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ECPR –SGIR 7th Pan-European IR Conference Stockholm, September 9‐11, 2 Section: 41 ‐ Regional Powers in Latin America, Africa and Asia: Winners or Losers of the Financial Crisis? Thursday 4:15 - 6:00 pm, Room 29

BEYOND CONTINUITY: REGION, REGIONNESS AND REGIONALISM

IN LATIN AMERICA

-- Work in Progress --

Dr Pía Riggirozzi

Politics and International Relations University of Southampton

P.Riggirozzi@Southamptom.ac.uk

INTRODUCTION

The reconfiguration of Latin American regional governance is one of the major features

that characterizes the hemispheric political economy over the last half decade. Regional

governance is currently transiting a ‘garden of forking paths’, in the telling words of

Argentine writer Jorge Luis Borges, where different regional policies, regional identities

and regional forms of cooperation and competition are transforming the regional

cartography. Latin America today represents a conglomerate of commercial integration

projects, post-trade and political integration projects, and trans-societal welfarist projects,

reclaiming the principles of socialism. In this overlapping and sometimes conflicting

scenario the terms regional governance are being redefined as regional projects are faced

with substantially divergent visions of what Latin Americanness should mean and how

integration projects should respond to current challenges of global political economy.

The emergence of new regionalist projects in Latin America is something more than a

context-dependent, ad hoc reaction to the collapse of neoliberalism in Latin America.

Alternative post-trade governance projects, in particular ALBA and UNASUR, must be

seen as subregional responses to the US-led hemispheric leadership as much as a visible

manifestation of the emergence of new polities in which citizens, social movements,

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political parties, and leaders interact and construct new understandings of Latin America

in a (post-neoliberal) scenario. Analytically, this presents a challenge to New Regionalist

approaches that although usefully embraced issues beyond mainstream EU studies, in

particular the links between the regional, the international and the local, had assumed

regionalism as taking place within and modelled by neoliberal economics (Hettne 1999;

Fawcett and Hurrell 1995; Gamble and Payne 1996; Schulz, Söderbaum and Öjendal

2001; Phillips 2003). There is therefore a long way to go exploring regionalism beyond

the arena of consensus-building. How are we to understand regional agreements that are

grounded in different systems of rules that contest open regionalism and that are part of a

complex set of alternative ideas and motivations affecting polities and policies at

domestic and regional levels across developing countries?

This article is concerned with the extent to which alternative and autonomous regional

models, such as ALBA, and the resilient institutions embraced by UNASUR, are

ushering the construction of new regional political societies whose awareness,

consciousness and identity defy the established neoliberal rule. It is argued that to

understand the significance of contemporary Latin American regional order we need to

assess the socio-political and ideological character of post-trade and post-hegemonic

models of regional governance and the extent to which these articulate an identity that

may represent a specific region. It is also argued that while New Regionalist provides a

framework that identifies the 'what, how, who and why' in the emergence of specific

forms of regionalisms, it runs short to explain the extent to which new regionalist

projects can reconfigure broader links in terms of political and social community

grounded in post-neoliberal values. For this we propose to ‘rescue’ the notion of

regionness, outlined ironically by the New Regionalist literature but severely overlooked

in its intellectual production.

The motivation is simple. While we agree with a large literature that supports that a more

globalized world plays an extraordinary part explaining the emerging of market-led

regionalist projects, we recognize that there is still a major intellectual gap explaining

regionalism as a socio-political and ideological process. By analysing contrasting models

of governance currently taking shape in Latin America, the article hopes to fill this gap

re-evaluating regionalism and regionness in new policy spaces.

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The article is divided into four parts. The first part reconstructs the cartography of

current regionalism(s) in Latin America reviewing the trajectory of regional politics vis-

à-vis American leadership, and the emergence of alternative models grounded in

institutional and ideational underpinnings proposing post-trade, and post-hegemonic

regional polities. The second part assesses the empirical fit of New Regionalist

approaches in explaining the nature and implications of alternative models of

regionalism in Latin America. There is here and explicit claim for ‘rescuing’ the concept

of regionness to explain new geographical, social, political and cultural regional spaces

that are projecting alternative models of governance. The third part concentrates on the

two models of hemispheric reach, the Brazil-led UNASUR and Venezuelan-led ALBA,

to illustrate how Latin America is the expression of new overlapping and even

competing polities. The final part closes with a discussion about the extent to which

these models represent particular visions of Latin Americanness in the shaping post-

neoliberal regional governance.

