Regional Integration: An Opportunity to Overcome the Crisis

01 March 2009
Article
The crisis as a unique opportunity The current economic crisis is systemic in nature and marks the demise of the neoliberal model of development and globalization. It is imperative that we build concrete alternatives to this model, which, until recently, had been artificially sustained by a bubble of multiple speculative operations. We must also reflect on the fact that this pattern of functioning of the world economy in general, and of the financial system in particular, has come to an end. In this context, Latin American countries have before them a historical opportunity for advancing towards a just and sustainable model of development for the region. When proposing solutions to the crisis, we have the advantage of not having to confront the model while in its full force, as it has obviously reached its limits. Indeed, this is where opportunity lies, as such a broad space for proposing and constructing alternatives was not as visible a short while ago, nor was it expected to appear - especially in the world of “laissez faire - laissez passer”, of the dominant neoliberal “pensée unique” and “the end of history”. The current crisis exposes the failure of a system full of promises, yet incapable of fulfilling them. The women and men excluded by capital’s policies have lost faith in the “free trade” myth and the current hegemonic model of production and management of natural and energy resources. Why regional integration is a solution Regional integration appears today as an alternative that will enable countries in the region to overcome the global economic crisis by creating dynamic economic relations and ties of solidarity among themselves. - The global market crisis and the limits of domestic markets The global markets have suffered a collapse and lost their capacity to generate dynamism for the economies in the region, which, in recent years, had gaily navigated the waves created by spectacular increases in food and livestock, mineral and energy commodity prices. The impacts of the crisis are already becoming visible in our countries, demonstrating that the improvements in some macroeconomic indicators, which had been achieved through this type of insertion into the world economy, have not been sufficient to produce structural changes to the development model. That is, the model has not become one of increased sectoral homogeneity, with a dynamic internal market based on the consumption of those at the “bottom of the pyramid”; diversified exports in terms of both products and trading partners; improved job and product quality; and greater social and environmental justice. There is no guarantee that the economic situation after the crisis will be one of great liquidity of capital and credit, as there was in recent years. Therefore, national governments must face the dilemma of either waiting for the global crisis to pass and when it does, try to slowly recuperate the dynamism in sales of traditional export products on the international market, knowing that the chances of this happening are low; or pursuing limited nationalist solutions that are constrained by the lack of resources and markets most countries in the region face when acting alone. - Energy, food and water for all Latin America – as a region – has abundant water, environmental, social, cultural, mineral and energy resources, as well as considerable technological development capacities. Its chances of attaining food, water and energy sovereignty are greater than other regions of the planet. There are public and private enterprises that own infrastructure and could be brought into the regional integration process. Finally, there are governments and social movements in the region that share a reasonable level of political solidarity with regards to the integration process. When faced with the dilemma posed by the current crisis, then, regional integration appears as a viable and important alternative, as a possibility of moving towards a new development model that is more sustainable and just than the one that has been implanted in our countries until now. Regional integration, as conceived by the people in the region, offers greater opportunities for our countries. It proposes that the principle of solidarity replace savage competition and the free market, which - as we well know and the crisis has clearly demonstrated - lead neither to balance nor justice, as some theorists claimed it would. The peoples1’ integration would be founded on the principles of complementarity and solidarity and would focus on attaining more socially and economically equitable and just societies. The ultimate objective would be to ensure that system works to benefit all men and women in a holistic manner. Non-traditional experiences in integration, like the ALBA (Alternativa Bolivariana para las Américas or Bolivarian Alternative for the Americas, in English), show that complementarity and solidarity between our countries can satisfy the needs of our population in a much more rational and efficient way than intra-regional competition, free trade or having the market act as the system’s only regulatory mechanism. Processes of integration in the region and the dispute for a popular and sustainable integration model While looking at the various integration processes in the Americas, one can say that, on the bright side, they have evolved slowly – so slow that they appearing to be paralysed. One cannot deny that some progressive measures have been taken in Mercosur: for example, the incorporation of concerns about the existing asymmetries within the block and incipient efforts to create funds for addressing this problem. The same can be said for changes in political institutions and the advances in the Union of South American Nations, or UNASUR (its abbreviation in Spanish). However, in more concrete terms, the processes’ potential to improve the quality of living of the peoples and workers in our region is far from becoming