Mercosur Opens the Doors to Socialism

The MERCOSUR alliance officially welcomed Venezuela as a permanent member.

By ALONSO SOTO | REUTERS | AUGUST 1, 2012

On his first foreign trip since undergoing cancer treatment in Cuba earlier this year, Venezuelan President Hugo Chavez hailed his country’s welcome by fellow South American leaders into a troubled regional trade bloc on Tuesday.

Ignoring criticism that Venezuela’s entry could eventually cause greater dysfunction among the Mercosur trade bloc’s members, Chavez cast the event as a continuation of his self-styled revolution and a sign of greater ascendance for South America as a whole.

“Our north is the south,” the Venezuelan president said, evoking Simon Bolivar and other revolutionaries who wrested the continent from colonial rule. “Mercosur is, without a doubt, the most powerful engine that exists to preserve our independence.”

Chavez, who recently declared himself cancer-free, stood at a podium throughout his 20-minute speech in Brazil’s capital and spoke in a clear, strong voice. Later, after a meeting at Brazil’s foreign ministry, he jigged and declared that his health “is very good, as you can see.”

The meeting was overshadowed by controversial events that enabled Venezuela’s entry into Mercosur, which also includes Brazil, Argentina, Paraguay and Uruguay. The grouping now accounts for about $3.3 trillion in combined gross domestic product, and the leaders said it would be the world’s fifth-largest economy if it were a single nation.

The expansion of Mercosur was criticized by many who see a paradox in the protectionist policies and leftist slant that increasingly have come to dominate a bloc originally created to liberalize trade.

After years of stalled negotiations with Caracas, the group hastily accepted Venezuela despite the objections of Paraguay, a marked absence at Tuesday’s meeting. The other three countries made their invitation to Chavez after suspending Paraguay in June because of the controversial impeachment there by conservative legislators of leftist president Fernando Lugo.

That move troubled critics, who said it was emblematic of the decline of a bloc that was founded in 1995, at a time when a group of free-market reformers was dominant in the region.

“What was once an economic bloc has now been reduced to a political sideshow,” said Mario Marconini, a former Brazilian trade secretary who is now a business consultant in Sao Paulo. The inclusion of Venezuela despite the veto of a full-fledged member, “is a fatal blow to its economic credibility.”

Brazilian President Dilma Rousseff said on Tuesday that Paraguay’s suspension is justified until the country “normalizes” its internal politics. Brazil and other neighboring countries have argued that Paraguay must proceed with its regularly scheduled presidential elections next year before they consider its government to be stable.

FOCUS ON CHAVEZ

Most of the other leaders present glazed over the Paraguay controversy, and focused instead on criticizing the orthodox economic policies of the developed world. They cited Mercosur as a vehicle that could further regional goals of fair trade, equitable growth and social inclusion.

Chavez said construction companies from Mercosur countries should take part in ongoing projects to build millions of subsidized homes in Venezuela. Argentine President Cristina Fernandez said the region would continue to produce all-important raw materials for the global economy, but demanded “financial stability” in return from richer countries.

Mercosur, she said, could “make this new pole of power indivisible, indestructible.”

Chavez, who has spent more than 13 years in office, has pursued a personality driven government that has scared away foreign investors and crippled productivity. His acceptance by Mercosur, opponents say, will give him one more thing to boast about as he campaigns for another six-year term ahead of Venezuela’s presidential election in October.

Officially, the leaders hailed Venezuela’s strengths as a major oil producer and an important market for everything from Brazilian machinery to Argentine wheat. In practice, though, Venezuela can’t fully participate in the bloc until it agrees to accept a common tariff adopted by Mercosur, common agreements with third-party countries and other prerequisites that Chavez has failed to embrace since talks for inclusion began in 2006.

In a statement Tuesday, Brazil’s National Industry Confederation, a powerful business group, reminded Venezuela that “the new member has obligations to fulfill.” Citing the common tariff and other existing bloc conventions, the group urged Mercosur to establish a timeline by which Venezuela must comply.

Mercosur, the group added, “should focus on reinforcing the stability and predictability of the economic bloc.”

BLOC IS ALREADY TROUBLED

Many fear Venezuela will only complicate relations in an already dysfunctional grouping. “The bloc is a mess,” said Rubens Barbosa, a former Brazilian representative to Mercosur who is now a consultant.

“Just imagine if you start adding Venezuela and others,” he said, noting recent discussions to include Bolivia and Ecuador, two countries with close ties to Chavez.

Tuesday’s ceremony was accompanied by a trickle of business as Chavez and Rousseff formalized a previously disclosed plan by Conviasa, the Venezuelan airline, to purchase 100-seat jets made by Embraer, the Brazilian aircraft manufacturer. Under the terms

of the agreement, Conviasa will pay about $270 million for six Embraer 190 jets, with an option for 14 more.