CHANGING CONTOURS AND MOTIVATIONS IN LATIN AMERICAN

REGIONALISM

In essence, regionalism in Latin America dates as far back as the struggles for

independence and the birth of the nation-state as independent political entities in the 19th

century sharing a history of domination by foreign powers and a legacy of social and

organizational commonalities. A perceived sense of common legacy together with a

realpolitik calculus of cooperation against imperialist external rule, political and

economic, have been drivers of different regional arrangements and integration projects.

Whatever the motivations, regionalism in Latin America has been part of a region

building project that had mostly responded strategies of governance pursued by actors,

mainly states, directed to enhancing (some aspect of) their capabilities and/or powers. As

bluntly put by Myrdal (1968: 39) there are no mystical qualities in geographical

proximity that make neighbouring nations a unit in any real sense culturally, politically or

economically. This call for unity has been mainly conceived as an instrument to balance

external influences – in a broader sense, that is U.S. hegemony; EU economic

competitiveness; international capital and globalization demands. In other words, rather

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than a teleological destiny, regionalism in Latin America tended to be driven by

defensive than offensive reasons, setting Latin American countries as takers rather than

makers of global rules (Keohane 2001).

Historically, regionalism evolved as a complex process signified by actors in different

ways. Its articulation has not evolved in an even, linear way but practice adopted

different strategies. The uniqueness of Latin American political economy lies in the fact

that its search for economic development has been profoundly and indelibly shaped, from

the nineteenth century onwards, not only by local political and economic conflicts but

also by the need to offer national and regional responses to the steady assertion of US

global and regional hegemony. The inter-American relationship was patterned since the

end of the nineteenth century and throughout the first decades of the twentieth alongside

the consolidation of US power in the hemisphere. Since the Great Depression up until

current developments, the debate concerning political and economic governance in Latin

America was increasingly marked by an irreconcilable option between ‘free trade’ versus

‘protectionism’, mirroring politically a debate between ‘market’ versus the ‘state’. These

structural tensions defined what can be identified as three waves of regionalism in Latin

America. The first wave of regionalism, in the 1960s and 1970s, was patterned on the

European experience and attempted to build closed trading blocs favourable for

industrialization between countries with linguistic, cultural and geographic affinities.

This first wave of regionalism can be seen as a response to the creation of the European

Economic Community in 1957, and the access of former colonies to the EEC by means

of preferential agreements. The statement by the President of Uruguay in the early 1960s

illustrates the notion of defensive regionalism as he established that ‘the formation of the

European Common Market is a state of near-war against Latin American exports. To an

integration scheme we must respond with another integration’ (quoted in Mattli 1999:

140). The general idea of this defensive orientation was that economic integration would

improve the bargaining position and would able to bring the industrialization through

import substitution on a regional scale. The first relevant trade project of this kind took

shape in 1960 with the creation of the Latin American Free Trade Association (LAFTA,

or ALALC in Spanish). LAFTA was created, under the inspiration of the ECLAC, by

Mexico and six South American countries with the objective of eliminating all barriers to

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intraregional trade. At its centre was the notion of bounded sovereign states, largely able

to control the nature of regional commitments and to protect via subsidies and tariffs their

domestic producers from external competition (Chibber 2004; Lewis 2005). In this

context, economic nationalism framed a new way of thinking and speaking about politics,

economics, and culture; while regionalism became a generalized reaction to the liberal

rule. In Central America, a similar initiative gave birth to the Central American Common

Market joined by Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, which

set a more ambitious objective of creating a free trade area and to implement a common

external tariff. In 1969 a split from LAFTA led Bolivia, Colombia, Chile, Ecuador and

Peru to establish a more institutionally ambitious common market project, the Andean

Community, with an executive body with ‘supranational’ powers and mechanisms to

promote an equitable distribution of benefits. To complete the regional architecture a

Caribbean Free Trade Agreement (CARIFTA) was signed in 1967, to be superseded six

years later by the Caribbean Community (Bouzas and Knnack 2009). But political

instability, the general difficulties attendant on import-substitution across Latin America

in the 1960s and 1970s, and erratic economics led to a loss of faith in state-led growth

(Haggard and Kaufman 1992). Meanwhile demands for integration and incentives to

deepen regionalism decreased as intra-regional trade meanwhile reached a poor figure of

2.5 per cent while exchange with Europe increased (Mattli 1999: 145).

