higher quality and who played an important part in the

country’s literary development. The novels written by a Roman Catholic priest,

François Henry Rikken (1863-1908), have a specially linguistic importance. The

most well-known of these is “Codjo de Brandstichter ” (Codjo the arsonist), a

historical novel about Codjo, who in September 1832 started a major fire in the

capital that reduced a great many houses to ashes. He was arrested along with

several other people and was burned at the stake in January 1833. Rikken tells

the tale convincingly, partly because, wherever possible, he resorted to authentic

sources so as to provide the reader with “a faithful sketch of Paramaribo, as well

as a detailed account of the fire of 1832.” All this makes the book worth reading.

Nonetheless, 21

century readers may be less enchanted to know that Rikken

have considerable importance to the fact that Codjo converted at the last and, as

he walked to the stake, begged for forgiveness. That, of course, does not make

the book any less noteworthy for Surinamese literature since it offers such a fine

portrait of society at that time.

The first half of the 20

century saw the publication of a number of books,

and Surinamese newspapers published some literary works, too. This was a period

of enhanced Negro awareness, and that led larger numbers of Surinamese of

African descent and other racial mixes to engage in the cause and express

themselves through the medium of literature. Anton de Kom (1898-1945)

published a book that was to be highly influential among the generation of

Surinamese that went to study in the Netherlands in the 1960s and 1970s. He is

also well known for his poetry.

Another important author from this period is Julius Koenders (1886-1957).

It was he who encouraged the use of the Sranan tongue, a creole language that

most Surinamese spoke – and indeed still speak – and that was initially used as a

contact language between slaves and whites. It was subsequently adopted by the

different ethnic groups descended from slaves in the coastal region, who consider

it their native language. As the editor of a paper published exclusively in Sranan

(Foetoeboi), Koenders championed the emancipation of this racial group and the

use of their language.

Finally, there is a representative of the contract workers who began to

emigrate to Suriname in 1873 hailing from what is now India. Rahman Khan

(1875-1972) was born in the Indian subcontinent and arrived in Suriname in

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

129

1898. He wrote poetry that, although it may not be of a particularly high literary

standard, has a certain historical value. A translation of his autobiography has

recently been released. For these reasons, he has become a landmark figure in

Surinamese literature.

Albert Helman

Albert Helman, the pseudonym of Lodewijk (Lou) Lichtveld, was born in

Suriname in the year 1903. He is a writer who deserves separate treatment, partly

because his literary activity spanned many decades and he bequeathed a large

volume of work, but also because he wrote several books that have undisputedly

become classics. Besides contributing to newspapers, he was also a composer,

writing the soundtrack for the first Dutch talkie. He died in 1996. His work thus

spanned several periods of Surinamese literary history, making him a Surinamese

man of letters of considerable status. Young writers who came to the fore in the

sixties and seventies levelled criticism at Lodewijk, questioning whether he should

be considered a Surinamese author. In the eighties and nineties he was largely

reinstated and the issue of whether or not he is Surinamese is no longer raised.

Lodewijk spent a good deal of his life outside the country, living for longer

or shorter spells in the Netherlands, Spain, Mexico, Tobago and Italy. Nonetheless,

his ties to Suriname (at times positive, at others negative, especially after the

military coup in 1980) remained strong, and this is visible in his work. Moreover,

he can be considered something of a connoisseur of Surinamese culture and society.

He wrote on anthropological and historical themes. Here, we shall confine our

focus to his fiction and those of his works which have attained some importance

for the country’s literary history.

In 1926, he published “Zuid-Zuid-West” (South South West), which painted

a spirited portrait of Suriname. A solitary man living in the Netherlands casts a

look back at his native country. It is worthy of note that, as early as 1926, Helman

wrote the preface to the book in Sranan. At the time this was an unacceptably

bold move, since Sranan was not even deemed to be a language proper. Speaking

it was viewed as a high road to backwardness because it would hamper command

of the Dutch language. Another typical feature of the book is that it actually

accuses the Dutch of letting their colony “wither… to a dry desert.” Additionally,

Helman criticised the Dutch for being interested solely in creaming off the profits,

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

130

not in investing in the country. He even went as far as saying that for centuries the

Dutch had been thieves. He quipped sarcastically that he hoped they might at

least be “tender thieves and not villains.” This book still merits a read today, and

it has been republished several times.

One of Helman’s best known novels is “De Stille Plantage” (The Still

Plantation), which is still a set book in Surinamese schools. This is probably the

book that established his reputation. It is a historical novel describing life on a

plantation before the abolition of slavery. The opening sentence gives a clear

idea of how intelligent the descriptions are: “Memories are like startled birds

beating their wings across the rooftops, hardly brushing them before launching

into the air again.” The high points in the novel are the descriptions of nature

and the period atmosphere. It tells the tale of a French couple who set sail for

the West Indies to make a new life for themselves. But idealism in a slave-trade

society can lead to ruin – and this is what happens. Death and destruction in

such circumstances inevitably lead one to look back, and return to Europe

generally seems the only way out. That proved the fate of part of the family.

In old age, Helman wrote “Hoofden van de Aoyapok! ” (Aoyapok Heads!),

published in 1984. The novel is about an expatriate who has left his own

environment and fails to adapt anywhere else. His return to his birthplace at the

end of the story is a fiasco. The fragmentary tale is told by the native Malisi. A

play has been made of this novel, which has been performed in the Netherlands

and Suriname.

Finally, brief mention should be made of Helman’s great historical work,

“De Foltering van Eldorado” (The Faltering of Eldorado), which appeared in 1983.

It provides a detailed description of the Guianas: Helman does not confine his

analysis to the parts colonised by the British, Dutch and French, but widens the

focus to take in parts of Venezuela and Brazil. To do so, he resorts to ecological

similarities and the affinities that link the natives in the region. On the one hand,

the book provides an extraordinarily rich historical account, with wonderful

descriptions of nature, the potential and setbacks for the region, set against the

sweeping backdrop of this vast tract of land’s past history. On the other hand,

its treatment of the 20

century must be viewed more critically. He did not

refrain from making several very harsh comments that have left a misleading

image of the development of several countries in the region. Helman’s positive

and negative talents are on display in the book. Despite these restrictions,

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

131

Helman’s work remains unique and unrivalled in Suriname and, in all probability,

only a handful of people can match him beyond its borders.

The year 1957

The year 1957 is often considered the starting point for Surinamese

literature. Why? That year saw the publication of an anthology of poems by

Trotji (Aanhef) van Trefossa, the pseudonym of Henry de Ziel (1916-1975).

Why did this particular anthology become so crucial? Firstly, on account of the

quality of the poems, but also because they were written in Sranan. For the first

time proof was provided – in the eyes of those who refused to consider Sranan

a full-fledged language – that subtle thinking could be expressed in that tongue.

This was a watershed concerning the publication of poetry in Sranan. It is also

noteworthy that the anthology was dedicated to Koenders, the writer who had

first sought to raise the status of Sranan. It must be said, however, that many of

the poems published subsequently in the language failed to attain Ziel’s high

standard.

Trotji’s slim anthology was a selection of 19 poems. He succeeded in

expressing and arousing sentiments, customs and images that many thought could

not be rendered in the Sranan tongue.

One of the most beautiful associations is found in the poem Kopenhagen.

In the Danish port he observes the statue of the mermaid that the Danes and

others associate solely with the Andersen fairy tale. Trefossa sees it from another

angle. He associates it with the watramama of Surinamese folk legend. Others

might pass the statue by but Trefossa weaves a connection with the culture of his

homeland. The exclamation of surprise “eh-eh” has since been assimilated into

poetry but it gives the reader a unique touch. He addresses the statue, saying

“Watramama mi sabi ju” (Watramama I know you) because really does know it

but in an utterly distinct context from the Danes.

Others take “Bro” to be the most outstanding poem in the collection. Eersel

argues that in this poem Trefossa shows that “he feels deep down that the world

into which he was born is not the world of his dreams and may never be so.”

To Eersel’s mind, though, the gap between reality and dream is where poetry

flourishes. To him, “Bro” is the key to Trefossa’s art.

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

132

The sixties and seventies

The sixties and seventies are the period when Surinamese literature

flourished. A variety of novices took up the pen and began to write poems,

short stories and, occasionally, novels. Interest in literature in school grew. Events

and well-known, crowd-drawing figures saw to it that writers became visible.

The way in which the writers presented themselves and reached “man and woman”

alike also played a direct part in the sea change. There were very few publishing

houses in Suriname, so the writers were obliged to print and sell their own books.

Dobru (pseudonym of Robin Raveles, 1935-1983) was particularly good at this.

He was virtually ubiquitous, carting his booklets of poems or short fiction with

him for distribution. Several other writers soon followed his example. They often

went to the schools where they presented and sold their work. As a result, their

literature was distributed to all social segments and classes.

A major launch pad for this literature on the rise was the literary magazine

Soela, first issued in 1962. The editors included established poets and writers like

Trefossa or people who would go on to become authorities in the field, like

Corly Verlooghen (1932). The writings of Bea Vianen, later to publish very

controversial novels, first appeared in Soela. Influential intellectuals like Jnan Adhin

and Hein Eersel also contributed to the magazine. The illustrations and covers

were the work of Stuart Robles de Medina, one of Suriname’s finest artists. The

magazine ran for two years, until 1964, publishing seven issues, two of which

were double editions. It was an excellent jump start and the magazine soon became

a collector’s item, not only for its content but also for the projection it achieved.

The first issue of Soela (which means acceleration in an electric current)

provided some interesting points of view that were highly significant for the

spirit of the day. Suriname as a whole was undergoing a sort of acceleration in

its electric current. Large-scale economic projects sprang from the ground,

increasing numbers of Surinamese were afforded the opportunity of studying

abroad – mainly in the Netherlands – and the country’s gates to the outside

world were flung wide open. Soela reached beyond Suriname’s borders and its

language policy ensured that all the languages spoken in the country could grace

its pages. Indeed, the first edition contained a poem by Shrinvási written in

Sarnami, a language spoken by the Indian contract workers together with its

Dutch translation. There were also poems in Dutch, English and Sranan. One of

the poems was about the crisis in the Congo. A great deal of interest was shown

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

133

in events outside Suriname. A number of short stories and prose fragments

were also published. For the first time, the country’s multilingual make-up was

on display.

Poets revealed by Soela include Bhai (pseudonym of James Ramlall, 1935)

and Jozef Slagveer (1940-1982). Bhai published just one book of poems, “Vindu”,

in 1982, for which he immediately won a prize. His poems have a philosophical

slant and are clearly influenced by western and eastern philosophers.

Jozef Slagveer, on the other hand, belonged to the nationalist movement

of the sixties. As a journalist, he was often on a collision course with the authorities.

His disclosure of scandals did not go down well with those in power. Besides

writing poetry, he published one short novel.

A number of novels, that have since come to be seen as classics, were first

published in the sixties. Two of them are undoubtedly world class. Leo Ferrier

published “Atman” and Bea Vianen, “Sarnami, Hai.” Ferrier’s book describes

how a man who returns from Europe to his birthplace attempts to reconcile the

various cultural values of his homeland with his own multicultural background.

In every respect, this is an optimistic book because harmony can be attained.

However, Ferrier published a second novel which is the precise opposite, a book

narrating the domestic conflict of his homeland – anything but a tale of optimism.

Bea Vianen’s work has never been very optimistic in outlook. “Sarnami,

Hai” (I am Suriname) describes the rite of passage into adulthood of its main

character, Sita. Surinamese society is not orderly, its stark contrasts affecting all

walks of life. In the end, Sita is obliged to leave her son when she seeks to depart

the land where she was born. This remains one of the most frequently read books

on the Surinamese school syllabus. Later novels by Vianen have also become

well known.

Many writers became active in the sixties and seventies. Naming them all

would be beyond the scope of this article. We shall focus, instead, on three more:

Dobru and Srinivasie (mentioned above) and Michael Slory. Dobru is, without

doubt, the most well known. He was everywhere to be found, he was a good

communicator and took an active part in politics, especially in the nationalist

movement. His poem Wan Bon (A Tree) remains a Surinamese favourite. It stresses

the uniformity of the various cultures comprising Surinamese society. His

autobiographical description in Wan Monki Fri is very interesting because Dobru

clearly portrays his origin and how religion helped shape him, his social class

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

134

and the burgeoning nationalism of the fifties. Moreover, he was very frank in

expressing his opinions and denouncing social conditions.

Shrinivasie published his work, which covers a variety of subjects, in

different anthologies. Some agree that uniformity can be achieved in Suriname

while others take a more philosophical approach to the issue. While praising his

homeland, Shrinivasie is more critical of developments that have hampered

freedom over the years. A collection of his poems bears witness to the thematic

variety. He describes the districts where he was raised and entered adult life but

also refers to the Dutch Antilles where he subsequently lived and worked. He

travelled throughout Latin America and saw much injustice, the subject of many

fervent poems. In Sangham, though, the philosophical tone of an older man

prevails, one who can now tackle the subject of death. Shrinivasie is considered

one of the most important Surinamese poets in activity in the 21

century.

The last of the three is Michael Slory (1935), one of the most productive

writers of his generation. He has been writing poems in several languages (Dutch,

Sranan, Spanish and, more recently, English) for more than forty years. His poems

still appear in one of the Surinamese dailies, mostly poems focusing on current

affairs. In his collected works “Ik zal zingen om de zon te laten opkomen” (I shall sing

to make the sun rise) not only show the issues that concern him but also

demonstrate his prowess in a variety of languages. The district where he was

born and raised is the subject of some of his poems. He is solidary with the

downtrodden. Surprise is to the fore when he comes across something in nature

that holds his attention. Some of his poems seek to capture the fleeting moment.

The beauty of women fascinates him. His (to date) most recent collection has

poems abut freedom in which he refers to slavery and exclaims: “People, never

forget that!”

The last three decades

Suriname became independent in November 1975. Extraordinary growth

in literary output ensued, virtually all continuing or developing the themes

broached in the sixties and seventies. Independence was accompanied by a great

wave of immigration to the Netherlands. Shortly after independence about half

the population of Suriname moved to the Netherlands. To make matters worse,

a military regime took power in Suriname in February 1980. That, however, did

Jerome Egger

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

135

not dampen literary zest. The fact of the matter is that it did indeed make it

harder to publish books. Paper was scarce, printing costs rocketed and the

growing poverty of the population could also be felt in the bookshops.

What is the Surinamese literary scene like now? Looking back over the

first half of the first decade of the 21

century, certain trends can be detected. A

positive development is that literature for the young now merits considerable

attention from Surinamese authors. Gerrit Barron (1951) and Ismene Krishnadat

(1956) are just two writers who have written successful children’s books. Robby

Parabirsing (writing under the pseudonym Rappa, 1954) has written books for a

slightly older audience, his humour and light erotic touches being highly

appreciated by youngsters. Thus a new audience has been formed, who see reading

as a highly enjoyable occupation. That alone is something to celebrate. All these

writers have kept up the tradition of visiting schools to give readings of their

work. This has established direct ties with the readership. Gerrit Barron distributed

his books through schools, achieving high printing demand. Despite the problems

mentioned earlier, a considerable quantity of books was sold in the eighties.

These writers also sought to launch their books in the Netherlands. Barron

expanded into the literary market of the Dutch Antilles.

One of the most outstanding poets in this period is Surianto (pseudonym

of Ramin Hardjoprajitmo, 1937). He is one of the few Javanese writers in activity.

His poetry is influenced by Shrinivasie. He drew critical attention because he

wrote poetry in both the language of his Javanese parents and in Dutch. The

cultural influence is patent. One poem, “Een Bos” (A forest) focuses on

discrepancies between Javanese Muslims – who face a certain direction at prayer

because they traditionally did so in their homeland and so continued to do so in

Suriname – and others who face the actual direction of Mecca. These poems are

a rich contribution to multicultural cohabitation.

Finally, mention should be made of Cynthia McLoed Ferrier (1936). She

is the elder sister of L.H. Ferrier. In 1987, one of Suriname’s few publishing

houses published “Hoe duur was de Suiker?” (How much does the sugar cost?), a

historical novel set in the 18

century. By Surinamese standards, the book has

been a phenomenal success. Reprints followed in hot succession with more than

10,000 copies being sold. It has also become a best seller in the Netherlands. The

main subject of the novel is slave society in the 18

century. The title alludes to

the fact that the sugar consumed in Europe was produced at a very high price.

Suriname by its authors

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

136

Slaves were required and their suffering was very great. That passage of history

has been brought alive for many readers by this book. All her subsequent work

has received considerable publicity and reached a wide readership.