Meanwhile, Venezuela and Argentina signed an agreement for greater investment in each other’s oil sector. PDVSA, Venezuela’s state-run oil producer, will invest in Argentine petrochemicals, and YPF, its Argentine counterpart, will invest in Venezuelan oil fields, according to the agreement.

Latin America Infiltrated by Statists, Socialists and Fake Free Marketeers

By LUIS MIRANDA | THE REAL AGENDA | JUNE 13, 2012

The numbers and types of Statist, Socialist and Corporate Capitalists in power around Latin America have grown exponentially in the last two decades, and with them so have the masses of well-meaning people who believe their lies about social justice, the goodness of big government and the advantages of service economies sponsored by the most powerful corporations in the planet. Some of these corporations, by the way, have bigger revenues than many nations from that region and the world. As if the emergence of those movements was not bad enough, lately, the heads of socialist, statist and false free market groups have united to form more easily controllable commercial and political alliances, which they say, will bring real development to their countries and their people.

The most recent of those alliances is the one formed by Chile, Peru, Colombia and Mexico, called the Pacific Alliance. According to the front men who act as the creators, — the presidents of the four countries — the alliance is an effort to unite and to seek the realization of common goals. Chile, Mexico, Peru and Colombia are a handful of Latin American states with the least damaged economies in the region. In fact, Chile has become a story of success in the last decade or so, given its application of policies which have allowed for decent growth based on the country’s appetite for saving. However, Peru, Colombia and Mexico are a different story, which begs the question, why would Chile go into business with well-known corporate controlled failed states?

Mexico has for many years worked under the auspices of the United States, partnering on the infamous North America Free Trade Agreement (NAFTA), which has been charged with eliminating the industrial production of the US by design, permitting the free movement of people — illegal aliens — from the south to the north, while rewarding companies that move their operations outside American soil and avoiding corporate taxes, among others. Peru is a different story. Its past has always been highlighted by poverty, government corruption, and statist rule. This last aspect has not changed a bit. The country went from Alberto Fujimori to the current Peruvian leader Ollanta Humala, who rose to power in 2011. He is recognized as a anti-market extremist.

Meanwhile, Colombia is perhaps the strangest ally in a group that supposedly seeks development and free trade. Colombia, just as Mexico has been a close friend of the United States in the failed war on drugs, which has proven an insufficient and poorly managed effort to curb drug trade and the violence that stems from the existence of armed groups and governments controlling the flow of narcotics. In reality, the so-called war on drug trade is a facade to hide the worldwide campaign for the control of illegal drugs, their markets and the billions of dollars in profits that are laundered  every year by the largest banks on the face of the planet.

Groups such as the Pacific Alliance are not more than controlled dissidence, easily manageable by their sponsors. In Latin America, the creation of economic or political blocs to “further development” is not new. Before the Pacific Alliance, nations formed UNASUR, ALBA, MERCOSUR, Caricom, CELAC, the Andean Community and many others. The results of these unions both in the political and economic realms have been largely the same: Nothing.

When asked about the impact of MERCOSUR in their purchases of raw materials or sales of finished products, companies in Latin America privately say that the MERCOSUR is just a window dressing initiative that has done little or nothing to improve commerce among its members. In fact, as we speak, both Brazil and Argentina are engaged in a trade war that threatens to bring down important business deals between commercial partners in both countries. Argentina adopted a strong protectionist policy while Brazil refuses to allow the flow of Argentinian goods to its importers.

The leaders of countries like Bolivia, Venezuela and Ecuador have failed miserably to bring development to their people. They arrived to power promising better living conditions to supporters to only turn into tyrants with socialist leaning ideas. Despite this record, the members of the Pacific Alliance seem to believe that a new group of countries supported by China, will bring about the riches and improved living conditions that past presidents and community leaders failed to provide. All members of the Alliance intend to attract even more Chinese aid to their countries, trying to emulate Brazil’s efforts to open the door to the communist regime. Their official statements allege that they seek to expand trade with Asia.

By bringing China into the equation, the Pacific Alliance seeks to attract other business partners from the region, but only those who can show historical compromise with free trade and economic development. Under this premise, other smaller nations such as Costa Rica and Panama are attempting to jump on the bandwagon. Ironically, both Costa Rica and Panama have been American allies in the war on drugs and have implemented policies designed to slowly and quietly crack down on citizens’ rights.

For example, Costa Rica permitted the arrival of US military men into its territory under the excuse that it would help fight the war on drugs. As if that wasn’t enough of a violation to the country’s sovereignty, the US has now been allowed to set up a naval base in the Atlantic coast. During the early years of the construction of the Panama Canal, this country basically surrendered its sovereignty to the Americans, who later yielded possession of the Canal to China in 2000. This is one of the biggest concerns that critics have expressed about the newest integration. Some of these nations have associated with communist, statist or marxist groups in the past, but now fashion themselves as sponsors of free markets, free trade and social justice.