Closed regionalism was largely superseded by a second period of ‘open’ regionalism in

the 1990s, in reflection of the changing global and regional political economy and the

new geopolitics of the post-Cold War (Varynen 2003; Fawcett and Hurrell 1995),

although organisations from the first period, such as the Andean Community did not

disappear. The agenda of ‘new’ regionalism, as it was termed, was also dominated by

questions of trade and investment but rather than tariff protection it was underpinned,

politically and ideationally, by an acceptance of the ‘realities’ of the marked-led

globalisation. In this context, linking up with the US economy was seen as a way,

paradoxically, for state actors to re-assert some control over the direction of their

economies, an accommodation with the global market and US dominance (Grugel 1996;

Grugel and Hout 1999). Partly as a pragmatic program to regain access to international

financial flows, and partly as a result of a sense that there was little choice, the region

embraced almost submissively the Washington Consensus (Drake 2006). The US also

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provided debt relief through the Brady Plan while involved Latin American governments

in a discussion of the (new) rules for regional integration. This set the agenda of the

second wave of regionalism, the so-called ‘new’ regionalism, dominated by trade and

financial liberalization and underpinned, politically and ideationally, by an acceptance of

the perception of an ‘unavoidable reality’ of the market-led globalization (Fawcett and

Hurrell 1995; Payne 2000; Varynen 2003; Sørensen 2004). For the US, meanwhile, this

context opened a new opportunity towards a more ambitious US-led ‘Enterprise for the

Americas’, launched in 1990 by President G.W. Bush senior and designed to lead to a

Free Trade Area of the Americas (FTAA) with a deadline for its signature in 2005.

But this second wave integration was deeply shaken by the rising number of bilateral

trade deals with the US as difficulties with the hemispheric agenda emerged, alongside

the mobilisation of popular movements against it in Latin America by the end of the

1990s. It unravelled further at the turn of the millennium under pressure from a

combination of economic difficulties in much of Latin America, most profoundly in

Argentina, and the rise of leftist governments in Venezuela, followed by, in a more

moderate fashion, Argentina, Bolivia, Ecuador and Uruguay. The declining appeal of

‘open’ regionalism was closely linked, in short, with a more general loss of faith in

neoliberal economics and trust in US leadership.

The consequence has been the gradual emergence of a third wave of regional integration.

In addition to bringing the state back into development (Grugel and Riggirozzi 2007) and

the emergence of generally more nationalist models of political economy (Hershberg and

Rosen 2006; MacDonald and Ruckert 2009; Panizza 2009), new left governments in

Latin America have committed themselves to cooperation as a way of resisting US

power. The Fourth Summit of the Americas, for instance, took place on November 2005

in Argentina, precisely in a context of political and economic re-foundation, and

increasing crisis of (neoliberal) leadership in the region. In this context, the 2005 Summit

declaration grounded two opposing views: one favoring the proposed FTAA – mainly

supported by US, Mexico and Canada, and countries especially dependent on preferential

US trade agreements– and another dissenting group – including MERCOSUR countries,

Venezuela and Bolivia – which declared against a hemispheric trade agreement and

refused to commit to future FTAA talks. It soon became clear that the window of

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opportunity that opened for Washington to remake the hemisphere in its own making had

found clear limits.

The current wave of regionalism thus echoes the first to some extent, perhaps especially

in its composition, for only ‘Latin’ American countries are members, in marked

difference to the hemispheric region-building of the 1990s. Indeed, as detailed later in

this article, the Venezuela-led ALBA, grouping Cuba, Bolivia, Ecuador, Nicaragua,

Dominica, and Honduras, takes a particularly confrontational line in trying to challenge

the US with regard to almost all issues on the inter-American agenda (Saguier 2007).