reality. On the down side, one can observe the subjugation of these processes to neoliberal thought through the adoption of the “open regionalism” model. The application of this model has left grave marks on the Andean Community (CAN), Central America and the Caribbean. Encouraged by the promotion of indiscriminate competition – both within and between trading blocks – and the signing of bilateral free trade agreements with Europe and the United States, open regionalism has reduced integration to its commercial aspects (trade), thereby eroding possibilities to develop the other dimensions of integration. Nothing indicates that this type of integration has benefitted the societies of these countries. In other words, when one observes the lengthy experience of regional integration processes in the Americas – some having lasted for over 40 years – and takes into consideration the path they have followed until now, it is not clear that regional integration could potentially benefit our people. What is evident, though, is that the rhetoric of political commitment to integration has often been confronted, in practice, with the adoption of solutions that give priority to national political or economic interests. Collective actions and solutions are relegated to a secondary plane, as governments have been unwilling to assume the so-called short-term “costs” of integration. To overcome the political dimension of this problem, the pursuit of the consolidation of national sovereignty must be understood within the framework of a common commitment to deepening democracy and the autonomy of the region; an example of this is UNASUR’s recent intervention in conflicts in Bolivia. In this sense, consistent and sustained commitment of governments to the integration processes is fundamental. Such a commitment must be expressed through the building of solid institutions that function according to policies and common actions developed while truly exercising shared and genuine sovereignty. It is undeniable that what has made an alternative form of integration possible and feasible is the fact that in many countries, the State has recuperated its ability to promote productive and social development or has made significant progress in this area. This is why we must insist that the alternative model of integration we pursue is not incompatible, but rather complementary to the defence of and advances in national sovereignty. This does not imply defending strict nationalism, but rather a possible path towards integration between nations – nations that are not simply victims of imperialist plans, but rather sovereign nations with national development projects. These projects must be articulated on a regional level. Latin America, the new geopolitical situation and the construction of a new regionally based model of development Regional integration can play a key role in this new historical context, especially when we consider two fundamental strategic perspectives that have widened in recent years:
  • Countries in the region want to define their own role in the multi-polar world that is emerging, in spite of the growing difficulties caused by the U.S. government’s unilateralism. They are unable to assume this role on their own,
  • No single country, not even the most powerful ones, acting isolatedly will be able to implement dynamics that differ from those driven by the globalized world market. In other words, to be “post-neoliberal”, national development processes must be linked to regional integration.
  • However, to move forward in this direction, the integration process must be seen as part of a transition towards an alternative model of production and consumption that overcomes the limits of the current development model.
The crisis and the limits it imposes on the possibility of maintaining the status quo should compel us to overcome existing weaknesses and to develop the new dynamism that institutional developments must promote. These efforts must be linked to the need to respond to the crisis with an autonomous and alternative development project for the region – that is, one that has been emancipated from the interests of current world powers. Defining the path that will lead us to the type of regional integration we propose:
  • - A regionally organized and regulated production strategy First and foremost, this strategy must be radically different from providing support for major companies that are seeking to acquire at the regional level the strength they need to compete in the global market. This type of integration only results in increasing capital’s mobility and profits. This strategy has been promoted in the region for over a decade, through proposals such as the Free Trade Agreement of the Americas (FTAA) and the Initiative for the Integration of Regional Infrastructure in South America (IIRSA), as well as the push for progressive liberalization during negotiations at the World Trade Organization (WTO). These companies will soon attempt to reactivate this process, which could advance freely and rapidly if it is not confronted by an integration project based on solidarity that serves as a political and economic counterproposal. This is not, however, the kind of integration we want. To construct regional integration as an alternative to the crisis, we must focus our attention on two essential elements. First, one important task for the on-going process of building alternative regional institutions should be the regulation of these companies’ operations at the regional level, taking into account social, cultural, environmental and other interests. Second, it is fundamental that the production chains in the region be restructured according to a new scale of the companies’ operations at the regional level. This must be done in a way that ensures that their expansion is not seen as an attempt to reaffirm hegemonies and the power of some countries over others, but rather as one possible way of generating economic dynamism, employment and wealth for the entire region.
