Posts Tagged ‘Mercosur’

Lula da Silva and Chavez: Are these two on the same team but playing different games?

Hugo Chavez’s “revolutionary” economic and political policies may be alienating his neighbors and greatest political allies. As U.S. attention turns further toward the Middle East, Latin American countries are looking elsewhere for world trading partners, and its leaders are emerging with potential to take the region to a different version of the Left.

Venezuela is still waiting to be incorporated into Mercosur, the South American trading bloc that includes Brazil, Paraguay, Uruguay, Argentina, Colombia, Bolivia, Chile and Ecuador. After Chavez’s most recent bellicose threats against Colombia, the legislatures of Brazil and Paraguay have stalled or tossed out provisions that would bring Venezuela’s entry to a vote.

“President Chavez with his statements is not helping; sometimes it seems he is not interested in Venezuela’s integration to Mercosur given his repeated contentious attitude”, said Paraguayan Senator Alberto Grillon vice president of the Foreign Affairs Upper House committee.

Earlier this week Mercosur officials headed to the EU, where Chavez has few friends, on a mission to increase trade and technical meetings between the two economic bodies. On Saturday, they signed a measure creating Econormas, a program designed to promote economic integration and sustainable development in Mercosur member nations. The $27 million plan is comprised of $18 million from the EU and $9 million from Brazil Argentina, Uruguay and Paraguay.

Elsewhere in Latin America, both leaders and country residents have been speaking out against Chavez and his version of populism, but not against the political and economic left. Last week former Mexican President Vicente Fox told Latin American and European leaders that Chavez’s influence and increasing authoritarianism was a danger to the region. Also in the week, Uruguay‘s former leftist guerilla Jose Mujica won the presidency by moving away from Chavez. He dismissed Chavez’s regime and claimed to have a deeper connection to South American golden boy, President Lula da Silva, of Brazil.

“[Voters] were afraid of the guerrilla past and the identification with Chávez,” says Oscar Bottinelli, a political analyst and head of the Factum polling group in Uruguay’s capital, Montevideo. “They were afraid he will affect liberty and be repressive… It’s the model of Lula,” says Mr. Garcé. “To win the elections [in Brazil] he put on an Armani suit and said he wanted a government of the left but moderate to permit a political economy respectful of capitalism.”

Brazil’s boom and Lula’s capitalist-loving left can’t help but look attractive compared to Chavez’s handling of the Venezuelan economy. The country has fallen captive to lower oil prices, the global recession, and now is in recession itself. Its GDP, an indicator Chavez dismissed as an instrument of capitalism, contracted by 4.6% in the 3rd quarter. Private investment shrank as Chavez expanded the public sector under his state-driven economic model. By this week the government will have taken control of 7 small, private banks to be “rehabilitated” by the state. Possibly most damning for Chavez’s regime is the fact that the price of a common Venezuelan food basket is steadily increasing, by 1.6 percent in the last month and by over 20 percent in the last year.

Now, more than ever, Venezuela could use friends, but it seems the country’s losing them faster than its gaining them. Porfirio Lobo, the new and controversial President of Honduras, has announced he won’t let Venezuela meddle in the country’s internal affairs as Manuel Zelaya, his ousted predecessor, did. Chavez has been increasingly hostile to Colombia — its main trading partner. As a result, analysts project that trade between the two countries will be down 36 percent by the end of 2009. At the request of Colombia’s President, Alvaro Uribe, Dominican President Leonel Fernandez has offered to mediate between Venezuela and Colombia. According to Fernandez, the DR, “given its geographic position and friendly relations with its neighbors, has had other opportunities to mediate in regional conflicts and seek solutions to these differences.” Chavez should be hoping Fernandez is correct.

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