Overall, advocates of third wave regionalism favour a socially-oriented trade block rather

than one based on market incentives, along with a Compensatory Fund for Structural

Convergence as a cornerstone to manage and distribute financial aid across Latin

America. The promises of ALBA have been accompanied by a region-wide set of

initiatives by Venezuela, including the purchase of Bolivia’s leading micro-credit

institution and a large share of the bonds issued by Argentina, as well as attempts to

inject a more nationalist tone into MERCOSUR discourse. Venezuela and Argentina

have also become strategic partners in the start-up of the Banco del Sur, which is meant

to finance regional development projects as an alternative to Washington-sponsored

financial institutions.

At the same time, Brazil and Venezuela are emerging as silent competitors for regional

leadership and political style, they are at the same time ushering consensus mechanisms

with new players capable of making that balance viable. Such policy direction is evident

in the efforts of the newly created UNASUR, signed under the auspices of Brazil in

March 2008. UNASUR brings together countries of resilient institutions such as the

Andean Community of Nations with those of MERCOSUR, with the promise of political

and economic cooperation and development.

Today the regional picture presents a complexity that challenges both the notion of

defensive regionalism and US-led regional governance. In a context where the very

pillars of neoliberalism - as a political and economic paradigm, as a model of market

democracy, as a sustainable and inclusive model of development– are critically

questioned by academics, politicians, social actors and practitioners and many other

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stakeholders, Latin America is reasserting new rules of regional engagement and

cooperation based on the reconfiguration of alliances and new motivations that, led by

new Left-leaning leaders, are redefining the contours of regional governance. As such,

the configuration of Latin American regionalist map can thus be defined as an overlap of

and sometimes competition between three main projects:

1- Projects with a strong emphasis on commercial integration as a transit to broader

multilateralism, with low socio-political content (i.e. the so-called Pacific Rim with

Mexico under NAFTA, Chile, Colombia and Peru in the Andean Community);

2- Projects that advance trade at its core, deepening linkages with neighbouring

countries, yet seeking alternative and autonomous trade and post-trade political

projects, even reaching out the region (i.e. Central American Common Market,

Caribbean Community (CARICOM), Southern Common Market (MERCOSUR),

Andean Community (CAN), Union of South American Nations (UNASUR); and

3- A model that more radically emphasizes political and social aspects of integration,

with new economic and welfare commitments, reclaiming the principles of socialism

in direct opposition to neoliberal globalization (such as the Venezuela-led Bolivarian

Alternative for the Americas (ALBA) grouping Cuba, Bolivia, Ecuador, Nicaragua,

Dominica, and Honduras.

What the current wave of regionalism represents, in sum, is a hybrid model, expressive

of an alternative continental strategy for growth and social justice, representative of a

more political and confident ‘Latin’ America, suspicious of US leadership yet still

largely in tune with the need for open markets. Despite its importance, there is as yet no

sustained analysis of the institutional and ideational underpinnings of new regional

agreements that are grounded in different systems of rules that contest open regionalism

of the 1990s and propose the construction of a new, post-trade, and post-hegemonic

regional polity.

RECONCEPTUALISING REGIONALISM IN NEW SCENARIOS

The changing political economy of Latin America, and the recent transformation of its

regional governance landscape, suggests a need to reflect upon the meaning of

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regionalism and its place within the global political economy. Essentially, the

discussions on regionalism and regional governance consolidated in the 1990s on the

bases of what was ‘new’ about an ‘open regionalism’ that contrasted the ‘old’ close

regionalism of the 1960s and 1970s (Gomez-Mera 2008). As older models of integration

were displaced, new theories, suggestively from within the field of International Political

Economy, portrayed new regionalism of the 1990s as concomitant transformations or

responses to an increasing globalized world.

