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Latin America facing uncertainty 

Latin America

The most important integration projects of the 90s had their roots in the crisis that the international economic system, designed at Bretton Woods in 1944.

The detachment of agreed rules and structures in the mid-1940s favored a determined liberalization of the international economy that, among its ingredients, also had the gradual formation of new commercial blocks.

The European Union, NAFTA in North America and Mercosur in South America represented some of the cornerstones of this process of reorganization of the post-Bretton Woods international economic order.

Far from embodying autarkic enclaves, the ideology of the time posed the formation of these new macro-regions as preliminary steps for a wider economic integration in the world.

The acceleration of liberalization and integration processes at the beginning of the 1990s did not occur in a geopolitical vacuum but, on the contrary, also represented the direct consequence of the new configuration of the international order that emerged from the end of the Cold War and the consequent consolidation of American hegemony in the world.

Economic globalization and American unipolarism represented, in this sense, the two faces of the new international system that emerged from the end of the bipolar conflict and the implosion of the Soviet bloc.

For Latin America, the signing of NAFTA and, to a lesser extent, the constitution of MERCOSUR, initially indicated the consolidation in the Latin American region of a new economic model, the neoliberal one, and ratified the unquestionable belonging of the Western Hemisphere to the US geopolitical project.

The geopolitical and economic pillars underlying the signing of the Latin American integration projects of the 1990s are currently shaken by strong tensions, which question their legitimacy and cast a shadow of uncertainty over the Latin American region.

Latin America is witnessing an uncertain erosion of the legitimacy of the US hegemonic project. The excesses of the neoliberal model have produced serious social imbalances that have questioned its viability as an economic paradigm.

To these structural factors is added Trump’s nationalist project, which harshly denounces some of those pillars that, like economic integration itself, had been central ingredients of the new post-Cold War order promoted by Washington.

The American turn generates paradoxical images, such as that of a theoretically nationalist government, that of Andrés Manuel López Obrador, who is forced to fight a desperate fight so that the United States, the former champion of free trade, does not cancel NAFTA down.

In turn, in addition to the general weakening of the neo-liberal paradigm, Mercosur has cracked by three specific phenomena. In the first place, this South American economic integration project was weakened at the end of the global super-cycle of the prices of the main commodities exported from the South towards 2012.

Second, the governments of the former president of Argentina, Mauricio Macri, the president of Chile, Sebastián Piñera, and the president of Brazil, Jair Bolsonaro, tried to take centre stage of the institutional framework of Mercosur, aimed at promoting future political integration.

Finally, this integration project suffered for a decade the competition of the Bolivarian integration model, UNASUR, richly subsidized by the inputs generated by Venezuelan oil. Now in clear decline, UNASUR generated, especially between 2015 and 2017, a strong regional polarization that undermined integration projects.

The American estrangement of multilatralism and the erosion of unipolarism have been opening windows of opportunity until recently non-existent for new actors to take over, or do so again, in the region.

Pushed by the strength of its extraordinary economic success, China has increased its projection capacity in the region. In addition to maintaining a growing trade with Latin America, huge Chinese banks and companies are in the process of increasing their loans and direct investments in the region.

In fact, the latest economic reports for 2019 indicate that China has become the main source of financing for regional development projects, surpassing traditional organizations such as the World Bank or the Inter-American Development Bank.

To them are added the large investments of companies such as the oil giant Sinopec in Argentina, Ecuador or Venezuela, of multiple Chinese mining companies in Chile, Peru, Colombia, Brazil and Mexico, or the Huawei technology colossus, everywhere.

It is no accident that CELAC has incorporated, among its strategic objectives, the expansion of political, economic and commercial relations with Beijing.

Less credible, despite its rhetoric, is the ability of a country like Russia to increase its economic and political presence in the region.

Although countries such as Venezuela and Cuba have experienced in recent years a significant increase in interaction with the Eurasian giant, Moscow does not seem to have the necessary resources or, probably, enough geopolitical interest to sustain a considerable increase in its presence in Latin America.

However, Russia is emerging as an actor with military and intelligence capabilities that are not negligible, especially through the underground cyber wars.

The European Union, on the other hand, endowed with a portentous economic potential, has been weaving important trade agreements with numerous countries in the region and, nevertheless, its chronic absence of a coordinated foreign policy reduces its influence in Latin America.

It is evident that this can be attributed in part to the prolonged agony of Brexit and the complex negotiations that this has implied, as well as the difficulty in responding to the waves of migrants from Africa and the Middle East, which have absorbed many energies and resources from the European nations in recent years.

Be that as it may, the beginning of the new millennium has seen the Latin American region move in an international environment where the weakening of American unipolarism and neoliberal multilateralism has produced a significant diversification of the possibilities of political and economic interaction.

Post-Cold War Latin American geopolitics is transfigured and torn apart, without emerging, however, a new order. That is why the current moment does not allow us to clearly see where the region will move.

Among other reasons because the great actors, such as China and Russia, do not seem to have an attractive ideological project and really alternative to the United States. Moreover, it is clear that betting heavily on an approach to China poses risks, while its model or possible hegemony project does not appear to be more benign than the US, so it does not produce structural incentives to move towards it.

With all this, it may be suggested that the current moment may be conducive for Latin America, instead of moving towards a new hegemonic umbrella, offered by various superpowers, to take advantage of the relative emptiness of the conjuncture to reinforce its internal integration processes, which they already have a long history and a complex institutional framework and that, if strengthened, could help protect the region’s political autonomy in the future.

In the case of South America, it should be noted that, although Mercosur has lost some dynamism, it remains one of the greatest potential sources for future economic expansion of all the countries in the area.

But, in addition, this project is not limited to the economic and commercial dimension, as it has common initiatives ranging from infrastructure to telecommunications, science and technology in education, border cooperation in the fight against the transnational illicit and integral promotion of human rights. These should and could be retaken forcefully.

The new integration could be articulated within a political-ideological model different from the neo-liberal one that, although it has reduced the distance in terms of wealth between the South and the North of the world, has generated a dramatic increase in inequalities within countries.

The governments of the region could bet on a non-neoliberal Latin American integration project that contributes to generating new regional structures for governance of global political-economic processes.

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About the author: Luis R. Miranda

Luis R. Miranda is an award-winning journalist and the founder & editor of The Real Agenda News. His career spans over 23 years in every form of news media. He writes about environmentalism, education, technology, science, health, immigration and other current affairs. Luis has worked as on-air talent, news reporter, television producer, and news writer.

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