In conclusion, it can be claimed that Surinamese literature has progressed

from the writings of Dutch colonial authors to the production of work by authors

of diverse ethnic backgrounds now contributing to enhance the country’s creative

potential. Oral literature, independently published booklets and the big publishers

who have the courage to publish books with a wider readership, all comprise

Suriname’s current literary scenario. The Netherlands continue to exert

considerable influence and a growing number of Surinamese authors seek to

gain a foothold in the Dutch publishing market.

Surinamese expatriates in the Netherlands are increasingly productive and

manage to figure on the bestseller lists. Translated works occasionally provide

international readers with access to the work of Surinamese writers. In brief,

problems abound but Surinamese literature is not is by no means in the doldrums.

More bookshops have opened, enabling Surinamese readers to purchase books

by local authors and writers from other countries.

Version: Mark Ridd.

DEP

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

137

Mercosur: quo vadis?

Gerardo Caetano

oday, national political systems of the region, regional institutions, and

in general all of Mercosur as a regional integration and cooperation system are

faced with particularly challenging circumstances. More than fifteen years after

its establishment, Mercosur accumulates a mass of unsolved problems: to a larger

or lesser extent, some of its governments have suffered from discredit and

weakness; often in recent years, agreements and commitments undertaken have

not been fully complied with, particularly after Brazil’s 1999 devaluation and

Argentina’s collapse in 2001; the recent signs of growth have begun to create

favorable conditions for the recovery of national economies and societies, but

other than speeches and a few relevant actions, the integration process has failed

to experience the often mentioned and hoped for “relaunching.” However,

immediately after facing its worst internal moment, Mercosur has found an

opportunity for revitalization, as much expected as it is debated. It can count,

for instance, on an external agenda as never before, fraught with opportunities

* Historian and political scientist. Professor of the University of the Republic, Uruguay.

[email protected]

1. Correspondence between philosophies and integration-

oriented institutions

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

138

(as regards the possibility of trade agreements of different kinds with other

blocs or countries, including the European Union, China, Japan, Russia, South

Africa, and in the domain of the WTO, among others). Despite all its problems

and frailties in an international environment threatened by a unipolar hegemony,

Mercosur maintains its identity as a bloc in interaction with other blocs. This

notwithstanding, it does not seem to find the most appropriate ways for actually

adopting common, consistent positions to negotiate as a bloc with third parties.

All discussion about integration philosophies implies a confrontation of

proposals on how to think institutionality of the bloc in the process of being

formed. The choice of one model is determined by the preference for a given

institutional format.

To think “another” Mercosur, different, more compact

and effective than the current one, capable of assuming a definite international

identity in a world of blocs and multilateral tensions implies an in-depth discussion

of the political limits and scope of the process. In this connection, the

requirements of a new Mercosur institutional identity stir up polemics in the

region. But polemics is welcome if its rigorous conduct permits us to go beyond

often distressing circumstances and incites us to take risks and to avail ourselves

of the opportunity to think of regional development from a longer term

perspective.

The current call for a new, in-depth discussion of Mercosur’s institutionality

has many implications of different kinds: the novelties and proposals in this

regard are directly linked to the renewal of models and agendas as well as the

pace and depth of the integration project. Thus, it should not be surprising

that institutional issues should elicit harsh confrontation and disqualifying

simplifications. Behind the debate on the institutionality of a process, players

display their more substantial strategic and structural differences. As Table 1

shows, the first answer we give to the issue of institutions as we discuss it at

Mercosur is that at the center of the debate are the more general models and

projections regarding the limits and scope of the integration process as a whole.

In brief, the proposal of “another” Mercosur requires a new institutionality.

For a useful, up-to-date comparative analysis of the parliamentary component of regional integration

processes in Mercosur and in the European Union, see Marina Vazquez “Sobre la dimensión parlamentaria de los

procesos de integración regional. El Mercosur y la Unión Europea en perspectiva comparada a la luz de los desafíos del Area

de Libre Comercio de las Américas,” in Revista Argentina de Ciencia Política, No. Especial 5-6. Editorial Universitaria

de Buenos Aires, 2002.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

139

An alternative Mercosur requires a new set of proposals and initiatives.

What would be a succinct list of items on this new agenda? We may point out a

few: macroeconomic coordination, particularly as regards exchange policies;

productive complementation, through Competitiveness Forums and the

emergence of Mercosur “productive chains”; complementation of policies

(energy, education, culture, human rights, etc.); infrastructure complementation;

consolidation and effective application of Mercosur’s Social and Labor Charter;

earnest consideration of the already agreed proposal on the free movement of

persons; recognition of asymmetries and flexibilities, particularly in relation to

Paraguay and Uruguay; full, incremental implementation of Mercosur’s Structural

Convergence Fund-Focem; international negotiation as an economic and

commercial as well as political bloc with third parties and international forums;

common trade strategy; intrazone financing strategies; incorporation of new

partners; a new institutionality. A recent document issued by the President’s Office

of Mercosur’s Permanent Representatives Commission-Cprm, of July 13, 2006,

titled “Challenges to regional integration. Initiatives and Proposals” , identifies an agenda

of “strategic axes for the formulation of public policies” very similar to the one

mentioned above: “mechanisms to redress the asymmetries among countries;

thrust to production coordination on a regional scale; expansion of the common

external agenda; development of instruments for integrating border areas;

intensification of cooperation and energetic integration; greater impetus to

common environmental policies; establishment of a Regional Council on Social

Policies; definition of a communications strategy; citizens’ participation.”

There is no lack of ideas or proposals that could lead to a common program

aimed at forging “another” Mercosur. Similar ideas can be found in many

documents, as those embodied in the proposal known as We are Mercosur – Concept

and Work Plan adopted in the second semester of 2005 by Uruguay’s first Pro-

Tem Presidency of Mercosur and then by the whole bloc. Although there is

indeed an agenda, there has been a lack of real political will to act on it, which

would imply, among other things, the establishment of a new institutionality

capable of providing effective instruments to make possible tangible results on

each issue mentioned. The establishment of a Mercosur Parliament could be an

See President’s Office, Mercosur’s Permanent Representatives Council. Desafios de la integración regional.

Iniciativas y Propuestas. Montevideo, July 13, 2006.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

140

auspicious beginning, provided it is not an isolated initiative neglectful of a

thorough, systematic institutional reform.

No item on this new agenda is exempt from problems and contradictions.

All items require much political negotiation and one cannot envisage a change

process devoid of conflict and bewilderment. Obstacles in this connection are

not negligible: the imperative of heightened demands by national societies deeply

hurt by the crisis; the ever-present temptation of bilateral agreements by a

member country, with circumstantial results, moving ahead at the usual slow

pace or impelled by the aggression of other members; the different marketing

standards among the national economies of the States Parties; the incipient

weakening of national governments; the meager results achieved in international

trade negotiations; the heterogeneity of economies and societies; the emergence

of bilateral conflicts of increasing severity and uncertain solution (the issue of

the pulp mills on the Uruguay River are a paradigmatic example), etc. Be as it

may, if voluntarism and naïve views are put aside, current circumstances seem

once again to offer an opportunity that should not be missed. If missed, much

more negative, serious consequences than in the past could be expected in

connection with the soundness of the strategic proposal for the bloc’s future.

What should be the direction to be taken, then? Which Mercosur are we

talking about? It is the Mercosur of productive complementation, of productive

complementation forums. It is a Mercosur that must, as of the moment it fully

assumes its condition as a political project, coordinate active sectoral policies,

as for instance energy, phytosanitary, agricultural and livestock policies, coordinate

infrastructure for common use, and adopt policies on border issues. It is a

Mercosur that earnestly debates the free movement of people while including

on the agenda the need to draft, publicize, and consolidate a major agreement

relative to the Social and Labor Charter it approved as a document that

recognizes rights but which currently finds no application or is of questionable

applicability. It is a Mercosur that for various reasons, like other blocs, must help

contest the unipolar globalization scheme consolidated after September 11, 2001;

that has to act as a bloc in international and multilateral contexts in the pursuit

For further information on this called-for Mercosur institutional reform, see Caetano, Gerardo: Los retos de

una nueva institucionalidad para el Mercosur. Fesur, Montevideo, 2005; Fesur: Desafios Insitucionales para el Mercosur.

Las relaciones entre Estados, Instituciones Comunes y Organizaciones de la Sociedad,” Preparatory Document, Fesur,

Montevideo, 2005.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

141

of effective access to foreign markets under favorable conditions, based on the

external recognition of its international identity as a bloc that can communicate

with other blocs. In the context of the unequal struggle between an imposed

unilateralism and the problematic possibilities of an alternative multilateralism,

the emergence of a new bloc – a bloc projecting itself on South America and

further on Latin America – develops a strong international projection. It must

participate in international negotiations as a unified bloc vis-à-vis third parties,

under somewhat different conditions that nevertheless do not hinder the

achievement of negotiated, common stances. It embodies the pursuit of markets,

evidencing an open regionalism, while discussing agendas, such as WTO’s

Singapore agenda, earnestly discussing issues that compromise our economies,

such as the new coordination of international organisms and their intervention

in national policies, exemplified by the issues of intellectual property, government

procurement, and services, and the repeated discussion of farm subsidies. It is a

Mercosur that is beginning to talk about common trade strategies, to seek a

dialogue with other blocs – not only the classic triangulation with the United

Sates and the European Union but also firmer negotiations with China, Japan,

South Africa, Russia, and the Arab countries. It is a Mercosur that is seeking

intrazone financing strategies, in terms of possible development and investment

banks and of a European-style Central Bank.

Even with a shorter, more viable agenda in the short run, encompassing

from more modest, incremental aims to the many emerging issues, there is a

widening conviction that deserves further reiteration: despite major changes and

recent additions, the current institutionality is not apt for attaining tangible

achievements in the various new areas of the more recent agenda. We are talking

about a Mercosur that is moving toward a new institutionality capable of

surmounting the shortcomings of the original 1991 Mercosur, of intensifying

progress and filling the gaps of the 1994 Ouro Preto Protocol and forging ahead

on the course begun, through ups and downs, with the latest institutional creations.

Under these circumstances, it is not by chance that the discussion begins to turn

around a new Mercosur that questions extreme interpresidentialism and introduces

the issue of evolution (not an hegemonic, imposed evolution but one attained

through intense negotiation) toward a better-balanced opposition between

intergovernmentalism and supranationalitiy, as feared as it is misunderstood in respect

of its scope and consequences. In point of fact, it is a Mercosur that ratifies and

intensifies its ineludible nature as a political project; a Mercosur that consolidates

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

142

the necessary transformation from a mere administrative secretariat into a

technical secretariat with political projection, a transformation that requires

effective technical and academic advisory inputs such as it is beginning to receive,

so as to become a think factory, a major regional think tank for fueling – without

suspicious subordination and lack of transparence – the operation of the other

Mercosur bodies. The Mercosur under consideration begins to discuss the

establishment of a Monetary Institute to make feasible an ever more indispensable

exchange convergence, the embryo of a regional Central Bank. There is a serious

need to discuss not only the establishment of a Mercosur Parliament – which has

already been done – but also its possible projection in the first transition stage,

when it must prove that it can become a political forum capable of effectively

advancing the Mercosur agenda.

It is also necessary to fully implement the provisions of the Olivos Protocol

and to move further toward the establishment of a Permanent Regional Court

of Justice. We are talking about a Mercosur that is beginning to reformulate

relations among its decision-making bodies and their institutional format, to

enable them to function less episodically and more systematically and to have a

more transparent, quotidian conduct; a Mercosur that is consolidating the foundation

already laid in the form of the Permanent Representatives Commission, with

ambassadors of the four full member countries, and with a President that can

act as the spokesman of a regional will; a Mercosur that is acquiring a new presence

and a new weight in the discussions at institutions such as the WTO; that negotiates,

in common and not exclusively, agreements with the United States and Europe,

based on other positions; that can handle with responsibility but without

submission its relations with international credit institutions.

From this perspective some might call utopian in view of the bloc’s current

difficulties, the new institutionality would also cancel the frequent “democratic

deficits” recorded along the process’s history. But this requires the avoidance of

mistakes and lazy, inconclusive temptations. Mercosur should not be seen in the

light of the circumstantial identity of governments more or less attuned to each

other ideologically. This would be a serious mistake. This is not the experience

of successful integration processes. Of course, ideologically kindred governments

may help certain types of agreements. While the purpose is to advance in further

depth, the accumulation of institutional experience is the best safeguard of and

the best instrument for achieving the economic results our peoples demand with

increasing urgency. Obviously, there is no neutral institutional model that could

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

143

be advanced by ideological affinity among governments. To take maximum

advantage of these opportunities, though, institutional rather than ideological

considerations should prevail, based on the premise that institutions should be

created to consolidate difficult-to-revert progress in political negotiations. Let

us learn (but not copy) from the success of others: the European Union was not

formed for social-democratic, Christian democratic or liberal governments. No

integration process of democratic governments whose natural life is rotation in

power and uncertainty of elections results is possible, if it is rigidly tied to a

bloc’s strict ideological stance.

If we want to take advantage of the current opportunity, created by the

earnest demand of our countries, which cannot find any solution by themselves

(such as Uruguay, although I do not believe Brazil or Argentina can do it either;

our countries cannot save themselves alone; they must strive for a place in the

world as a bloc), we must affirm a new institutionality capable of filling the

process’s “democratic deficit,” overcoming the intepresidentialism that has generated

a thoroughly “nonxecutive” “superexecutivism,” and endowing Mercosur with

legitimacy in our societies and enabling it at the same time to implement the

other agenda, which fits better the new circumstances that require from us other

ways of thinking, not only in national but also in international terms.

2. Stages of Mercosur’s institutional development

The frequent claim for Mercosur’s institutional strengthening has been

evident, as we have seen for many years, in the agenda as well as in the different

resolutions of the various integrationist bodies, both in their routine activities

and in Mercosur Summits. Dozens of resolutions, recommendations, and

statements clearly show this,

incidentally mentioning the need to update and

expand the organizational chart established by the Ouro Preto Protocol.

See, for example, particularly the CPC statements: Mercosul: Legislação e Textos Básicos (3

edition). Comissão

Parlamentar Conjunta do Mercosul – Seção Brasileira, Ministério das Relçações Exteriores, Senado Federal.

Brasília, 2000, 545 pp.

See “Protocolo de Ouro Preto – Protocolo Adicional al Tratado de Asunción sobre la estructura institucional del Mercosur”,

signed in that city by the then Presidents and Foreign Ministers of the four member countries on December

17, in compliance with the provisions of Art. 18 of the Treaty of Asunción of March 26, 1991, which states

that: “Prior to the establishment of Mercosur on December 31, 1994, the States Parties shall convene a

special meeting to determine the definitive structure of the Common Market’s administrative bodies and the

specific functions of each, as well as its decision-making system.” On the same date, a protocol was signed,

titled Procedimiento General para Reclamaciones ante la Comisión de Comecio del Mercosur.”

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

144

However, other than the persistent declarations and some substantive, though

partial progress, the requisite consensus and the political will to squarely meet

such demand were lacking. In addition this demand has been much more insistent

on the part of the bodies (such as the Joint Parliamentary Commission and the

Economic and Social Consultative Forum)

created by the Ouro Preto Protocol

with specific or merely consultative functions.

To discuss the different forms of intitutionality is to discuss at the same

time the various models of regional integration, as Mercosur’s history clearly

shows. As a matter of fact, Mercosur’s history begins before the 1991 treaty that

established it, summed up in the 1995 Foz de Iguaçu Act, signed by Presidents

Sarney and Alfonsín, which was the corollary of a set of actions and negotiations

prefiguring a Mercosur quite different from the one finally established in 1991.

This “other” Mercosur, which did not materialize for various reasons, resembled

much more the one that seemed to emerge from the proposals for a thorough

transformation of the bloc, put forth between 2002 and 2003, which began to

wane as of 2004, at least in some substantive aspects and in respect of its wholesale

transformation. The Sarney-Alfonsín agreement pointed to a much more

thorough, deeper institutionality and integration agenda than the one established

in 1990 and 1991.

The change of course, as has been rightly pointed out more than once,

coincided with the government change in Argentina and in Brazil. In brief, the

gestation of the “Phoenician” Mercosur model, of an almost exclusively

commercial nature, with a markedly intergovernmentalist, low-intensity structure,

clearly began in July 1990, in the Buenos Aires Act signed by Collor de Mello

and Menem. This Brazilian initiative consummated in Argentina, promptly

received the adhesion of Uruguay, which, as of the new government headed by

President Lacalle, keenly realized the serious negative consequences of a Brazil-

Argentina agreement that would cut off Uruguay and the other countries of the

region. As it joined the pact, Uruguay called on Paraguay and Chile to do the

same, to ensure a better balance of the asymmetries of the aborning bloc.