The New Regionalist Approach sprang from broader concerns about the nature of

globalization and global order in the post-1989 world. For some globalization was

thought to undermine, possibly fatally, the autonomy and policy capacities of states in

favor of a regulated global polity (Gamble and Payne 1996); while for others there were

clear synergies between the shift to neoliberalism and the onset of new regionalism as

new regionalism was identified as a form of ‘meso-globalization’ or a mechanism

through which states could meet the pressures for economic competitiveness posed by

economic globalization and the spread of neoliberal policies in the 1990s (Phillips 2000:

286; 2003; Bresslin and Higgott 2000).

The study of ‘new’ regionalism focused on state-led cooperation; power and strategic

considerations economic incentives to market integration; formal mechanisms of

cooperation and institutionalization. This approach was later expanded to add a new turn

that privileged space, social actors, and the logic of networks and networking shaping

the process of regionalization (Hettne and Inotai 1994; Hurrell 1995; Bøas, Marchand

and Shaw 1999; 2005). There is, however, something of a paradox about the narrative

about the role of social actors within the study of regionalism. Although New

Regionalist approaches understood regionalism as multifaceted process, emphasising in

particular the role of non-state actors in the process of regionalization, the social and

political dimensions of regionalism were subsumed into an orthodox narrative of

regionalism as a passive response to a structure of (global) constraints and therefore

empirical patterns of political and social relations in the making of regionalism were

often brushed aside. This has been the case, despite few scholars, in particular Bøas,

Marchand and Shaw (1999; 2005), encouraged a research agenda that could shed light

on how transnational networks, echoing the work of Manuel Castells (1996) on

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‘network society’, operating on a regional scale inform and define regions, reinforcing

and complementing regionalizing tendencies.

The approach provided by Bøas, Marchand and Shaw certainly covers new grounds to

understand the impact of ideational factors such as non-state actors’ motivations, culture,

identity, shaping regionalism. However, this is a research agenda that is still unexplored,

especially in the analysis of regionalism beyond Europe. This is also an agenda that

echoes another concept outlined ironically, by the New Regionalist approach, the

concept of regionness. This concept was coined by Hettne and Söderbaum in the early

1990s, mainly inspired by the constructivist theory of nation-building as a cultural as

well as political community. According to Hettne and Söderbaum (2000: 461; also

Hettne 1993) ‘regionness defines the position of a particular region in terms of regional

cohesion, which can be seen as a long-term historical process, changing over time from

coercion, the building of empires and nations, to voluntary cooperation. In general terms

one can speak of five levels of regionness: a regional space, a translocal social system,

an international society, a regional community and a regionally institutionalised polity.’

As an analytical tool, regionness seeks to conceptualize the process whereby regions are

spaces as well as processes in ‘the making’. It denotes a holistic understanding of

regional politics as the construction and consolidation of regions and the formation of

relevant actors in a historical and multidimensional perspective. This is a critical element

that brings ‘the political’ back in, and helps to understand an important point that

explains regionalism as part and parcel of actors’ motivations, interests and coalitions at

the level of domestic politics. Regionalism as regionness alludes to the complex

structure of ideas, actors and institutions in the formation of a transnational society or

regional community within a regional polity. Yet, as previously claimed, regionness as a

socio-political and ideational aspect of regionalism has been largely overlooked.

There has been, however, a prolific scholarly focused on regionalization, as a process

that is led by actors beyond the state that operate in regional spaces created by dynamics

of cooperation and integration, often state-led, that gave rise to the formation of regional

networks seeking to deepen levels of cooperation, expand cooperation in other areas of

policy, or demand responsive and inclusive agendas at a regional scale. The interplay

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between regional integration and non-state actors in the study of regionalization brought

new insights to the study of regional governance in non-European contexts such as the

Southern African Development Community and Southeast Asia (Söderbaum and Shaw

2003) and Latin America ( Saguier 2007; Gomez-Mera 2009; Tussie and Trucco 2010).