  • Overcoming asymmetries as a short-, medium- and long-term objective One of the priorities of the integration process should be to overcome asymmetries between countries and within the countries of the region, creating integrated production systems as well as production, service and trade circuits in which everyone may become integrated. The fundamental objective would be to use this process to generate dynamic development opportunities for regions and countries that are currently experiencing difficulties or suffering from stagnation. Given the historical accumulation of fragilities of entire regions and countries in Latin America, we should first adopt specific policies that seek to compensate existing asymmetries in the short run, namely in the area of social development, in a way that reduces the differences and, at the same time, allows these regions to develop their ability to take advantage of dynamic opportunities in the process.
  • Regional technical and cultural production Incentives could and should be provided for important elements, due to their capacity to propel the regional development process and to increase the visibility and popularity of our alternatives. They also have potential to generate dynamism and to contribute to finding solutions for specific problems in the region. One such element is the integration of centres of technological development and cultural production/broadcasting in the region. In several countries, there already exist centres for technological development (specialized or generic) in various fields ranging from agriculture and livestock to the aeronautic and pharmaceutical industries, among others. There is no reason not to integrate these centres. We should do so in order to take advantage of their synergies and use the resources generated in the region for the benefit of all of Latin America. The same can be said for the region’s enormous potential in audiovisual production and sports, and its even greater potential for development, which only the creation of a new scale of consumption derived from an expanded regional market could provide. Furthermore, this proposal must be defended during negotiations in the WTO and with other trading blocks (like the EU) on “Rules of Origin”. The major powers specifically use these rules to stop small countries and emerging economies from coordinating their productive activities with the goal of exporting to markets outside of the region.
  • Small and medium enterprises as a priority Another element is providing general or sector-based incentives for the development of small and medium enterprises (SMEs). SMEs could be stimulated by the integrated development of regional markets. They could also operate in a range of fields – from software development to tourism (e.g. a network small hostels or hotels) – and take advantage of the region’s diversity in cultures and environments. Small and medium enterprises offer real potential in terms of job creation. Moreover, by linking them to the regional integration process – that is, one that truly supports development – they could lend significant social legitimacy to the process.
  • Regional food sovereignty and support for family farming in small and medium production units The viability of certain local and regional items produced by family and peasant farmers is compromised by the limits of consumption in these regions and in some countries. Therefore, the creation of a regional market could help to guarantee the viability of a more diversified production of agricultural products. This production must differ from the homogeneity of the products and productive processes that are typical of agribusiness, with its highly concentrated and transnationalized commercialization structure and technological packages. The distribution of these products could also gain momentum and promote regional gastronomy, gastronomic tourism and other activities that could generate economic dynamism and foster cultural integration.
  • Facilitate intra-regional public transportation with the people as a priority Integrating the region’s transportation infrastructure is another fundamental element that would contribute to the regional integration process. It must take advantage of the diversity of existing modes of transportation and take into account local solutions for addressing environmental and climate issues. It must also consider regional perspectives for technological production and development and the possibility of creating regional public enterprises. Here, we need to think big, as problems in long-distance transportation cannot be resolved by building more highways. Why not think of reactivating and integrating local and regional railway systems? Why not think of integrating sea and river transportation by taking advantage of what already exists? Why not think of creating a regional airline company that makes the integration of a network of medium-size cities in the region feasibly by using small- and medium-size planes that the aeronautic industry in the region already has the potential to produce.. We are not talking about an abstract problem, but rather one that every Latin American who has attempted to travel or transport cargo within the region has faced. It is important that we consider the impact of these processes in each country. We must also reaffirm strong support for the improvement of public transportation in urban centres, as a way to discourage the use of individual means of transport that have impacts on the demand for energy.