However, as could be expected, Chile’s adhesion under the envisaged tariff

conditions was absolutely impossible, given the great difference in the degree of

Uruguay’s current Vice-President and former Pro-Tempore CPC President, Luis Antonio Hierro López,

pointed out in December 1997, that he saw “the relation between the Fces and the CPC as that of first-degree

cousins.” See Voces, Parlamentos, Mercosur in Cuadernos del Claeh No. 81-82, 1998, p. 136.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

145

trade opening it had already achieved. Paraguay did join, and on March 26, 1991

the Treaty of Asunción was at last solemnly signed.

Similarly to other students of this subject, Bouza and Soltz, in their work

titled Instituciones y mecanismos en procesos de integración asimétricos: el caso Mercosur

[Institutions and mechanisms in asymmetrical integration processes: the Mercosur

case], show that the Treaty of Asunción originally had some defining features.

First, it pointed to a clearly intergovernmentalist institutionality and to an exclusively

trade integration profile, features that were fully integrated into the basically

liberal orientation of the governments and Presidents that signed the agreement.

Envisaged was an institutionality model pervaded by extreme intergovernmentalism,

which some authors have not hesitated in qualifying as interpresidentialism. This

basic orientation was very strong and evident and equally suspicious of precise

rules and procedures, similarly to Nafta’s institutionality features, for instance,

but quite opposite to any hint of supranational development after the European

Union fashion. This low-intensity institutionality directed on a priority basis at

trade fully matched an integration project oriented primarily toward trade

economics, had excluding primary projection topics, such as progressive tariff

elimination, the definition of a general origin rules regime, safeguards against

unfair intrazone trade practices, and deadlines for the implementation of a dispute

settling mechanism.

Bouza and Soltz, among others, have pointed out that the institutional

format envisaged by the Treaty of Asunción encompassed features that defined

the aspirations and will of the States Parties: i) the clearly intergovernmental

trait of the bloc’s decision-making bodies (this orientation is almost anecdotally

shown in the Treaty’s last article, Art. 24, providing, after naming the bloc and as

an unequivocal attempt to redress the failure to set up a mechanism to represent

the Parliaments of the three member countries); ii) the tacit assumption that the

integration agreements would have the nature of “incomplete legal acts” without

the establishment of a Mercosur normative framework that would be close to a

Community Law (with the consequent juridical insecurity aggravated by the

member countries’ constitutional and jurisdictional asymmetries, and the often

incurred temptation of noncompliance with what had been agreed – an effective

recourse for the bloc’s powerful countries – and the anticipation of a more than

problematic internalization of integration rules by means of national legislation);

iii) “the absence of an autonomous jurisdictional body proper to the bloc,”

which would translate into the establishment of extremely flexible, slow dispute

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

146

settlement mechanisms oriented toward the gradual, often nearly interminable

negotiation by governments (which not only would combine with other features

into a clear democratic deficit in the bloc’s institutionality and quotidian operation,

but would also sooner or later lead to a crisis in the agreements’ socioeconomic

effectiveness, particularly if the international context should turn unfavorable and

the disputes and controversies among bloc members should naturally multiply).

Table 1

The Brasilia Protocol of December 1991, centered on the definition of a

transitional dispute settlement regime, opted for the establishment of ad hoc

arbitration tribunals with binding jurisdiction and little effectiveness in practice.

In December 1994, the Ouro Preto Protocol was signed, establishing, at least as

the agreed text reads, “a definitive regime until the full convergence of the common external

tariff.” With its 53 articles and annex, this Protocol introduced undeniable

institutional advances but did not substantially differ from the original

intergovernmentalist orientation. Be as it may, as Table 2 succinctly shows, this Protocol

Bouzas, Roberto and Soltz, Hermán: Instituciones y mecanismos en procesos de integración: el caso Mercosur. Institut

für Iberoamerika-Kunde, Hamburg, August 2002.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

147

included some institutional innovations of limited but equally relevant scope: the

establishment of the Mercosur Trade Commission (CCM), a new decision-making

body, and of the CPC and the Fces, consultative bodies with restricted functions,

under the executive instances; the enhancement of the bloc’s international legal

status; the regulation of the internalization mechanism, and the entry into force of

Mercosur’s normative framework; the setting-up of supporting bodies under the

CMC, including the Working Subgroups (SGT), the Technical Committees, and

the ministerial meetings. In addition, the dispute settlement mechanisms were

somewhat improved and other minor innovations were added.

Table 2

After the Ouro Preto Protocol II, particularly and not by chance as of

2002, the bloc’s economic crisis seemed to be the major factor requiring a new

institutional engineering to provide instruments for the implementation of

other kinds of initiatives, different innovations were introduced, which were

See Opertti, Didier et al. El Mercosur después de Ouro Preto, Universidad Católica del Uruguay, Montevideo,

1996, Serie Congresos y Conferencias No. 11.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

148

not only relevant but also endowed in general with a more integral profile,

with less executive emphasis and more open to an authentically regional focus.

Table 3 indicates in chronological order these institutional innovations and

the pertinent decisions. The new organisms were as follows: a Political

Consultation and Coordination Forum; a Technical Secretariat, including a

Mercosur Technical Advisory Office; a Permanent Review Tribunal; a Mercosur

Permanent Representatives Commission; a Mercosur Municipalities, States,

Provinces, and Departments Consultative Forum; and the Mercosur Parliament,

which, in more than one sense, is the culmination of this phase of gradual,

varied innovations, but not of the process aimed at reforming Mercosur’s

institutionality as a whole.

Table 3

See Caetano, G.: “Los retos de una nueva institucionalidad para el Mercosur… Op. cit. In this work I maintain the

idea, shared by other experts, that the process of institutional reform of Mercosur must aim at integrality and

this can only be consistently achieved through what –amidst the 2004 expectations (exaggerated, as we will

see) was informally referred to as the Ouro Preto Protocol II.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

149

3. From the crisis to the 2003 promising programs

In large measure, these institutional innovations found their main support

and promotion basis on a truly “institutionalist” will on the part of the Economic

and Social Consultative Forum, particularly of some of its members, such as the

Southern Cone Labor Union Centrals Coordinating Office. One of the many

statements of similar tenor was issued by the 12

Fces Plenary Meeting held in

Montevideo on October 7, 1999, which called for the strengthening of

“Mercosur’s institutional structure, as the current crisis has shown the inadequacy

of the integration process’s current instruments...”

The Fces members not only demanded greater participation by civil society

players but also emphasized the need to consolidate the role of the Parliaments

as key arenas of the integration process. In this regard, the Southern Cone Labor

Centrals Coordinating Office, in a statement issued in Asuncion on October 9,

1994, said that “The region’s labor centrals also share the concern for the process’s

democratic content. There should be greater and better participation by social

representations and the Parliaments. This latter issue becomes quite clear if we

start from the fact that to have validity in each State, Mercosur decisions often

need parliamentarian ratification.”

For many reasons, after Argentina’s political and financial collapse in 2001

and 2003, which had a strong impact on the entire region, this institutionalist will

not only became firmer but also began to produce significant impact and results.

On February 18, 2001, the Presidents and Foreign Ministers of the four Mercosur

countries, gathered at the Presidential Quinta Olivos, hosted by Argentina’s new

President Eduardo Duhalde, signed the long waited-for “Protocol on Dispute

Settlement in Mercosur.”

This fundamental step toward the bloc’s institutional

consolidation, a demand that had been postponed for a long time owing

particularly to Brazil’s fears and vetoes, certainly meant substantial progress and

See “Mercosur/fces/Recomendación No. 3/99.

See “Propuesta de las centrales sindicales del Cono Sur a la estructura institucional del Mercosur.” Asunción, October 9, 1994.

See “Protocolo de Olivos para la Solución de Controversias en el Mercosur.” Olivos, Provincia de Buenos Aires, 18

de febrero de 2002. This Protocol had 56 articles distributed into 14 chapters, which precisely defined the

form, scope, and procedures of the dispute settlement system, encompassing aspects such as direct negotiation

among the parties, the possibility of intervention by the Common Market Group, ad hoc arbitration, review

procedures, the scope of arbitration decisions, etc. As a matter of fact, the Protocol had already been agreed

and was ready for signature in December 2001, but the fall of Argentine President Fernando De la Rúa at the

time of the Montevideo Summit caused the postponement of its signing.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

150

suggested that perhaps the region’s critical economic and social difficulties might

provide a propitious environment for stepping up the pace of the integration

process.

What took place at the Mercosur Summit held in Buenos Aries in July

2002 confirmed certain assumptions and perceptions: the economic and financial

crisis and its many consequences (market instability, serious social deterioration,

the governments’ alarming weakness, increasingly difficult relations with

international financial institutions, etc.) contributed to the fact that most countries

of the region saw in Mercosur the right alternative in a critical situation. This

meant endowing the integration process with more political consistency.

Everything seemed to lead to the conclusion that the leadership of this new

phase should fall on Brazil, not only owing to its status as the largest power in

the region but also because in the past, as we have pointed out, it had been the

member least willing to commit itself to bloc institutions that might restrict its

possibilities of acting autonomously. By the middle of the “ominous” year of

2002, the situation had become quite different and this was clearly reflected in

the Summit’s agenda. As part of a more comprehensive decision, it was agreed

to start the “necessary process for transforming Mercosur’s Administrative Secretariat into a

Technical Secretariat,”

which also implied the confirmation of a will different

from the one that in past years had hindered the reiterated project for “re-launching

Mercosur.” The Buenos Aires Summit made progress on other issues related to

the bloc’s institutionality: the establishment and consolidation of Sectoral

Competitiveness Forums, in charge of coordinating complementation matters

in the productive area; the formulation of specific strategies to undertake

common trade missions under the Mercosur logo; the broaching of the idea to

establish a Mercosur Development Bank as a prime macroeconomic convergence

instrument, among other important provisions.

July saw the beginning of Brazil’s Pro-Tem Presidency, the last to be held

by Brazilian President Fernando Henrique Cardoso. Itamaraty had already

emitted strong signals of a strategic turn toward Mercosur, a foreign policy

option that would become visible in the second half of the year: national elections

would be held in October and the Mercosur issue, as we will see, was one that at

See Mercosur/CMC/Dec. No. 16/02, of July 5, 2002, issued in Buenos Aires.

The Buenos Aires Summit, held under circumstances of acute financial instability in the region, was attended

by Mexican President Vicente Fox, as a sign of support for the region and for Argentina in particular.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

151

the time made a distinction between Lula and Serra, the candidates with greater

chance of winning; starting in November, Brazil would share with the United

States the Pro-Tem Presidency of Ftaa, precisely at the conclusion of the scheduled

negotiation. In the rather unstable context of the negotiations and of the

alignments at the international level in general and with the United States in

particular, coupled with the frailty of the governments of the other member

countries, the assumption of Mercosur’s effective leadership – without hegemonic

attitudes and with innovative proposals, and in full awareness that it entailed

both benefits and costs – seemed increasingly more attractive and necessary to

Brazil. Then President Cardoso (with the decisive backing of Celso Lafer, his

Foreign Minister) made a special point of giving these signals during the last

semester of his eight years in office. His speeches as he visited the countries of

the region in those months,

and the unprecedented fact that a group of advisors

to the Pro-Tem Presidency had been set up, consisting of experts and qualified

representatives of the four countries, were significant signals in this direction.

The general tonic of a Brazil more favorable to Mercosur than usual

became consolidated and more deeply ingrained during the 2002 elections

campaign that ended with the election of Luiz Inácio da Silva, the Labor Party

candidate. The latter distinguished himself from his opponents by a decidedly

pro-Mercosur discourse, a programmatic stance on which he confronted, in the

runoff, the “official” candidate José Serra, much more skeptical than his mentor

President Cardoso about promoting Mercosur as the kernel of a new proposal

of government for Brazil. Both before and after his election, Lula insisted on the

imperative need of consolidating Mercosur as a “political project,” as an irreplaceable

instrument not only for coordinating the economies of the countries of the

region but also for endowing the bloc with a true identity for stepping onto and

negotiating on the conflictive, current international stage.

In this context, significant progress was made again in the last months of

2002 toward consolidating and deepening Mercosur’s institutionality. Some of

the achievements even had a voluntarist tinge, such as the migration agreement

signed in the city of Salvador, Bahia, on November 8, by the Ministers of Justice

of the bloc countries and of Bolivia and Chile, under which the citizens of these

six countries are now permitted to live and work in any of them, provided they

Notably, for example, on his visit to Uruguay, August 20-21, 2002.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

152

meet some documentat requirements set forth in the agreement.

This agreement,

which might be considered foundational for future Mercosur citizenship, was

reconfirmed at the Mercosur Summit held in Brasilia in December 2002. At that

meeting, the agenda on a more thorough institutionalization of Mercosur

remained at the center of debates, particularly in respect of a speedier, more

complete internalization of the normative framework emerging from regional

agreements and the strengthening of the parliamentarian role in the process.

Once again, it was not only Mercosur’s official bodies that echoed these

institutionalist demands but also new, regionally outstanding social players. An

official declaration by the Southern Cone Labor Centrals Coordinating Office,

issued as the main statement of the Trade Union Summit held in Brasilia about

the same time, stated that “the option for a common market would entail the

loss of national sovereignty and lessen social control of State decisions, but this

loss could be offset by the establishment of community organisms based on

political and social representation to guarantee a more democratic process subject

to social control. (…) Over and above the Technical Secretariat’s instrumentation

and the implementation of the Olivos Protocol, it is essential that Mercosur

deepen its institutional structure at the same time it restructures, on a priority

basis, its different organisms and negotiation areas, through the nationalization

and coordination of their agendas.”

This obvious turn in favor of a more consistent, renewed institutionalization

of Mercosur, quite evident in the 2002 agenda we have briefly looked at,

established another historic landmark on the occasion of the meeting of

Argentina’s President Eduardo Duhalde and Brazilian President Luiz Inácio da

Silva in Brasilia, on January 14, 2003. In a joint communiqué, the two Presidents

expressly stated that they agreed that “Mercosur is also a political project that

should have the fullest participation of all society segments in the States Parties,

represented today in the Consultative Economic and Social Forum.” They agreed

on the “importance of strengthening the Joint Parliamentarian Commission so

The agreement, which confirmed as never before the oft-announced policy on the free movement of people

among the bloc’s countries and associates, had a truly historical meaning, in spite of the undeniable difficulties

of implementation in the short run, in view of societies severely penalized by unemployment and impoverishment.

As Uruguay does not have a Ministry of Justice in the form of a government institution, the agreement was

signed by the Uruguayan Minister of Interior. See Libertad de residencia y trabajo en el Mercosur, in El Obsevador,

Montevideo, November 9, 2002, pp 1 and 14; Acuerdo histórico en Brasil. Ventajas para los inmigrantes entre los países

del Mercosur, in Clarín, Buenos Aires, November 10, 2002 (by Eleonora Gosman, correspondent in São Paulo).

Cumbre Sindical 2002. Por otro Mercosur completo para todos. Brasilia, December 5-6, 2002.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

153

as to move further, in consultation with the other participants, toward a Mercosur

Parliament, and in looking at the possible representation systems and forms of

election.”

As if the joint communiqué were not sufficiently clear, President Lula was

even more categorical: “We shall build institutions to guarantee the continuity

of what we have achieved and to help us overcome the challenges we must face.

It is essential to guarantee the fullest participation of our societies in this process,

through the revitalization of the Consultative Economic and Social Forum and

the Joint Parliamentarian Commission, as well as the establishment of the

Mercosur Parliament in a relatively short time.

”19

Although the proposal had figured on the agenda of the meetings of the

Joint Parliamentarian Commission in recent years, it had particular impact when

embodied in an agreement between the Presidents of the bloc’s two largest

countries, attesting once again the reiterated commitment to Mercosur on the

part of the brilliant President Lula. The initiative had strong impact on the region,

such as the prompt manifestation of opposition on the part of Uruguayan

authorities. Luis Herrero, then Vice-President of Uruguay, said: “I believe that

the proposal to establish a Mercosur Parliament is premature; instead of this the

Joint Parliamentarian Commission’s work should be reinforced as should the

national parliaments’ legislative task of internalizing Mercosur’s legislation in

each country… A common currency and a common Parliament are both for

later stages… It is necessary to strengthen an imperfect customs union, Mercosur’s

technical secretariat, and the common juridical body… After strengthening these

instruments, attention should be given to macroeconomic coordination and only

then there could be thought of such an institution as a Mercosur Parliament…”

Irrespective of differences and nuances, the 2003 signals, including the

disagreement of the Uruguayan government, headed at the time by Dr. Jorge

See Comunicado Conjunto de Imprensa dos Presidentes da República Federativa do Brasil, Luiz Inácio da Silva, e da

República Argentina, Eduardo Duhalde (Brasília, 14 de janeiro de 2003). In that communiqué, the two Presidents

also agreed on the need to promote Mercosur’s macroeconomic coordination through a Macroeconomic Monitoring

Group and to intensify the integration of productive chains. They also reiterated the importance of moving

further toward fuller Mercosur institutionalization, through the strengthening of the Technical Secretariat,

the prompt entry into force of the Olivos Protocol, and the improvement of procedures for the effective

internalization and application of Mercosur norms.