The official announcement of the Pacific Alliance was made just days ago by Chilean president Sebastián Piñera, who got all poetic about the new bloc. “From the heights of Paranal, in the most arid desert in the world and under the clearest of skies, we have signed a pact officially giving birth to the Pacific Alliance,” he said. “There are no incompatibilities or exclusion vis-a-vis other integration efforts. We are against nobody but rather in favor of even greater integration.” Meanwhile, his new partner, Mexican president Felipe Calderon said that “The Pacific Alliance’s economic potential is significant.” His counterpart from Colombia echoed the same kind of prospects for the new association by adding that the Pacific Alliance is the “most important integration process in Latin America.”

Although the existence of completely opposing groups was not cited as a reason to form the Pacific Alliance, behind the scenes governments like the Chilean and the Colombian have shown their concern about the creation of secretive partnerships like the São Paulo Forum, an organization composed by followers of Fidel Castro, Hugo Chavez and Luiz Inacio Da Silva, one of the founders of the group. These leaders subscribe to ideologies also shared by Ecuador, Nicaragua, and Argentina, although these last three nations do not express their adherence publicly. The lack of public recognition however, hasn’t prevented the citizenry of those countries from suffering from poverty, crime, insecurity and abusive, repressive governments, which are exactly what their leaders promised to eradicate. The São Paulo Forum is also linked to narco-traffickers and armed Marxist revolutionaries, of the likes of the Nicaraguan Sandinistas as well as the Russian and the Chinese governments.

The above mentioned scenarios are the ones critics of these alliances often warn against. The integration of countries that agree to surrender their independence without previously consulting their citizens in order to open the door to fascist, socialist or communist ideologues, who supposedly have the best of intentions in mind has been the common result of previous attempts to create strategic commercial and political groups. It happened in Europe, Asia, North America and definitely in Latin America. Most if not all of the unions assembled in the name of development and progress were just shams hidden behind charismatic men and women who preached the gospel that the people wanted to hear.

While military agreements have served the interests of those who traffic arms in exchange for cash or drugs, commercial accords rendered many nations poorer and more dependent on powerful corporate interests. The question that must be asked is why do political leaders continue to surrender sovereignty in order to have trade when they are not mutually exclusive? In fact, the world was never a more stable place, economically and financially, than when countries traded in a bilateral and multilateral ways, without surrendering the ownership of their resources and laws to unelected technocrats who are now in total control of everyone’s destiny.

Brazil faces forecasts of slow growth

UPI
November 1, 2011

Brazilian government economic planners have been served the first warning this year that the Latin American country’s commodities-fueled economy may be slowing.

Data released by the state development bank BNDES indicated the sluggish growth wasn’t only a reality but one that had gained momentum in recent months.

Reports of the continent’s largest economy slowing contrast with projections that continue to indicate healthy activity in most sectors of Brazilian economy. The slowdown prognosis is based on lower lending figures, which indicate momentum in economic activity, the data showed.

The bank said its loan disbursements in 2011 will miss their initial target for the year, reflecting a shortfall of $2.95 billion-$4.14 billion. The estimated total loan disbursements for the year are likely to be no more than $83 billion against estimates of up to $87 billion.

The drop is partly the result of corporate borrowers changing their minds about making new credit requests but it represents the first annual decline in the figure since 2008, when Brazil was battling the global economic downturn.

The financing slump comes amid forecasts that Brazil’s economic growth this year may be less than half that in 2010. Last year’s economic growth, recorded at 7.5 percent, was the fastest in 24 years of economic activity in Brazil and attracted investors from all over the world.

At least part of the drop in borrowing from BNDES stems from conservatism among Brazilian corporate entities that have been buffeted by investor speculation and worries over the possible ramifications of the eurozone crisis.

Talks on building new business bridges with the European Union have been stalled for more than a year and discussions on reaching a free trade deal with Europe within the framework of Latin America’s Mercosur trade bloc have been inconclusive.

Officials say the eurozone crisis may encourage European negotiators to drop their objections to Mercosur, which is seen by the EU agriculture sector as a potential threat. EU analysts have said a deal with Mercosur will help EU to forge new trade links and find new sources of revenue at a time of adversity.

Several Mercosur member countries are doing well and Brazil in particular has a vast surplus that promises EU exporters a potential bonanza if a trade deal is realized.

Mercosur member countries are Argentina, Brazil, Paraguay and Uruguay as full members, Venezuela as a full member awaiting confirmation and Bolivia, Chile, Colombia, Ecuador and Peru as associates.

Analysts said the news of a potential economic slowdown in Brazil will likely cause a ripple effect in the rest of the Mercosur region, which has a gross domestic product of $2.895 trillion.