  • Regional financial integration The debate about the Banco del Sur brought to light the political challenges and different perspectives that exist in various countries. But it also showed the enormous potential and the need to develop a regional financial system that could simultaneously regulate finances on the regional level and protect economies in the region and the regional economy from external shocks. It should also create one or more mechanisms for fostering regional development and allow for a dynamic process of exchange between the Latin American economies, which does not mean sanctioning, through the use of currency, the power of the central capitalist economies. In other words, it should allow for the creation of a regional currency or a system in which a common unit of reference (that does not necessarily aim to make a common currency feasible) would be used in the region. Rather than acting as restrictions, the difficulties and financial turbulence should serve as a motive for intensifying discussion on and actions aimed at moving forward with the process of regional regulation and financial development.
  • Regional energy solidarity and complementarity Difficulties in regulating potential energy generation through regional agreements should have led to the consolidation of a regional public entity that regulates and promotes an integrated energy system. Moving beyond limited national interests, efforts to render energy generation feasible at the regional level must promote the use of all alternative sources, so that production methods are the least harmful as possible to the environment while, at the same time, ensure the satisfaction of a new pattern of production and consumption that will be established by an alternative regional development process. Reducing distances between producers and consumers to decrease the amount of energy used to transport products could be one of the many initiatives that would help to consolidate a new energy model. Fundamentally, this new model must be based on the premise of energy sovereignty and solidarity, on striving for increased efficiency and the diversification of energy sources, namely renewable ones.
  • A new model for participation and transparency Political and social sectors in favour of deepening Latin American integration processes must come together to reflect on what the appropriate mechanisms for civil participation are. We must avoid reproducing the logic inherited from the 1990s. In this sense, in order to promote the consolidation of democracy, mechanisms of social participation must be effective channels of dialogue and for advancing proposals through which througsocial movements and organized civil society (made up of diverse political actors, including members of political parties and parliament) may express their needs and views on sensitive issues. For example, in the case of productive or infrastructure projects that have different kinds of territorial and environmental impacts, we need to develop a methodology that guarantees real participation in the decision-making process. This methodology must go beyond the logic of “presenting environmental impact studies”, which capital has learned to manipulate for its benefit. It must guarantee that the decisions made take into account the collective interests of those directly affected by the projects, social license (as foreseen by the U.N. International Covenant on Economic, Social and Cultural Rights, ESCR, art.1, paragraph 2.), the redistribution of the project’s benefits and its concrete contributions in terms of reducing poverty.
Constructing integration for and by the Peoples The essence and the motor of a new regional development model must be: the integration of millions of Latin American women and men into a new system of consumption and production that generates wealth and employment, allows for the expansion of the market in the region, builds an alternative development process and strives to drastically reduce all kinds of inequalities that exist among the people in the region. In the same way we have already stated that we must overcome asymmetries between countries and within countries in the region, we must also assume a commitment to reducing social inequalities between the peoples and within the peoples. Here, we, the social movements, are proposing the transformation – of the socioeconomic development model – by transforming ourselves; that is to say – we conceive the integration of diverse social subjects within our peoples as the starting point for the integration of the peoples. As such, the integration of the peoples – of our nations – must not only be “based on the political transformation for the peoples”, but also based on the social transformation of the people. We conceive this process as an opportunity to advance in the transition towards another model of production and consumption, which requires new forms of organizing social, community and labour relations. Transforming weakness into strength, needs into potential for development, inequalities to be overcome into possibilities for transformation and technological development, respect for cultural differences into the driving force of the regional integration process, even in economic terms. This is to be the engine of an alternative we can build so that – far beyond the haziness and the turbulence of the current economic crisis – we may see our real potential for creating a different and better world in Latin America and the Caribbean. We can then integrate this new world with other regions that must also take advantage of and develop their own possibilities. Today, we, the social movements, when addressing the current global crisis or the combination of specific crises, have the historical opportunity of contributing towards what could be the beginning of the final stage of an exhausted system, which has been backed into a corner. We must go beyond merely responding to the crisis, caused by the inherent contradictions of the system itself, and move towards a real confrontation between the included and the excluded. This will only be possible if we are able to build an alternative productive matrix that allows us to live well and enjoy the good life. www.alternative-regionalisms.org Hemispheric Social Alliance