Discurso do Presidente Luiz Inácio da Silva na ocasião da visita do Presidente da Argentina, Eduardo Duhalde. Brasília,

January 14, 2002.

Gobierno uruguayo se opone a la idea de Lula de crear Parlamento y moneda únicos en el Mercosur, in Búsqueda.

Montevideo, January 16-22, 2003, p. 1.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

154

Battle, unsympathetic to a strategic role for Mercosur and much more inclined

to advance the Ftaa project, still under consideration then, seemed to elicit the

manifestation of opinions favorable to intensifying one way or another Mercosur’s

political and institutional aspects. Not that those opposed to the idea had

vanished; but most voices, led by Brazil and its government, seemed strongly

inclined in the former direction. As we have pointed out, thinking of different

institutional formats for Mercosur implies confronting different integration

concepts and models. This became particularly evident at the Mercosur Summit

held in Asuncion, June 17-18. After the direct precedent of the meeting of

Presidents Lula and Kirchner in Brasilia on June 11,

the delegations from Brazil

and Argentina at the Summit displayed a strategic alliance clearly associated with

the reinforcement of the political aspect of the integration process.

In this context, Brazil submitted to the Summit a Program for the consolidation

of the Customs Union and the launching of the Common Market, under the title of 2006

Objective.

This document, released shortly before the Summit, did not show

major content innovations but placed a possibly unprecedented emphasis on

the expression of a political will to advance at a quicker pace toward political

integration. It set forth, for instance, the objective of advancing toward the

establishment of “a Mercosur Parliament elected by direct vote” to be installed before

end-2006; of setting up “a Social Institute” to lead a common reflection on common

social issues; of giving continuity to and expanding the agreements on migration,

legal procedures, and judicial cooperation; of strengthening institutionality for

the purpose of “achieving before 2006 a new series of institutional improvements to prepare

the bloc for the operation of a full Customs Union,” among other proposals.

The Argentine delegation submitted to the Summit a “Proposal for the

establishment of Mercosur’s Monetary Cooperation Institute,”

which included a plan

for beginning “to implement supranational monetary cooperation mechanisms,” gradually

but firmly. The purpose was the same as the creation of “a Mercosur Monetary

Institute” as an essential step toward the formulation of gradually converging

See the joint communiqué issued by the two Presidents at the time. It emphasized several issues of a clearly

institutional nature, such as “the need to make progress toward the establishment of Mercosur’s Parliament,”

the imperative need “of the prompt entry into force of the Olivos Dispute Settlement Protocol,” “the

importance of adapting the institutional structure to the current integration phase,” “the commitment to

establish a Monetary institute to intensify the macroeconomic coordination task,” among other resolutions.

See Mercosur/XXIV CMC/DT Nº 3/03.

Ibidem.

See Mercosur/XXIV CMCDT Nº 02/03.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

155

and even common monetary policies, as suggested, for instance, by the mention

of the “preparation and administration of a first issue of a common currency.”

Paraguay also submitted a proposal on another of the bloc’s key problems:

“the treatment of asymmetries.” This document, based on a critical analysis of the

failure to consider the economic and social asymmetries of small countries and

the negative impact of the “Free Trade Zone” on their economies, put forth

offsetting proposals on various items, such as tariffs, development of border

areas, external negotiations, infrastructure, labor training, etc. The only delegation

that did not submit a proposal was the delegation of Uruguay, precisely the

country that was then assuming Mercosur’s Pro-Tem Presidency.

This undeniable political offensive, carried out mainly by Brazil and

Argentina, could not figure in the Presidents’ final declaration owing basically to

Uruguay’s stance. Thus, it was not by chance that in the weeks after the Asuncion

Summit Uruguay’s leading political figures and parties issued firm, consistent

statements about Mercosur, which took the center of political debate, something

that had not happened in a long time. In different Uruguayan government,

political, and academic circles, efforts were made to establish a minimum

agreement basis for the general lineaments of Uruguay’s action during that crucial

semester. Other than meetings and declarations, results were scarce, and under

such circumstances Uruguay’s Pro-Tem Presidency slipped by uneventfully.

4. The “frustration” over the Ouro Preto Protocol II’s

failure to take hold

Félix Peña, the renowned Argentine expert on integration, has thus summed

up his view on what happened at the Ouro Preto Summit held ten years after the

first Ouro Preto Summit: “After Ouro Preto, Mercosur still stands. Its main

problems also remain. The expected festivities did not happen. Neither did the

announced death.”

Félix Peña’s summary is a fair account of the outcome of

that Summit from which so much was expected and which produced so little.

Nor did it toll the death or signal the dwindling of Mercosur (as those that were

against Mercosur had hoped and worked for). It is important to draw an accurate

picture of how Ouro Preto happened, of the main circumstances under which

Ibidem.

Félix Pena. “Hay vida después de la Cumbre del Mercosur in Ouro Preto.” In La Nación, September 21, 2004, p. 4.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

156

that symbolic Mercosur Summit took place, and of what could or could not

have been expected from its final decisions. The latter must be reiterated because

at that time the regional press and the statements of prominent government

leaders of the four member countries proffered a great many superficial versions

or rash judgments about the event. But without an accurate picture, a consistent

interpretation can hardly hold.

The first thing to note about the Summit’s antecedents is that in many

circles interested in the region’s integration, particularly those more favorable to

Mercosur’s further institutional and economic advance, Ouro Preto was perceived

as the opportunity for significant progress. Expectations were well-founded. Ten

years had elapsed since a major step had been taken toward the bloc’s institutional

construction. Since 2002, first at Itamaraty’s urging and then spurred by a

programmatic approximation between Argentina and Brazil (which the Lula

and Kirchner Administrations had not started but had radicalized and strategically

projected through statements such as the “Buenos Aires Consensus” or the

“Copacabana Act”), there was a political return of the integrationist proposal

favored by most countries of the region. To this was added the growing interest

of the Andean Community of Nations-CAN and even Mexico in establishing

different types of association with the bloc or in subscribing to even more

ambitious (and perhaps hasty) integration proposals, such as the so-called “South

American Community of Nations” established in Cuzco on December 8, 2004. In

addition, Mercosur continued to draw increasing attention from other

international blocs or powerful countries interested in trade agreements of

different kinds.

All this encouraged enthusiasm, and what was happening inside Mercosur

did the same. One example should suffice: the aforementioned programmatic

proposals issued at the Asuncion Summit in June 2003 instilled new dynamics

into the operation of various Mercosur bodies. The work after that Summit

accelerated the different initiatives involving different bloc organisms, leading in

some cases to auspicious improvements and accomplishments. The consolidation

of a common left or center-left orientation on the part of the governments of

the countries of the region also fueled heightened expectations – undeniably

with a strong dose of voluntarism and ingenuity. Never was Mercosur such a

strong item on the member countries’ national elections agenda as in the period

2002-2004, while the victory of the candidates more favorable to Mercosur

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

157

coincided with new ideological identities and integration models that were

certainly different from those advocated by the Presidents that had signed the

Asuncion Treaty of March 1991.

However, already through most of 2004, particularly in the second half

of the year, as the culmination of negotiations and particularly of decisions

approached, contradictory and even adverse signals began to emerge. What was

most worrisome was the resurgence of the anti-Mercosur lobbies, with the

aggravating addition of new participants, apparently recently raised from the

ranks, who had not yet had to counter the categorical replies of the groups more

inclined toward the consolidation and furthering of Mercosur. The failure of the

agreement with the European Union began to be exposed, with manifest error

and intention, as the confirmation that negotiations with third parties by the

bloc as a whole were slow and cumbersome and did not yield favorable results.

Obviously, the next step by the proponents of this view was the fierce defense

of bilateral agreements, in the preferred model of the FTTs signed by the United

States with various hemispheric countries (all of Central America, the Dominican

Republic, Chile, Colombia, and Peru).

Open discussion of institutional issues with a view to the negotiation of a

new Ouro Preto Protocol II of a reformist nature began to be caricaturized as

“institutional inflation”. This opacity and arrant misinformation began to infiltrate

negotiations, which changed scope and interlocutors many times in a short time,

precisely at the time when definitions had arrived at an extensive (perhaps too

extensive) agenda of initiatives and proposals. What was possibly the most

disturbing was the fact that blockages began to be raised and hesitation began to

be shown by Brazilian negotiators, those that so far had pushed the most for

reform, and this elicited both misgivings and skepticism about the extent to

which Brazil was willing to go. In this climate, different degrees of enthusiasm

about integration began to be sensed between one sector of Itamaraty (perhaps

the most resistant to radical commitments to the region) and the main spokesmen

of the Workers’ Party. A quite emblematic case was that of Marco Aurelio Garcia,

a respected figure in the region, who was then Lula’s main advisor on foreign

policy, who repeated on more than one occasion that all in the region “had to go

further and move more quickly.”

Neither Marco Aurelio nor any of those who were pushing for institutional

reforms and the establishment of fundamental agreements on economic matters

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

158

advocated changes of a radical or re-foundational nature. With respect to change,

there was consensus on certain issues. There was a general conviction that change

should be incremental and negotiated, not imposed; that it should also be integral

– since what was being proposed was the modification of an institutional

Protocol, the objective was to create appropriate instruments to meet the

demands of a new agenda, for which the maintenance of the status quo with only

cosmetic alterations was not sufficient; that one should proceed with both serenity

and audacity with the discussion of issues markedly dependent on free trade

agreements, and make decisive progress in perfecting a true Customs Union,

instead of just postulating it.

Also, the first conviction seemed to indicate that

the time of diagnostics and proposals (and particularly of speeches and

pronouncements) was past and that the time had come for decisions and strict

compliance with them. At that time also the idea emerged of a pompous

expansion of the bloc, not necessarily conducive to Mercosur’s actual deepening.

This preoccupation about how to make the institutional changes in such a

complex integration process as Mercosur’s was accompanied by the perception

of a gradual weakening of the entente between Argentina and Brazil, continually

tested by complaints (particularly from Argentina) about trade imbalance,

especially in respect of manufactured goods and the individual negotiation of

strong investment packets with powerful third parties (such as occurred during

the visit paid to the region by Chinese President Hu Jintao weeks before). It

became also clear that the demands of persistent social emergency situations in

the countries of the region required priority attention to the domestic front

(particularly from sensitive, progressive governments) and that it was not so

simple to balance these urgent demands and the indispensable compromises

under any international or regional negotiation.

In sum, there were many reasons why the exaggerated expectations about

the Ouro Preto Summit quickly waned in the months before the December

meeting. Despite the persistence of some militant voices, skepticism – equally

exaggerated? – began to win over the protagonists, who arrived at the Summit

An evidence of the problems in the functioning of Mercosur and of what we have called certain “resignation”

on the part of the Member States in respect of noncompliance with what has been agreed and decided as a

bloc, is the spreading of a mistaken notion of “imperfect customs union.” This should serve as a call for

effective compliance with the agreements and against the creation of “lazy shortcuts,” which often starts in

concepts and in discourse and quickly leads to accepted or tolerated practices that do nothing for the

deepening and consolidation of the integration process.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

159

with very low expectations and the firm intention of denouncing the loss of a

new opportunity. We must admit that there were differences before the event.

The Labor Union Centrals’ Coordinating Office rightly proclaimed its intention

of sounding a strong warning in its message to the governments because its

complaints and those of the Consultative Forum had been ignored. The Joint

Parliamentarian Commission, in turn, came with a fundamental agreement, not

very attractive but relevant as regards development potential it contained for

the establishment of a Mercosur Parliament.

And yet, despite much skepticism and somber prognostics, and

notwithstanding the militant activity those opposed to Mercosur’s consolidation

continued to carry out after the Ouro Preto Summit, the latter left several

important agreements and concepts, including the following:

i) Elimination of the double collection of the common external tariff,

for which the on-line interconnection of the Member Countries’

Customs would be established;

ii) Authorization by the Joint Parliamentarian Commission for all the

necessary measures to be taken for the Mercosur Parliament to begin

functioning by December 31, 2006.

iii) Authorization for the establishment of “Funds for Mercosur’s structural

convergence and for financing the integration process,” endowed initially with

100 million dollars, for reducing regional imbalances and improving,

in a balanced way, the competitiveness of all bloc members;

iv) Regulation of government procurement, harmonizing the various

kinds of requirements, and moving toward its liberalization within

the zone;

v) Establishment of a “Consultative Forum of Mercosur Municipalities,

Federated States, Provinces, and Departments,” which superseded the

Specialized Meeting of Municipalities and Intendancies (Remi), to spur the

coordination of integration policies at the local and the subregional

levels;

vi) Establishment of high-level groups to deal with issues such as human

rights, job creation, facilitation of entrepreneurial activities, and to

propose coordinated policies and initiatives on these subjects to the

governments of the Member Countries;

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

160

vii) Confirmation of the admission of Venezuela and Ecuador as

associate States and formalization of Colombia’s application to

membership;

viii) Signing of free trade agreements with member countries of the

Southern Africa Customs Union (South Africa, Namibia, Botswana,

Swaziland, and Lesotho); and

ix) Confirmation of the trade agreement with India.

Although another Summit result was the attenuation of the trade grudges

between Argentina and Brazil and the resumption of their privileged bilateralism

that would be consolidated in the following two years, the contrast between the

Kirchner and Lula discourses on the occasion could not have been more explicit.

While the Brazilian President complained about “the pessimist voices that magnify

difficulties” while Mercosur shows “a great power of attraction” (a reference to the

higher number of associate countries), which will enhance its negotiating power

in respect of the Ftaa or the European Union, the Argentine President, faithful

to his style, did not spare criticism: “Discourse remains far from action. (…)

Presidential decisions do not carry into subsequent negotiations, where local

circumstantial problems seem to prevail over regional interests.”

Beyond the gestures and sparks in the declarations and attitudes, what is

certain is that Ouro Preto’s results are very close to Félix Peña’s apt summary.

5. The 2004-2006 period and some of its major problems

In recent years, after this turn in expectations about Ouro Preto, Mercosur’s

global activity has not been auspicious nor does it invite optimism. Félix Peña’s

analysis of that December 2004 Summit might serve as a sensible criterion for a

more precise evaluation of what has happened in the last two years with the

regional integration process. Instead of self-complacency, what is needed is a

proper analysis to provide a basis for reforming and reactivating the integration

process. In this connection, it is difficult not to agree with the “Córdoba Declaration”

issued by the Southern Cone Labor Union Centrals’ Coordinating Office on July

See “Coordinadora de Centrales Sindicales del Cono Sur. Declaración de Córdoba.” Córdoba-Mercosur, July

21, 2006.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

161

21, 2006: “Mercosur’s functioning has alienated itself from the integration project

we want, as it does not take into account the requisite coordination of the different

policies that should guide our economies toward productive and social

development.”

The turns taken by Mercosur as an integration process cannot be seen

apart from recent political developments in the region or from the experience

of other integration projects in the hemisphere. The Member States’

governments’s sticking to “mirroring” and to “ideological affinity” as the engine of

Mercosur’s positive transformation seems to have been futile. To go deeper into

this, one would have to determine first if the governments of the region did

really took a “turn to the left” and then carefully assess the limitations and

achievements of this leftist content in respect of specific policies (distinguishing,

for instance, among the classical left, allegedly progressive currents, popular

national movements, etc.) It would also be necessary to determine the extent to

which these new governments promoted (directly or indirectly) or agreed to the

resurgence of sectoral, nationalist, and political interests, most of them with

little inclination for daring and even less for sacrifices in favor of integration.

What is little debatable is the confirmation that integration processes are not

consolidated on the basis of “ideological affinities” among governments but by

the solidity of institutional constructions among different parties.

Another ineludible observation about the regional political panorama has

to do with the persistence of political instability, the continuity of crises in the

parties and forms of representation (owing to a plethora of movements, personal

politics, the Parliaments’ loss of prestige, etc.), coupled with drastic changes in

the map of national and regional movements and social protagonists, and old

and new problems in “low-intensity democracies.” To this conflictive, shifting

political picture should be added the persistence of inadmissible social

inequalities on the most inequality-ridden continent, which nevertheless has

experienced strong growth in the last three years, owing to external conditions

favorable to commodity exports. In a context marked by internal insecurity

associated with different kinds of emerging conflicts, by countries spending

enormous amounts on armament, and a perhaps little visible but significant U.S.

military presence, Latin America, South America, and Mercosur itself see the

multiplication of signs of their relative marginal condition in the international

context (a look at indicators of market share, GDP, financial inflows, or other

indicators will make this situation very clear).

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

162

Against this regional political background, hemispheric integration

processes cause disenchantment or uncertainty. This is illustrated by the following:

after Venezuela’s noisy withdrawal, CAN seems to oscillate between slow agony

and self-projection, with Chile’s full reintegration, as the engine of a “Pacific

League” oriented preferentially toward Asia and the United States; other than

some punctual changes in forthcoming elections, Odeca and Caricom seem to

enter fully into the U.S. orbit, as did Mexico after its accident-ridden, polemical

elections; the speedy admission of Venezuela as full Mercosur member, which

meant Mercosur’s expansion unaccompanied by consistent deepening; the failure

of the Ftaa project owing to the stance adopted by the Mercosur countries and

Venezuela (as yet not a bloc’s full member) during the Mar del Plata Summit in

late 2005; the seeming consolidation of the U.S. presence in the region with the

multiplication of bilateral FTAs (which may reach Uruguay, at the heart of

Mercosur); the fact that the Community of South American nations does not

seem to take hold politically or economically; a silent dispute for leadership

positions and the coordination of “axes” (Brazil vs. Mexico, the Venezuela

“factor” and its Bolivarian project personified in Chávez; the Bolivia-Cuba-

Venezuela “axis”; the Brasilia-Buenos-Aires-Caracas “axis”; the contemplated,

uncertain “Pacific League” etc.); the fact that Latin America’s presence in the

G-20 Plus does not quite restore its contestation role (as in Cancún) in ensuring

positive agreements (can the Doha Round and the WTO be “resurrected?”)

In sum, disenchantment and uncertainty seem to be the most accurate balance,

other than the active proposals at stake.

Given this context, in what direction does Mercosur seem to be headed?

The developments of the last two years do not invite enthusiasm, even though

the careful weighing of these developments seem to be the most appropriate for

an analysis. In this connection, some major problems can be pointed out.

i) The crisis and the uselessness of holding to certain “integration

models” become increasingly clear, despite the ever-stronger evidence

that Mercosur is indispensable as a platform for the integration of all

Member States, both large and small, into the international scene. Not

the now exhausted “commercial Mercosur” of the 1990s (little

endowed with institutionality and restricted to a mere economic and

trade agenda); or the “two-speed Mercosur”; or the “Mercosur of

two big and two small countries;” or the Mercosur of “exclusive

bilateralism” between Argentina and Brazil, which does not pay due

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

163

attention to the question of “asymmetries and flexibility” justly raised

by Paraguay and Uruguay. Equally inappropriate seems to be the

solution of a Mercosur “escaping forward,” which chooses expansion

over depth. However, one should avoid misunderstanding: what is in

question is the specter of inconclusive “integration models,” not an

integration process that may display significant degrees of irreversibility

as a basis for further improvement of our societies.

ii) As was demanded after the 1999 and the 2001-2002 crises, politics

once again is the bloc’s guiding force (expressed in greater attention

from regional governments, parties, and social protagonists to the

integration agenda), although results have not been as expected (at

least so far). Denial of Mercosur’s indispensable political character is

found in fewer and fewer lonely sticklers to an anachronistic insistence

on sovereignty. But the welcome “return of politics” has not yielded

the expected harvest. The political will to further compliance with

commitments undertaken and with the bloc’s deepening has been

evidenced more in the rhetoric of Summit speeches than in the

governments’ daily performance regarding the functioning of the bloc.

Politicians have not ceased to privilege their “share in national

elections” or lost their inclination to jeopardize strategic regional

prospects. Bilateral conflicts of little credibility have emerged and

been radicalized between Member States (the conflict over the pulp

plants is emblematic) with governments unable to negotiate instead

of resorting to nationalism-driven confrontation (undeniably the worst

course) or to “external arbitration” in the context of a global Mercosur

that has proven inefficient even as mediator. There has been a lack of

strategic leadership, which has been so relevant in other international

integration processes (leadership based not on charismatic mechanisms

or on bombastic and individualistic “historic projects” but on

proactive will to arrive at genuine agreements among States).

iii) Given the exhaustion of the “national developmentist” projects and

of policies inspired on the Washington Consensus in its most dogmatic

and orthodox form (which has somehow survived in the region, owing

to the lack of courage and decisiveness in respect of serious, reliable

alternatives), bloc governments are not able to lay the foundations

for greater, effective complementariness of their economic policies,

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

164

let alone to establish the lineaments of a “region-centered neo-

developmentism.” There is no doubt that the content of policies and

the way the governments implement domestic agendas strongly affect

their willingness and capacity to push for proactive initiatives for the

region. As they concentrate on “internal” policies of a more or less

nationalist character, what is left for regionalism is residual and

subsidiary. True, the false dilemma between national and regional

interests should be avoided, but no choice is without cost nor is

integration progress possible without longer-term strategic

consideration of achievements and possibilities. Defense of the

insistently claimed “exclusive” nature of “national interests” also

demands – naïve as this may sound – generosity and more enduring

attention, particularly from powerful governments, as illustrated by

the European Union’s experience. It does not seem too inappropriate

to warn that this is what is happening in Mercosur.

iv) Despite the progress achieved, there are persistent signs of

“democratic deficit” in the bloc’s normal functioning, which negatively

affects not only the process’s legitimacy but also its effectiveness in

trade and economic matters and in policy coordination. This writer

has done work on this specific subject.

It is thus not worth doing an

exhaustive review of the functioning problems that lessen the

democratic character of the daily running of the bloc, from the opacity

of negotiations to the restrictions imposed by the resistant

“interpresidentialist” modus vivendi to the fear of more effective

participation by the Parliaments and civil society players. This question

could perhaps be summed up in the deficit pointed out by Grandi

and Bizzozero in the seven areas they identified in their works:

directionality, governability, manageability, institutionality and legality,

transparence, citizenship, and sensitization.

v) As we have seen, alleged or actual “ideological affinities” of the

Member States’ governments are not enough to guarantee an

See Caetano, Gerardo. “Los retos de una nueva institucionalidad para el Mercosur.” Montevideo, Fesur, 2004.

As suggested by Grandi and Bizzozero: “Hacia una sociedad civil del Mercosurs: viejos y nuevos actores en el tejido

subregional” in Alop-Cefir-Claeh: Seminario Participación de la sociedad civil en los procesos de integración.

Montevideo, 1998.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

165

inclination to deepen the integration process at its different levels.

Much has already been said about this so as to dispense further

comments. We will add just one more: the negative consequences for

the integration’s advancement, yielded by the automatic satisfaction

(sometimes with a “populist” or clientelist bias) of strongly sectorial

demands dispersed in the bosom of fragmented societies. This scenery,

which is so closely related to our countries’ current context, provides

a fertile soil for the emergence of the so called “intense groups”,

sometimes carrying out only one demand, and because of that tending

to misjudge their extremely particularist claims with their own identity.

As a result of the latter, these groups come to be completely ineffective

in any sort of negotiation process. And it is needless to recall that

every integration concerns nothing but negotiation, a great deal of

negotiation.

vi) A good and favored relationship between Brazil and Argentina has

returned, which implicates on an indispensable basis for the

enhancement of Mercosur. Obstacles are raised when the approach

between the two great States is converted into an “excludent

bilateralism”, which dodges the members’ advice when deciding over

paramount issues for the whole group, and constantly postpones the

solution of the already mentioned problems of asymmetry. We have

already had the opportunity to discuss these matters and hence it is of

no use to echo it. However, it would be worthy to restate a point,

based on the always pertinent comparative analysis of experience. It

has been rightly said that just as the European Union could not have

succeeded without the prosperity of Germany and France, neither

could Mercosur be consolidated if Argentina and Brazil do not fare

well. But it is also true that the European Union counted on Germany’s

and France’s grandeur and generosity in meeting the demand of the

weaker members of the Community with respect to the compatibility

and convergence of economies. The same thing could be said about

Paraguay’s and Uruguay’s fair demand in relation to Argentina’s and

Brazil’s attitude toward the situation of the bloc’s smaller, weaker

economies. It could be argued that Focem’s establishment was a step

in the right direction. But it can be equally argued that this approved

experiment by Mercosur is still far from what the social Cohesion

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

166

Funds meant in Europe. It is possible that compatibility between large

and small economies in Mercosur will come not from exponential

increases in Focem resources but from sound management of

flexibilities, provided these do not alter the agreed course for Mercosur

as a whole.

vii) In this review of recognizable problems of Mercosur’s trajectory in

the last two years it is important not to fail to do a thorough, bold

assessment of the problems stemming from a hasty, somewhat unclear

expansion of procedures and scope (such as the complex

incorporation of Venezuela into the bloc as a full member) before an

actual deepening of the bloc. As regards Venezuela’s admission into

Mercosur, the resulting picture is at least a dual one. It meant

incorporation into the bloc of South America’s third economy in terms

of GDP. Its energy resources, as Bolivia’s, are vital for any viable

integration scheme in the region. Its government has shown undeniable

integration will (albeit with the negative bias of excessive charismatic

personalization of this inclination) and a plausible generosity to assist

and help hemispheric nations that are facing problems. Its clearly

independent stance (albeit characterized by counterproductive

histrionics and strident confrontation) vis-à-vis the United States

provides a welcome geopolitical counterweight, particularly at a time

when the U.S. Government is bent on swaying unipolar hegemony

and waging “preemptive war,” with hints of a return to inadmissible

interventionism in a hemisphere it actually underestimates matter.

Nevertheless, these positive traits contrast with negative ones, as the

Chávez government is of an extremely personal, polarizing nature,

puts into practice a dangerously confrontational strategy both inwards

and outwards. Its foreign policy is quite aggressive and coincides little

with the stance of the Mercosur countries not only vis-à-vis the United

Mercosur experts and protagonists have often suggested that if the materialization of a real customs union

(not an “imperfect” one, with its consistently disregarded common external tariff ) is not possible, at least for

the time being, a “short agenda” should be attempted to ensure fully free trade within the zone, allowing the

Member States greater flexibility to negotiate treaties or agreements with third parties (whenever application

of the external strategy of the bloc as a whole is not possible, as long as such treaties and agreements do not

resemble the FTAs with the United States, which owing to their already classic content would detract from

any integration project suitable for Mercosur), and to place strong emphasis on productive complementation

projects and on the coordination of community policies on various subjects and sectors.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

167

States but also as regards its relations with other Latin American countries

(in whose electoral processes President Chávez has not hesitated to

intervene). Moreover, it gets involved in extremely hard, incompatible

positions in particularly danger-ridden zones (Israel, Iran, Iraq, Belarus,

etc.). Venezuelan society is politically fractured, with the anti-Chávez

opposition and important segments of Venezuela’s population fearful

of what they consider a “costly” foreign agenda, notwithstanding the

relevance of his economic and financial assistance to bloc countries,

including under genuinely regionalist initiatives. Chávez has proposed

other kinds of initiative (such as the establishment of Mercosur Armed

Forces), radically counter the orientation of the other bloc countries.

A Mercosur properly anchored on institutionality and on a new agenda

could incorporate Venezuela into the bloc by maximizing its

potentialities and positive features, while helping minimize and even

contain its negative aspects. But the opposite happens with an

incorporation of this king in to a Mercosur that does not finish solving

its problems because, among other reasons, there is no firm political

will to deepen the agreement’s contents in the directions mentioned.

viii) Lastly, the emergence of worrisome binational, unresolved conflicts

within Mercosur (as mentioned, the border controversy between

Argentina and Uruguay about the construction of pulp plants on the

Uruguay River is a paradigmatic example) severely affects the scene

of what we might call “the cultural battle for Mercosur (this

indispensable construction of an integration culture, of a “ñandé”

culture

that is the opposite of enslavement and assimilation), which

fuels the activity of the anti-Mercosur lobbies and “individual

salvation” projects. Suffice it to point out how negative was the

repercussion in Uruguay of the Argentine Government’s attitude in

the conflict over the pulp plants, the extremely negative effect on the

economy and on society of the blockage of the roads at the border,

authorized by the Galeguachú Assembly (a decision met with tolerance

and, after the Hague Court’s pronouncement, with the full support of

As the prominent Paraguayan intellectual Ticio Escobar has pointed out, the Guarani language has two

words to express how native speakers see others: “oré,” which denotes exclusion and would mean “we against

the others,” and “ñandé,” which denotes inclusion and would mean “ we and the others.” Agreeing with Ticio

Escobar, we aspire to a “Mercosur culture” that is an embodiment of “ñandé.”

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

168

the Kirchner Government. This support has recently weakened, owing

to the radicalization of the position of the backers of that Assembly’s

decision, who reinstated the blockages and promised a “hellish

summer” for the Uruguayans). Mention should also be made of the

disenchantment over Mercosur’s (and particularly Brazil’s) lack of

participation in the search for a way out of a controversy of dangerous

proportions. There is no doubt that this situation provided a fertile

soil for the launching of a political operation in Uruguay, aimed at

the signing of a FTA with the United States, an adventure cut short by

a sensible decision of President Vásquez’s. This is just an example of

the extent to which a binational conflict that does not find in the bloc

appropriate dispute settlement stimulus and institutions may exact a

high cost, by eroding or eliminating the mutual loyalty and trust that

are integration’s cultural foundation. Thus, winning the “cultural battle”

in Mercosur’s defense is fundamental. In this connection, let us recall

the wisdom or Jean Monnet, the European giant who was a builder of

integration among States: “If I had to start over, I would start with culture.”

It is thus not a question of problems that cannot be solved. There is an

array of complex circumstances whose satisfactory solution requires frankness,

political will, and much strategic sense. At Mercosur’s last Summit, held in

Córdoba last July, other than some matters that overshadowed what was really

important, progress was made on various initiatives related to the issues discussed

here. The Joint Communiqué of the Presidents of Mercosur’s States Parties cites

consistent achievements regarding more than one major issue: the successful

completion of the first phase in the elimination of double collection of the

common external tariff; progress in the implementation of the Mercosur

Structural Convergence Fund-Focem; adoption of the Public Contracting

Protocol; progress in the harmonization of rules for the liberalization of trade

in services; progress in initiatives aimed at the establishment of a South-South

Gas Pipelines Network/ progress in respect of the so-called “political Mercosur,”

particularly through the consolidation of the Mercosur Parliament Project; and

progress in the celebration of agreements on economic complementation and

on trade relations with third countries.

See “Comunicado Conjunto de los Presidentes de los Estados Partes del Mercosur. XXX Cumbre de Jefes de Estados del

Mercosur.” Córdoba, July 21, 2006.

Gerardo Caetano

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

169

It fell on the Southern Cone’s Labor Union Central’s Coordinating Office,

with its twenty years of work toward regional integration as one of the most

consistent advocates of a real deepening and renewal of the integration process,

to demand in its Córdoba Declaration the participation of citizens and social

players so as to put an end to rhetoric and start working. It says that “Mercosur

has made progress in the integration of productive chains or high-value chains

of large enterprises that operate in the region, particularly transnational

corporations, but has neglected the small productive chains consisting of small

and medium-size enterprises, which are the main job generators. (…) Mercosur

Governments must seek to achieve the political goals and objectives they have

set forth in their recent declarations and in the documents signed by the Presidents,

particularly as regards measures to promote the complementariness of the

economies of the member countries and to harmonize their agricultural and

industrial policies.”

8. Conclusion

All along this last period, we, the Uruguayans who are genuinely in favor

of Mercosur, have had to go through difficult circumstances. Buffeted by the

neighboring brethren’s aggressiveness or omission and the resurgence of the

anti-Mercosur lobbies inside the country, Uruguayan citizens have lacked no

reason to mistrust Mercosur as a strategic instrument and as a goal of historical

development. Cynics have tried to take advantage of the situation. It has not

been easy to resist their attacks.

Under these circumstances, again and again we have had to listen to the

old saw that “countries do not have permanent friends; they have permanent

interests.” This is indeed an old, worn out saying, whose authorship is claimed

by many and which, owing to its course realism, has become a kind of “common

sense” and “conventional wisdom,” curiously successful in the region’s diplomatic

scenario. If the Europeans had adhered to this philosophy, they would not have

built the citizens’ Europe we admire so much, even in its unfinished form. As to

myself, I prefer other maxims and criteria. I subscribe rather to the

recommendation from my twenty-year old son, Federico Caetano, a Law and

International Relations student at Montevideo’s University of the Republic, as

See “Coorinadora de Centrales Sindicales del Cono Sur. Declaración de Córdoba.” July 21, 2006.

Mercosur: quo vadis?

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

170

DEP

he listened to my arguments in favor of this “other” Mercosur on whose behalf

we fight so hard and which often seems so far away. Federico said: “Illusion is

the engine that drives our purposes.” According to the most recent Spanish

dictionary I have at home,

the word “illusion” has a degree of ambiguity that I

find quite suggestive and timely for referring metaphorically to the current

possibilities for Mercosur’s direction. “Illusion” refers to the “concept or image

formed in the mind, which does not correspond to reality.” But it may also mean

“an interest and enthusiasm fraught with hope.” Fully aware of the dilemma

suggested by the two definitions and the extent to which they apply to the current

debate about Mercosur’s likely future, we prefer – with wide-open eyes and

without being naïve – to hold to the second definition, the best form of

undertaking a responsible commitment to Mercosur.

Version: João Coelho.

Manuel Seco, Olimpia Andrés, Gabino Ramos. “Diccionario abreviado del español actual.” Madrid, Grupo

Santillan, 2000, p. 968.

Rafael Ramírez

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

171

s Venezuela is an oil-producing country and a developing nation,

it allows me to talk about our own experience given that petroleum is crucial

to our prospects for development.

This brief presentation will describe the path we have travelled in

Venezuela over the past few years to reassert full sovereignty in the management

of our petroleum resources. This has been an uphill struggle under the

leadership of President Hugo Chávez requiring us to mobilise the entire

population in defence of our prime resource. It has demanded a tough stance

toward transnational interests and their local political agents. We believe the

experience we have gained in the process can provide a modest contribution

to other oil-producing nations, and serve as a lesson.

Full Petroleum

Sovereignty

Rafael Ramírez

* Minister of Energy & Petroleum of the Bolivarian Republic of Venezuela and Chairman of PDVSA –

(Petróleos de Venezuela S.A)

[email protected]ob.ve

Role of energy in developing countries

Full Petroleum Sovereignty

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

172

Venezuela has been a laboratory, a playing field where a sophisticated

strategy devised by think-tanks in consumer countries has been played out.

The aim has been to wrest this vital resource from our sovereign control and

so undermine Opec. The so-called “deregulation” strategy is based on

globalisation of natural resources. It is embedded in a certain line of modern

thinking that paints the nation-State administering the pace of exploitation

and exercising full control over its natural resources as an outmoded concept

since it hampers unchecked access for financial capital to exploitation and

trading of petroleum.

In our country this antinational strategy relied on an unexpected ally –

our own national petroleum company, PDVSA. Acting as a veritable Trojan

Horse, the company progressively implemented the components of “petroleum

deregulation” and consistently set about dismantling Venezuela’s traditional

petroleum policy until it came to violent, open loggerheads with the State.

Until two years ago we were all still reeling from the effects this confrontation,

triggering the extraordinary events we are all familiar with, had had on our

mindset and on the market. In April 2002, the board of directors of PDVSA

sponsored a military coup d’état. Not content with that, between December

2002 and January 2003, the Board unleashed a second coup, economic rather

than military this time round, achieved by throttling oil exports. After causing

serious losses to our oil industry (of the order of US$ 14.7 billions), the Board

failed to achieve its ends on both counts and its members forfeited their positions.

As a result, in 2003 the Venezuelan State recovered control of PDVSA.

The fact is that the old PDVSA had fallen prey to agency capturing by

certain consumer nations and international oil companies. Instead of serving

the Nation’s interests as the guardian of its natural resource, it set about

introducing and implementing policies devised by these external players. In

the final analysis, PDVSA aimed to become a “global energy corporation” for

the sole benefit of consumers in developed countries, aligning itself

ideologically with their line of thinking and divesting itself of the inconveniences

and problems that typically beset dependent nations such as ours. In 2003, the

Venezuelan State recaptured its own agency. The new PDVSA is proud to

serve the Nation as a truly national oil company that not only generates the

revenue and royalties dear to all oil exporting countries but also implements

economic and social policies devised by the national government and designed

to distribute the revenue generated. This is sowing the seeds of petroleum.

Rafael Ramírez

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

173

Recapturing the company required more than just replacing one board of

directors by another and recuperating production. It was an opportunity to reaffirm

the ground rules of our sovereign petroleum policy, to enforce the Venezuelan

Constitution and legislation extant since 1999 and 2002, dismantling the scaffolding

of “petroleum deregulation” that sustained the edifice of the old PDVSA.

The first step was to restore the administration of Venezuela’s petroleum

policy to the State, transferring control to the Ministry of Energy and

Petroleum, strengthening Opec and subordinating the national oil company

to the decisions of the State. Strengthening the hand of the Ministry of Energy

and Petroleum, traditionally responsible for conducting the country’s oil policy,

and of other state control mechanisms has gradually enabled us to revert all

Pdvsa’s revenue to the Treasury. The company’s management has been made

more transparent and the mechanisms by which it is held accountable to the

Venezuelan State (its sole shareholder) have been improved. Investment and

expansion plans have been brought into line with government policy. This new

state of affairs has allowed us to launch a review of the legal framework

governing all business related to “petroleum deregulation” in which PDVSA

played a star role, serving as a “fiscal shield” for transnational corporations.

In this context, we refer specifically to Internationalisation, Operational Service

Agreements and Joint Ventures.

Internationalisation

The overseas investments made over a period of almost twenty years,

from 1983 to 2002, by the old PDVSA were guided by vertical integration

with refining, distribution and market activities in major consumer countries.

The aim was to make the company a “global energy corporation” investing

funds of the order of US$ 15 billions, mainly in the USA through the Citgo

circuit and in Germany through the ROG circuit, precisely at a time when the

Venezuelan State was struggling through one of its worst economic crises.

The country was suffering de-capitalisation and capital flight, and its national

oil company, PDVSA, was a key player in the process. Its board of directors

was busy implementing a strategy for extricating assets from state control,

raising a “corporate screen” between the State and the company’s new

acquisitions, placing them under foreign legislation and financial obligations

that ruled out control by the Venezuelan State.

Full Petroleum Sovereignty

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

174

For almost two decades, the hefty investments in overseas refineries

generated not a single dollar in dividends for Pdvsa’s ultimate stakeholder,

the Venezuelan State. All dividends were ploughed back into the corporate

structure and reinvested, spent or squandered overseas, amassing assets beyond

the State’s control. As from 2003, this state of affairs was brought to an end.

Since then, dividends have been channelled to their rightful destination: the

coffers of the Venezuelan State. Since 2004, dividends have amounted to about

three billion dollars and a thorough review has been made of overseas

investments, discarding unnecessary ones and reimbursing the State for part

of the investments and the losses sustained.

One feature of internationalisation that we are engaged in abolishing has

to do with the fact that all the supply agreements with subsidiaries and overseas

joint ventures granted substantial discounts on market prices, discounts of

2 to 4 dollars/barrel. In addition, the formulas employed allowed operating

costs to be deducted from the price, effectively transferring the costs to

Venezuela and thus fuelling tax evasion in our country where rates were higher

than in the United States.

Moreover, PDVSA resorted to funding mechanisms to obtain credit

abroad by which these supply agreements were given as collateral. Consequently,

in order to put an end to this perverse anti-national practice of granting

discounts, the debt incurred had to be restructured and reduced from 9 to 3

billion dollars. In other cases, private partners claimed acquired rights to

discounts written into contracts, making it complicated to cancel the joint

venture. Nonetheless, as the recent termination of the joint venture with

Lyondell demonstrates, we will not allow such practical obstacles to serve as a

pretext for not addressing failings in the recent past. Furthermore, we will

proceed with the review of each and every contract, taking the necessary action

to abolish for good the practice of granting discounts, establishing a public

system of price formation for our crude and by-products.

Operational Service Agreements

Let us now turn out attention to another component of the old Pdvsa’s

policy of devaluing our natural resource by means of “petroleum deregulation”:

operational service agreements. This brings us to the heart of the problem of

regulating access to natural resources, and raises the question of whom such

Rafael Ramírez

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

175

access should benefit. Since 1

January 1976, when the oil industry in Venezuela

was nationalised, petroleum prospecting and production have been the preserve

of the State. Since then, such activities could not be undertaken by private

enterprise save in the form of joint ventures with and under the control of the

state oil company. As from 1992, however, the old PDVSA – already captured

and acting as a Trojan horse – wielding its very considerable powers and

resorting to sophisticated, “creative” interpretations of the Law, conferred

on itself powers rightfully pertaining to the Ministry to draw up Operational

Service Agreements (OSA).

These wrongly dubbed Operational Agreements allowed private oil

companies to use loopholes in the Law effectively to become oil producers

through concessions granted by the national oil company, although this

fundamental feature was masked by legalistic sophisms hinging on the concept

of “services”: the contractors, as they were termed, did not formally explore

oil resources but merely rendered exploration services; neither did they formally

produce oil but rather rendered production services. Finally, the oil produced

supposedly did not belong to them; they merely supplied it to PDVSA, which

in turn supposedly did not purchase the oil but rather remunerated the

companies for the “services” rendered. The contractors were thus paid a variety

of fees (OpFee, CapFee, stipends and incentives), all of them indexed to

intricate formulas that – surprise, surprise – amounted to about 60% of market

production values. PDVSA and the Venezuelan Treasury were left to pick up

the remaining 40% of the bill.

In January 2005, having regained control of our national oil company,

we decided to put an end to this indignant farce that had proved so prejudicial

to our country. At that time, there were thirty-two OSAs producing

approximately 500 mbd. As I have said, on average they kept about 60% of

the market value of the oil produced. The figures varied considerably, however,

from case to case. In a couple of instances (hard to believe, but this was indeed

the case), contractors were remunerated at more than 100% of the market

price for crude. In other words, the Nation sustained a loss for every barrel of

oil produced. In other cases, the percentage was in excess of 70%, which meant

PDVSA consistently sustained losses, for it was PDVSA and not the contractors

that was obliged to pay royalties at a rate of 30% (royalties are charged to

producers and the contractors allegedly were not producers but mere service

providers). Other contractors were paid “incentives” to the tune of one million

Full Petroleum Sovereignty

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

176

dollars a day for attaining a specified level of production. By the end of 2004,

Pdvsa’s own production costs per barrel were no more than US$ 4/barrel

whereas the production costs of the OSAs had soared to US$ 18/barrel. This

meant PDVSA had to pay more than US$ 3 billions for this concept.

Naturally enough, on the basis of the same chicanery and bending of the

rules, the OSAs were not subject to the 50% rate income tax applicable to oil-

producing activities. Instead, since they were mere service providers, they were

charged the 34% rate for non-petroleum activities.

The first step we took in 2005 was to put an end to situations of extreme

abuse and to limit contractors’ overall remuneration so that under no

circumstances PDVSA – much less the Nation – would sustain production-

associated losses. The national tax authority classified the OSAs as oil producers,

as opposed to service providers, taxing them at the 50% rate for petroleum for

all their income tax returns for fiscal periods still open to review, i.e. from 2001

to the present. These measures, prudent in themselves, generated an additional

billion dollars in tax revenue. The government then set about questioning the

legality of these agreements in their entirety on the basis of solid arguments. At

the same time, a settlement was offered: they should migrate to the new

Hydrocarbons Statute, which established clear rules for the operation of joint

stock companies in which the state company was to have a majority shareholding.

To cut a long story short, negotiations lasted 15 months and culminated in

the following settlement: the OSAs became joint stock companies; the applicable

royalties were raised to one third (33.33%); the appropriate income tax rate was

set at 50%. Additionally, to curb income tax evasion, a 50% “shadow tax” on

gross income was introduced. By this means, if necessary, royalties and income

tax could be topped up by the “shadow tax” so that the sum total would not

drop below 50% of gross income. Finally, PDVSA took a minimum 60%

shareholding. The rights to carry out primary prospecting and exploration

activities within areas determined by the government (coinciding with the areas

formerly granted to the OSAs but drastically reduced to approximately one

third of the original concession) are to be effective for a period of twenty years.

It should be made clear that these joint stock companies are operating

companies. In other words, we are not creating an umbrella under which

something akin to the former OSAs can be revived. Moreover, PDVSA acts

strictly as a partner and will not be party to any so-called “stability clauses” by

Rafael Ramírez

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

177

which in the past the company served as a fiscal shield or, worse still, was held

hostage, securing compensation for private investors to offset any alterations

the National Assembly might make to the tax regime. The joint stock companies

are likewise not subject to international arbitration. To be more precise, private

foreign capital is entitled to seek international arbitration but only against the

government, not against private partners, and only under the terms of the

Investment Protection Law, a general law applicable to the petroleum and non-

petroleum sectors alike.

In September 2006, thirty of the thirty-two contractors accepted the terms

proffered. They included all sorts of international companies, from state-owned

and private corporations to small private Latin American and Venezuelan firms.

In two cases, no settlement was reached and, as a result, the Venezuelan

Government cancelled the respective OSAs on 1

April 2006. Nonetheless,

I am glad to be able to inform you that even in the two cases in which it was not

possible to reach a settlement by 31

March 2006, we continue to negotiate

strictly economic agreements in a very positive atmosphere. These terms are

consistent with the general conditions established for migration to the joint stock

company regime. In other words, we trust that in the near future we shall be able

to state without reserve that we have obtained 100% success on this score.

Joint Ventures

A couple of steps still need to be taken to complete the policy regulation

process President Chávez has established for forging a new petroleum regime

and dismantling the edifice of “petroleum deregulation”.

The first step has to do with Joint Ventures for improving the extra-heavy

crude extracted from the Orinoco Petroleum Strip, currently producing 620

mbd that are transformed into 560 mbd of improved crude. Despite being

approved by the then Venezuelan National Congress in the 1990s, these joint

venture schemes are fraught with economic and legal defects similar to those

described in the case of the OSAs. Some have already been corrected. For

example, joint venture schemes were paying royalties of just one per cent. In

2004, the rate was raised to one sixth and during the current year to one third.

Likewise, they were taxed at the 34% income tax rate for non-petroleum activities.

A review of the Income Tax Law raised the rate to 50% (i.e. the rate applicable

to petroleum activities). Meanwhile, we have invited the four joint ventures to

Full Petroleum Sovereignty

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

178

DEP

migrate to the new Hydrocarbons Statute. In concrete terms, this means PDVSA

will assume a majority shareholding in primary exploration and production

activities.

Finally, in order fully to restore nationalisation of the petroleum regime,

the case of three joint ventures called “Venture Exploration and Shared Profits”

needs to be addressed. These schemes were established in 1997 for exploration

and production of conventional petroleum. They have not yet entered the

production phase although substantial prospecting finds have been made. They

will also be converted in a manner analogous to that for the venture schemes for

improving extra-heavy crude. Once this process has been completed, we shall

have accomplished our aim of establishing a new petroleum regime attuned to

the slogan coined by President Chávez: “Full Petroleum Sovereignty.”

In conclusion, when I began my speech, I mentioned that our experience is

at the disposal of brother oil-producing countries, as a contribution to the

strengthening of our national policies for controlling and defending our

petroleum. It should, indeed, be stressed that the Full Petroleum Sovereignty

policy is based on the principles that founded and fuelled its expansion.

However, it is our belief that this experience also conveys a message to

major consumer countries and private transnational corporations: stability in

the global oil market depends upon stability in oil-producing countries. That

means socio-political stability, justice, and nationwide distribution of oil revenues.

The Full Petroleum Sovereignty policy applies equally to the depletable,

non-renewable resource and to industrial activity. As should be clear from the

explanation we have given, this does not rule out the presence of foreign capital.

Simply a demand is made that it respect our sovereign rights. Clearly, we do not

expect foreign capital to act as a mouthpiece for our national petroleum policy

in consumer countries. We do, though, insist that it refrain from sponsoring

policies conceived by certain consumer countries that still yearn to relive their

colonial or imperial past. Foreign capital is welcome so long as it confines itself

to strictly industrial activity and legitimately seeks to obtain fair profits. At the

same time, however, it must unreservedly accept the legitimacy of our aspiration

to just remuneration for this finite, non-renewable natural resource.

Version: Mark Ridd.

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

179

ilvano Cuéllar (1873-1938) studied ornamentation under Swiss artist Luis

Ramelli (1851-1931). His works began to appear in joint exhibitions from 1899

onwards. He produced a large number of commemorative sculptures, including

marble statues of Epifanio Garay (1922, on display in the front gardens of the

Silvano Cuéllar

Allegory of the Nation

María Victoria de Robayo*

* Director Colombian National Museum.

Allegory of the Nation (1938)

Oil on canvas, 82 x 101 cm

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

180

Colombian National Museum), of José Acevedo y Gómez (at the Bogotá

Municipal Palace) and Rafael Maria Carrasquilla (in the Aula Máxima at the

Colegio Mayor del Rosario in Bogotá), and the bronze statue of Policarpa

Salavarrieta (1911) located in the main square of the town of Guaduas

(Cundinamarca Department). He taught at the Bogotá School of Fine Arts

(1907) and worked as a painter, sculptor and photographer.

In this work Cuéllar creates an Olympus presided over by Liberty,

surrounded by muses and patriotic symbols. Standing in the centre is Bolivar,

addressing the nation, divided into two groups: on the left, are the seated

presidents of the Republic from Nariño to Enrique Olaya Herrera; on the

right are arrayed Colombia’s first inhabitants, the conquistadors, representatives

of the clergy, literary and scientific personalities, and other renowned

Colombian thinkers. The assembly is framed by wax palms (the national tree),

Spanish bayonet yuccas from the Independence Park, macaws, the Capitol, the

church of San Agustin, the Home Office, and the Bolivar Temple, currently

located in Periodistas Park.

Version: Mark Ridd.

DEP

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

181

Construtora

Norberto Odebrecht

Bioceanic Thoroughfares to Regional Integration

he oft-dreamed South American integration is finally becoming a reality

across the map of the continent. Well past the stage of rhetoric, the decision to

launch the Initiative for the Integration of South American Regional Infrastructure

(IIRSA), taken at the 2000 meeting of heads of State in Brasilia, is now bearing

fruit. And Odebrecht is a part of three ambitious projects to build roads linking

the Atlantic and the Pacific Oceans. Two of them, the construction of the IIRSA

South and the IIRSA North highways, are being developed in Peru – the country

where, 27 years ago, Odebrecht launched its international presence. The third

project, which also aims at opening a road linking the two oceans, includes

building a highway in neighboring Bolivia.

South American integration is indeed going ahead, with the support of

multilateral bodies such as the Andean Development Corporation (CAF). One

www.odebrecht.com.br

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

182

of the clearest evidences of this fact was the dedication of the first bridge

linking Brazil and Peru, last January, which marked the physical integration of

both countries.

The 240-meter bridge across the Acre River did far more than span the

natural obstacle that separated the towns of Assis Brasil and Iñapari. It also

cleared to the way for IIRSA South, a.k.a. Interoceanic South, which will

become the first highway linking Brazil to the Pacific Ocean when it is

completed, four years from now.

In the words of the Governor of the Brazilian state of Acre, Jorge Viana,

“This is an enterprise that will redefine the economic geography of vast

expanses of South America’s territory”. He envisions an intense growth of

cargo and passenger traffic that will soon dynamize border regions and will

further enhance productive activities across towns located along the projected

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

183

highway. Numbers leave no doubt: out of Peru’s 27 million inhabitants, about

5.5 million stand to directly benefit from Interoceanic South. A similar trend

is forecast for changes that the highway will promote in Brazil.

The dedication of the bridge crowned an important phase of Brazilian

involvement, for construction of a paved road to the Acre River is already

completed on the Brazilian side of the border. Or, more precisely put, Brazil

completed its participation on Brazilian soil, since much of what is still to be

achieved was entrusted to Brazilian business people. Two out of the five

segments in which the construction of the Interoceanic Highway was divided

are being developed by Conirsa, a consortium led by Odebrecht Perú Ingeniería

y Construcción S.A.C. (70%) and also composed by Peru’s Graña y Montero

S.A. (18%), JJ Contratistas Generales S.A. (7%), and ICCSA, Ingenieros Civiles

y Contratistas Generales S.A. (5%).

For the first time in its history in Peru, Odebrecht will not limit itself to

being a construction company. It will also be one of the investors that will

take up the concession contract, valued at US$ 580 million. And, differently

from the past, Odebrecth will not have to bring Brazilian financial resources

to the table: the company signed on to the Public-Private Partnership regime,

which is being successfully implemented in Brazil. But Odebrecht will also

contribute with its innovative financial engineering solutions.

The Southern Interoceanic Highway will enter Peruvian territory at Iñapari,

close to the Brazilian border. 403 kilometers on, at the Inambari bridge, it will

fork out into two roads – one of these roads will, in turn, also fork out, thus

creating three separate access roads to ports on the Pacific Ocean: San Juan de

Marcona, Matarani, and Ilo. The road linking Iñapari to San Juan de Marcona

is already partly paved – between Urcos and the Pacific, a stretch of road that

runs through Cuzco. The 703-kilometer stretch of road to be built between

Iñapari and Urcos was entrusted to the consortium led by Odebrecht. Until

now, this distance could only be covered by means of a narrow, unpaved lane,

so precarious and full of dangers that very few ventured to travel on it.

To transform it into a modern highway will not be an easy task. The

project presents all sorts of challenges – technical, logistical, social, and

environmental. They include working under the frozen, minus 10 degrees

centigrade weather conditions of the Andes, or the sweltering, 40-degree heat

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

184

of the Peruvian Amazon region, at altitudes ranging from 270 meters above sea

level, at the Brazilian border, to 4,700 meters, at the Andean town of Hualla-

Hualla.

The communities living along the road have different ethnic origins –

ranging from descendants of the Inca and other precolumbian civilizations to

indigenous Amazonian tribes, each with its own set of beliefs, customs, and

traditions that need to be understood, respected, and valued. This inescapable

realization led Odebrecht to adopt special procedures in order to build two

large construction-support sites, at Ccatca and Ocongate, in the so-called Sierra

Alta region of the Andes.

Inhabitants of this region maintain traditions, rituals, and habits that

predate the arrival of Spanish colonists. They speak Quechua, the language of

the old Inca Empire, and share their ancestors’ belief that it is not the land that

belongs to man but rather the contrary. Therefore, they deem it necessary to

give offerings to the Pachamama – or Mother Earth – in retribution for its

many gifts. Mountains, for instance, are considered to be sacred, and to excavate

them in order to retrieve construction materials may be interpreted as

tantamount to desecrating a cathedral.

Opening a road inevitably alters the physical aspect of the territory it will

traverse. In the case of Andean populations, this could have been interpreted as

a sort of profanation. Therefore, it was completely out of the question merely

to show up with men and machines – and there will be about 1,500 men on site,

at the peak of construction. Therefore, in order to assimilate and to integrate

itself into local culture, before any groundwork for the Ccatca and Ocongate

sites got under way, the company participated in two cerimonies de pago a la

Pachamama – that is, of giving offerings to “Mother Earth” –, an ancient ritual

started by the forefathers of the communities that would be directly involved in

the enterprise.

Another construction front for Odebrecht in Peru is no less important:

the so-called IIRSA Northern Corridor, which – like the Southern Interoceanic

Highway – will also afford Brazil access to the Pacific Ocean. This multimodal

transportation axis will link Manaus to the Peruvian port of Paita. Among other

advantages, it will greatly enhance the time and cost competitiveness of products

from the Manaus Duty-Free Zone.

José Paradiso

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

185

Today, in order to reach the Pacific from Manaus, a 20-foot container must

first reach the Atlantic and then the Panama Canal – a feat that takes no less than

42 days (including the average two-day wait to cross the Canal) and costs on

average US$ 7,140. Once the multimodal axis is completed, the same container

will be loaded on a river barge in Manaus, reach Iquitos and Yurimaguas in Peru,

then be sent on its way by road to the port of Paita – at a cost well below the

present alternative: US$ 4,840. It will only take 20 days for the container to reach

Yurimaguas from Manaus, and then a scant two or three more to traverse the

960-kilometer road from Yurimaguas, in the Peruvian rainforest, to Paita.

Odebrecht is engaged as a partner in the construction, exploitation, and

maintenance of this road. It is the leading partner (49.8 percent) of the IIRSA

North Concession concern, along with Andrade Gutierrez (40 percent) and Graña

y Montero (10 percent). The total concern’s investment amounts to US$ 220

million, of which US$ 205 million are earmarked for road construction and

repair. These tasks are under the responsibility of a construction consortium

composed of the same companies, which is likewise led by Odebrecht.

The first stage, launched in January 2006, involves the repair and

improvement of 115 kilometers of road between Tarapoto and the river port

of Yurimaguas, which should be completed by October 2007. Last February, an

additional contract was signed covering the start of the second stage of the

project, involving the repair of two stretches of road, between Paita and Piúra

(47 kilometes) and between Piúra and Olmos (163 kilometers). The latter stretch

includes improving existing bridges. Beyond the complex technical execution

requirements of some segments – for instance, those that involve widening the

road along steep enbankments and deep crevices –, the road will traverse

environmental preservation areas endowed with enormous animal and plant

diversity.

The third construction front for Odebrecht in the Andean region, always

with a view to linking the Atlantic to the Pacific, is building a 114-kilometer road

between El Carmen and Arroyo Concepción, in the east of Bolivia. This project

brings Odebrecht back into that country, where between 1993 and 1995 it built

115 kilometers of the road between Santa Cruz de la Sierra and Trinidad. Old

partners met again under a new partnership: Brazil’s Odebrecht and Bolivia’s

Ingenieros Asociados (IASA). The US$ 75-million contract, funded by CAF,

will be executed within 30 months. It is a part of the land corridor that will make

Ideas, ideologies, and foreign policy in Argentina

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

186

it possible to travel from Brazilian ports such as Santos to the coasts of Peru

and Chile, thus making the rendering of transportation and other services cheaper

between Mercosur and the Andean Community.

The projects described above will establish bioceanic thoroughfares the

goal of which is to sustainably enhance the region’s global competitiveness.

Beyond enlarging markets for local economies by way of binational, regional

and even global exchanges at lower production and logistical costs, these roads

will also enhance regional communication and access, which are key factors for

the distribution of basic goods such as food, medicines, and educational material.

To this, one must add over 14 thousand direct and indirect jobs, as is the case of

the Southern Interoceanic Highway, which will further benefit and integrate a

diversified South American goods and services production chain.

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

187

Grupo

Andrade Gutierrez

Concession makes possible a new

International Airport in Ecuador

y mid-2010, when it shall enter into operation, the new Quito airport

will not only stand as one of the major engineering undertakings in Ecuador

but also provide a genuine source of new businesses, investments, and resources

for the country. The project, which also contemplates the establishment and

development of a free trade zone, forms part of a program aimed at

modernizing Ecuador’s infrastructure and will have repercussions throughout

the continent. Indeed, Latin America can no longer wait.

In the highly competitive arena of global economy, investments in

infrastructure are essential to ensure the competitiveness of countries and

regional blocs. As public resources are limited, it becomes increasingly necessary

for emerging nations, such as Brazil and Ecuador, to establish partnerships

with the private sector for securing the requisite investments.

www.agsa.com.br

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

188

This scenario filled with potential opportunities paved the way for the

Andrade Gutierrez Group to enter the services concession market in 2000

through the establishment of its AG Concessões (AG Concessions) subholding

company geared to the pursuit of business in the areas of highways, public

transportation, sanitation, ports, energy, and airports.

In Ecuador, where the group has been active for over twenty years in the

field of engineering, AG Concessões joined the consortium that won the

concession to build and operate Quito’s new international airport for thirty-five

years. The project includes the operation of Mariscal Sucre, the current local

airport. This contract sets a historic, doubly significant milestone for the company,

as this is its first concession outside Brazil and its first for airport construction.

Infrastructure bottleneck

Quito’s New International Airport – NQIA meets one of the greatest

demands for infrastructure investment in Ecuador. Particularly since the

nineties, the city of Quito has experienced substantial expansion, similarly to

what has happened in the Tumbaco-Cumbaya Valley east of the capital and

west of where the NQIA will be located. The growing business volume puts a

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

189

heavy pressure on all types of services, including air transport. Yet, in the

capital’s entire area of influence there is no airport capable of handling the

cargo and passenger volume this growth has generated. Services are precariously

concentrated in the Mariscal Sucre International Airport – MSIA.

Opened in 1960, north of Quito, the MSIA is Ecuador’s largest airport

as regards both passenger and cargo throughput – in 2005 alone it handled 3.3

million passengers and 130,000 tons of cargo. Its position in Latin America is

very modest, though; it comes after airports such as those of Caracas, Bogotá,

and Lima. Given its characteristics and limitations – it operates close to

maximum capacity at peak hours – the MSIA can be considered neither as an

international nor as a regional airport.

MSIA’s main shortcoming is that it cannot offer nonstop flights to distant

destinations, such as Europe. Perched at 2,800 meters above sea level and only

3,130-meters long, the take-off and landing lane imposes limits on the maximum

weight allowed per plane at take-off. This means that the aircraft has to make

fueling stopovers at other airports to be able to reach its destinations on the

continent.

Lengthening the lane would attenuate the problem, but this cannot be

done. The area surrounding the airport is completely built-up, which precludes

the expansion of existing facilities. Current infrastructure operates at maximum

capacity and, to make things worse, the mountainous terrain restricts the usable

air space and potentiate the risks involved in all airport operations. This reality

has led to the adoption of a solution equal to the challenges and opportunities.

As soon as the new international airport starts operations, the current one will

be deactivated.

International partnerships

Government efforts to build the NQIA began more than twenty years

ago. The first effective step toward this end was taken in 1989, when the

Ecuadorian government set up the Comisión Nuevos Aeropuertos Quito/Guyaquil

(Quito/Guyaquil New Airports Commission) and entrusted it with developing

the project. The work started with an invitation to interested consortiums to

submit their credentials for projecting, constructing, operating, and maintaining

the facility under a fixed-term concession contract. The Commission pre-

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

190

qualified five interested concerns in 1996, including the Canadian Commercial

Corporation – “CCC”, which comprises Canadian development enterprises.

The high cost estimates and the general financial weakness made the project

unfeasible at the time.

Only in late 2000 was the project given new life under the Law on State

Modernization, Privatizations and Public Services Provided by Private

Initiative. Under the new law, the Quito Metropolitan District was authorized

to proceed with the plans for building the new airport.

Negotiations, headed by CCC, lasted several months. Finally, on July 15,

2002, the Corporación Quiport S.A., or Quiport consortium, signed the

agreement to build, operate, and maintain the airport for thirty-five years, as

well as being responsible for the remodeling and management of the current

airport. The consortium is made up of AG Concessões (AG Concessions),

which joined the project in 2004 with 43 percent of the capital; Aecon

Construction Group and Airport Development Corporation – ADC, two

Canadian companies; and Houston Airport System Development Corporation-

HASDC, a U.S. company that operates three Houston airports.

Financing for the project, estimated at US$591 million, has been split

into two parcels. The first, totaling US$376 million, is to be provided by Project

Finance, with financing from Overseas Private Investment Corporation – OPIC;

the Inter-American Development Bank – IADB; the Export-Import Bank of

the USA-Eximbank; and Canada’s Export Development Corporation – EDC.

The remaining US$215 million are to consist of equity and of revenues from

the MSIA.

A design for the present and for the future

The location chosen for the NQIA is strategically situated: a 2.4-thousand

meter high plateau surrounded on three sides by steep ravines (500 meters

lower than the current airport), 20 km from Quito. The area to be built–1,500

hectares approximately–is ten times larger than the one occupied by the MSIA.

With a 3,600-meter landing lane and a capacity for handling 4.3 million

passengers and 69,009 aircraft per year, the project will be implemented in

three stages over the thirty-five years of the concession’s life.

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

191

Quito’s International Airport’s Implementation

By 2010 By 2020 By 2030

No. passengers/year 4,300,000 6,300,000 8,700,000

No. aircraft/year 70,000 92,000 120,000

Cargo (tons) 200,000 360,000 540,000

At first a main take-off and landing lane will be laid down, but the project

envisages its future extension and the addition, at the next stage, of a secondary

parallel runway. Taxiing lanes and underground areas will be built at a pace

consistent with the construction of the primary lane and facilities through the

different stages. When completed, the airport will comprise a passenger

terminal, a cargo terminal, a hangar, warehouses, an administration building,

a maintenance area, and a parking lot, in addition to a free trade zone to be

exploited by the Quiport stakeholders and the local government.

Construtora Andrade Gutierrez, which has solid experience in airport

construction, formed, in association with Canada’s Aecon Construction Group

Inc., the Aecon AG Constructors-AAGC consortium, which has been awarded

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

192

the building contract for a total US$413 million. At its height, the construction

work will employ 1,500 workers in direct and indirect jobs, which will have an

immediate impact on the country’s economy.

The NQIA project is an example of the huge potential of development

opportunities in Latin America. With intelligent, feasible solutions, strategic

partnerships, and a stable institutional environment, each national government

can find consistent answers to the serious challenges of responsible public

management.

Version: João Coelho

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

193

Embraer goes international

ntroduction

Airspace industry, of which Aeronautics is the most significant segment,

has a wide range of highly demanding characteristics that make it special and

differentiated.

Few industries in the world are faced with such an array of awesome

challenges as aeronautics – from the simultaneous employment of multiple

advanced technologies to highly qualified manpower to the requirements of a

global industry by definition to the requisite flexibility to respond to abrupt

scenario changes to the enormous amounts of capital required for its operations.

Based on the experience amassed in over three decades of activity in this

competitive, aggressive, and sophisticated market, we at Embraer like to say

that the aeronautics business rests on five major pillars, which in turn rest on a

single foundation – our clients’ satisfaction, the source of the results that will

ensure our stakeholders’ gains and the enterprise’s continuity over time. These

pillars are as follows:

Embraer – Empresa Brasileira

de Aeronáutica S.A.

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

194

• Advanced technologies: in view of the highly demanding operational

requirements pertaining to safety, drastic environmental changes, and

weight and volume restrictions, the aeronautics industry employs a

wide range of point technologies and serves as a lab for their fine-

tuning before they are passed on to other productive segments and

activities. Complex, sophisticated technologies are involved not only

in the product but also in the development and manufacturing methods

and processes, in addition to the use of the best practices available in

financial and human resources management.

• Highly qualified manpower: to ensure the efficient, productive, and

consistent use of these advanced technologies, it is essential that

qualified personnel be available at all levels of the industry’s

operations: computer-supported projects, relations with suppliers and

clients around the world, manufacturing using sophisticated numerical

control machines, and the devising of elaborate financial solutions

with international institutions.

• Flexibility: abrupt scenario changes that affect the world economy and

the geopolitical order, the most recent example of which were the

terrorist attacks of September 11, 2001, have immediate impact on

the air transport industry and thus on aircraft manufacturers. Flexibility

in adapting to such changes with a minimum loss in terms of efficiency

and costs is of crucial importance for ensuring survival and

preservation.

• Capital intensity: owing to the massive investment required for

developing new products and raising quality and productivity, coupled

with long development and maturation cycles, capital intensity is

another major feature of this business sector. For example: the

development of the Embraer 170/190 aircraft line required an

investment of US$1 billion and the new A350 Airbus plane should

require no less than US$15 billion!

• Global industry: low output and the high cost of production makes the

aeronautic industry an exporting and global concern by nature, as

regards both its client and supplier base and the financial institutions

that back it. The same Embraer 170 aircraft that operates under the

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

195

flag of Finnair, Finland’s airline, in the severe Scandinavian winter

must also stand the high humidity and temperature levels of southern

United States, where it operates under United Express’s flag. In both

cases, Embraer must be permanently available to its clients, providing

local technical support and immediate access to parts and components,

thereby honoring its commitment to the success of their business and

aiming always at their full satisfaction, which will in turn ensure

additional orders in the future. At the same time, Embraer must

experience the different environments in which it operates, so as to

detect positive or negative tendencies and changes in the scenarios

and to be able to provide a speedy response.

All these characteristics make the aeronautic industry into a fascinating

as well as a high-risk business. Failure of a new product may make the enterprise

that developed it unviable and force it out of the market. The disappearance

of traditional enterprises, such as the Dutch Fokker’s and the Swedish Saab’s

exit from the civil aeronautic market are two examples of this harsh reality.

Legacy 600.

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

196

Notwithstanding the major risks involved, developing an autochthonous,

strong, and autonomous aeronautic industry has been part of the strategic

agenda of many nations, which invest heavily in its development over the years,

recurrently supporting it by various schemes – celebrating major Defense

systems and products contracts, financing new aircraft development programs

under favorable terms, and providing all sorts of tax incentives.

Embraer goes international

Aware that winning new markets, which are essential for is growth and

consolidation will become effective only if backed by its physical presence in

these markets, through industrial plants or units for rendering post-sale services

and support to clients, Embraer has, since its privatization in 1994, gradually

extended its operations internationally as a strategic objective.

Far from losing its Brazilian identity and distancing itself from its origins,

Embraer will, through internationalization, ensure new business deals, the

strengthening of its trademark, and the generation of higher-qualification jobs

in Brazil, in proportionately higher numbers than in its subsidiaries and

controlling enterprises abroad.

In 1997, as it regained strength after introducing in the market its ERJ

145 commuter jet, Embraer launched its internationalization strategy by

adopting measures that included (1) expanding or opening sales and marketing

offices and replacement parts distribution centers; (2) participating in joint

ventures; and acquiring traditional, renowned enterprises specializing in

aeronautic services.

United States and Europe: consolidated presence

Embraer has long been active in the United States and in Europe – since

1978 and 1983, respectively – through sales and marketing offices and client

support units (parts and services).

The two units have had and continue to have a vital role in the expansion

of its operations in those two main commercial aviation markets in the world.

Including Brazil, 950 commercial jets, in addition to 800 turboprop planes as

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

197

well as military planes made by Embraer are now flying. The U.S. and the

European markets account for 95 percent of its total exports.

Facilities at the U.S. unit, located in Fort Lauderdale, FLA have been

expanded to keep up with Embraer’s operation since it delivered the first ERJ

145 commuter jet in December 1996 in that market. In November 2006 it had

234 employees and a spare parts stock of over 50,000 items.

With the increase of its business and client base in Europe, Embraer

decided to concentrate into one place, located in Villepinte, near the Paris

Roissy-Charles de Gaulle airport, its sales and marketing and client support

units, including a major spare parts warehouse, one of which was already located

in Villepinte while the other was previously located at the Le Bourget airport.

The new integrated facilities should enhance the operational efficiency of a

body of 194 employees charged with managing assets totaling 172 million

euros and providing services to 37 clients.

Phenom 100 and Phenom 300.

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

198

China and Pacific-Asia: strategic markets

Given the importance of its economy, which has steadily grown at high

rates for the last two decades, as well the strategic significance of air transport as

and integrating factor and a development engine on a continental-size territory,

China has been selected by Embraer as a strategic goal, which requires specific,

differentiated treatment in view of its cultural characteristics, far removed from

the Western world.

Embraer’s presence in China started in May 2000, with the opening of a

sales and marketing office in Beijing, followed soon after by the opening of a

spare parts distribution center in the same city.

In 2001 and 2002, it negotiated an agreement with Chinese authorities under

which it would be allowed to install an industrial plant to make ERJ 145 family

aircraft for the Chinese market.

Finally, in December 2002, an agreement was signed with Aviation Industry

of China II (AVIC II), establishing the Harbin Embraer Aircraft Industry (HEAI),

a joint venture controlled by Embraer, which holds 51 percent of voting shares.

In February 2004, Embraer announced its first sale in China through HEAI:

six ERJ 145 jets sold to China Southern. Other significant sales followed: the

same number of the same model sold to China Eastern Jiangsu in March 2005

and to China Eastern Wuhan in January 2006.

In August 2006, Embraer announced the sale of 50 WRJ 145 planes and

50 EMBRAER 190 jets to the HNA Group, China’s fourth largest air company.

This deal was the first sales contract of an E-Jet on mainland China, with a list

price of US$2.7 billion. ERJ 145 delivery will start in September 2007. The

50-seat jet will be made by HEAI in Harbin, in the Heilongjian Province.

By end-2006, HEAI will have delivered 13 ERJ 145 planes, which, together

with the five sold in 2000 to Szechuan before the establishment of the joint

venture, will bring to 18 the total number of these jets currently operated by

Chinese airlines.

As regards the Pacific Asian region, in December 2000 Embraer opened a

sales and marketing office in Singapore, entrusted with implementing the

enterprise’s trade strategy for the region’s markets, including the Indian

subcontinent.

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

199

The Indian aeronautic market is undergoing a deregulation process and

shows bright growth prospects. In this context, Paramount, a recently established

company, has announced the start of its operations, based on the operational

leasing of two jets: Embraer 170 and Embraer 175.

Also in India, Embraer has signed a major contract with the government

for the sale of five Legacy 500 jets, particularly adapted to meet the comfort and

safety requirements of that country’s authorities.

Expansion of Embraer’s client services and support base

Embraer plans to continue expanding its client services sector not only to

ensure that its clients will achieve excellent dispatchability rates for their aircraft

fleet but also to provide them with other services, such as aircraft maintenance

Embraer’s headquarters. São José dos Campos.

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

200

and repair, to their full satisfaction, which is essential for the achievement of our

goals and the growth of our operations.

Thus, in addition to consolidating its client services in Brazil through the

transfer of its Services Center to the Gavião Peixoto Unit, it has expanded its

services operations in the United States, with the addition of the new facilities of

the Embraer Aircraft Maintenance Services-EAMS, in Nashville, Tennessee, and

in Europe, with the acquisition of OGMA-Indústria Aeronáutica de Portugal

S.A., in Alverca, Portugal, announced in December 2004, at the completion of

its privatization process.

Early in 2005, EAMS expanded its facilities at the Nashville International

Airport to raise its services capacity, in view of the growing fleet of Embraer

aircraft in the United States. This major decision led to the progressive hiring, as

of 2005, of additional EAMS employees, bringing their total to 277 by

November 2006.

Since its establishment in 1918, OGMA has devoted itself to aircraft

maintenance and is today a major representative of the European aeronautic

industry, providing maintenance and repair services for civil and military aircraft,

engines and components, and modification and assembling of structural

components, as well as engineering support.

Its main clients are the Portuguese, the French, and the U.S. Air Forces and

the U.S. Navy, Nato’s Maintenance and Supply Agency, and the Dutch and

Norwegian Navies, among others. In the trade area, OGMA also provides services

to airlines such as TAP, Portugalia, British Midland, and Luxair, and to enterprises,

including Embraer and Rolls-Royce.

In addition to doing maintenance work, OGMA also manufactures

structural components and composite materials for Boeing, Airbus, Lockheed

Martin, Dassault, and Pilatus. By November 2006, its work force totaled 1,606

employees, which makes it Embraer’s largest unit and subsidiary.

Preserving culture, values, and attitudes – an enduring

challenge

The velocity of Embraer’s expansion since 1996, when its ERJ 145 aircraft

went into operation, has brought with it formidable challenges in respect of the

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

201

preservation of culture, values, and attitudes, a concern that continues to guide

the enterprise’s actions.

To illustrate the magnitude of such a challenge, suffice it to mention that in

April 1997, Embraer had only 3,200 employees scattered through five operational

units – three in Brazil and two abroad. Today, nine years later, it has 18,670

employees, scattered through thirteen operational units – five in Brazil and eight

abroad. In just one of its units, located in France, 26 nationalities and 19 languages

are represented in a work force of 194.

One of the managers’ top priorities is to recognize the worker’s ethnic and

cultural diversity and their different working environments, including specific

labor legislations, while developing their maximum potential by directing their

energy toward the business’s objective, in perfect consonance with the enterprise’s

ethical and moral values.

The main element for the achievement of this intent is the so-called

Management Methodology through Action Plan. Each year Embraer prepares

EMBRAER 170/190 family.

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

202

an Action Plan based on a five-year perspective and follows a strategic planning

model that takes into consideration markets, competitors, the enterprise’s

capabilities, opportunities, and risks, priorities, and results, among other factors.

The Enterprise’s Action Plan is based on the equivalent internal plans for

each corporate, functional, and business area, reaching down all the way to the

plant floor, all in accordance with the general guidelines issued by the enterprise’s

top management. The enterprise’s variable pay policy, encompassing all

employees, takes into account the targets agreed by the leaders and the led along

the entire chain of command. The Action Plan is thus the key instrument for the

management of the business, and for all the employees’ alignment with and

commitment to the agreed targets and results.

In addition to the Action Plan Methodology, Embraer maintains a strong

Internal Communication culture aimed at integration with its employees and

their families and at disseminating Embraer’s central values and concepts.

Internal Communication works in a global, integrated manner, through

the use of tools that are both modern of highly attractive to the employees:

• Embraer’s Director and President has his own tool for communicating

with employees, called Em Tempo, issued simultaneously in Portuguese

and in English. More recently, Em Tempo has been issued in special

editions on video;

• Embraer Intranet is a tool of corporate reach and our employees’ main

source of information, which is accessed an average of 24,500 times a day;

• Some 600 internal communiqués are issued annually and made available

to employees through Intranet and bulletin boards; 25 percent of these

communiqués are of corporate reach;

• The Embraer Notícias [Embraer News] is devoted to issues that are

essential to Embraer’s culture: the Management Methodology through

the Action Plan, the importance of cost discernment and contention,

combating waste, team rallying around Embraer’s broad entrepreneurial

objectives, etc.;

• Interviews with Embraer’s top executives are translated and sent to the

units located abroad. As they consistently address market evaluation

and the enterprise’s strategies and objectives, they are well heeded by

employees;

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

203

• Articles published in the national and international media on themes of

interest to Embraer’s business are translated and made available to

employees.

Armed with this vision and determination, grounded on ethical and moral

values, and having integrity as the spring of it actions, Embraer embarks upon

an extremely challenging and competitive entrepreneurial activity. And in so doing

it brings to the markets the image of an efficient, agile Brazilian enterprise known

for its quality products and technological state-of-the-art.

Version: João Coelho

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

204

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

205

D E P

DIPLOMACIA ESTRATÉGIA POLÍTICA

Number 4 April / June 2006

100

Summary

Objectives and challenges of Argentina’s foreign policy

Jorge Taiana

Bolivia, a force for integration

Evo Morales

The brazilian economy’s challenges and prospects

Paulo Skaf

Program of government (2006-2010)

Michelle Bachelet

The trap of bilateralism

Germán Umaña Mendoza

The Amazonian Cooperation Treaty Organisation

(Acto): a constant challenge

Rosalía Arteaga Serrano

Guyana – linking Brazil with the Caribbean:

potential meets opportunity

Peter R. Ramsaroop

Eric M. Phillips

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

206

Paraguay’s political crossroads

Pedro Fadul

The great transformation

Ollanta Humala

Suriname: macro-economic overview, challenges

and prospects

André E. Telting

Uruguay’s insertion into the world economy:

a political and strategic view

Sergio Abreu

“There is another world and it is in this one”

José Vicente Rangel

Pedro Lira

Milan Ivelic

118

131

151

164

200

226

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

207

D E P

DIPLOMACIA ESTRATÉGIA POLÍTICA

Volume I Number 3 April / June 2005

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

208

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

209

D E P

DIPLOMACIA ESTRATÉGIA POLÍTICA

Volume I Number 2 January / March 2005

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

210

María Victoria de Robayo

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

211

D E P

DIPLOMACIA ESTRATÉGIA POLÍTICA

Volume I Number 1 October / December 2004

Silvano Cuéllar – Allegory of the Nation

DIPLOMACY, STRATEGY & POLITICS – JANUARY/MARCH 2007

212

Livros Grátis
( http://www.livrosgratis.com.br )
 
Milhares de Livros para Download:
 
Baixar livros de Administração
Baixar livros de Agronomia
Baixar livros de Arquitetura
Baixar livros de Artes
Baixar livros de Astronomia
Baixar livros de Biologia Geral
Baixar livros de Ciência da Computação
Baixar livros de Ciência da Informação
Baixar livros de Ciência Política
Baixar livros de Ciências da Saúde
Baixar livros de Comunicação
Baixar livros do Conselho Nacional de Educação - CNE
Baixar livros de Defesa civil
Baixar livros de Direito
Baixar livros de Direitos humanos
Baixar livros de Economia
Baixar livros de Economia Doméstica
Baixar livros de Educação
Baixar livros de Educação - Trânsito
Baixar livros de Educação Física
Baixar livros de Engenharia Aeroespacial
Baixar livros de Farmácia
Baixar livros de Filosofia
Baixar livros de Física
Baixar livros de Geociências
Baixar livros de Geografia
Baixar livros de História
Baixar livros de Línguas

Baixar livros de Literatura
Baixar livros de Literatura de Cordel
Baixar livros de Literatura Infantil
Baixar livros de Matemática
Baixar livros de Medicina
Baixar livros de Medicina Veterinária
Baixar livros de Meio Ambiente
Baixar livros de Meteorologia
Baixar Monografias e TCC
Baixar livros Multidisciplinar
Baixar livros de Música
Baixar livros de Psicologia
Baixar livros de Química
Baixar livros de Saúde Coletiva
Baixar livros de Serviço Social
Baixar livros de Sociologia
Baixar livros de Teologia
Baixar livros de Trabalho
Baixar livros de Turismo
 
 