There is in these studies a general assumption that regional integration alters the ways in

which policy is made, political structures are built and used, and individuals relate to

both each other and the various political and economic orders in which they live. There

is, however, an equal assumption that regionalism takes place within a fundamental and

ongoing reshaping of the world order, in which sovereign decisions and calculations are

modelled by neoliberal economics (Hettne and Söderbaum 2000). Consequently,

although this is an advance on the treatment of domestic determinants of regionalism

from the early literature on ‘old regionalism’ and in some over-structuralist analysis of

‘new regionalism’, the emphasis on identity building in the process of regionalism and

regionalization beyond the (meta)narrative of neoliberal politics is seriously

downplayed. As such, current manifestations of identity politics and regionness that fall

outside the literature on the EU, outside neoliberal politics and outside the hegemonic

influence of the US are still a fertile terrain. This claim becomes even more relevant as

the political and economic circumstances of the 1980s and 1990s don’t longer hold so

firmly. In short, while we fully accept that New Regionalist scholarship usefully

embraced several issues that have tended to stray outside the mainstream in EU studies,

such as the exploration of the links between the regional, the international and the local,

there is still a long way to go exploring the appeal of regionalism beyond the arena of

consensus-building, to understand regionalism as a political space for the construction of

transnational counter-hegemony. A pressing question is thus how are we to understand

regional agreements that are grounded in different systems of rules that contest open

regionalism and that are part of a complex set of alternative ideas and motivations

affecting polities and policies at domestic and regional levels across developing

countries?

As the empirical analysis in the next section suggests, since the early 2000s new

strategies of regional political action in Latin America have sought not only to maximize

economic bargaining positions, or coordinate multilateralism, but also to reclaim a polity

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that opposes to US hegemony and the established neoliberal rule. For a better

understanding of this context we suggest that current regionalism in Latin America can

be defined as an enduring idea of the region simultaneously as an embodiment of

identity politics, for social movements as well as for elites, which reflect a new cultural,

political and ideological domain. These dimensions capture the notion of ‘regionness’

that Hettne and Söderbaum (2000) outlined to explain the ways in which the ‘region’ is

collectively constructed as a geographical, social, political and cultural space over time.

The two models of hemispheric reach under the articulation of the Brazil-led UNASUR

and Venezuelan-led ALBA, will help us to illustrate how Latin America is no longer the

manifestation of a regional (Washington) consensus but the expression of new

overlapping and even competing polities in which citizens, social movements, political

parties, and leaders interact and construct new understandings of Latin Americanness.

REGION AND REGIONALISM: REFOCUSING EXPECTATIONS FOR THE

ENTIRE CONTINENT

The Latin America region is at a complex interface between sub-regions defined by

Mexico and Central America, the Caribbean, the Andean area and the Southern Cone.

These sub-regions at the same time embrace arrangements that play as tectonic plates

from a regional governance perspective. Mexico, the Caribbean and the Andean

community are harnessed in models of integration that have at the core free-trade

agreements with low socio-political. A second model that building from the expansion of

resilient regional agreements and institutions seek to deepen linkages with neighbouring

countries and other regions in the so-called ‘global south’ to build up new models of

autonomous trade and political relations. A third model, a more transformative in terms

of polity and ideology, is manifested in the ALBA, which emphasises primarily political

and social aspects of integration, with new economic and welfare commitments,

reclaiming the principles of socialism in direct opposition to neoliberal globalization.

This diversity and multiple references point at the absence of a single consensus, or what

Whitehead (2009: 46) called ‘meta-narrative’, ruling inter-American relations for the

whole hemisphere. The extent to which Latin America is transiting a positive road from

‘rule-taker’ to ‘rule-maker’ is still to be seen. What is certain is that crises are always an

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opportunity for ideological contestation and accommodation of political and economic

projects. Ideologically, the re-accommodation of actors and alliances in the ‘historical

backyard’ of the US suggests a new opportunity to reassert alternative ideas. In contrast

to the proverbial ‘There Is No Alternative (TINA)’, now promising alternatives not only

emerge as possible options but they chime with local demands for more responsive

political economies. Latin American region realigned its strategy to refocus on a more

nationalistic course for development and governance is already a significant change,

shaking the framework of regionalism as conceived by the ‘open regionalism’ that

prevailed during the 1990s. Although the idea of a unified counter-hegemony to supplant

neoliberalism in Latin America is clearly an overstatement, UNASUR and ALBA

embrace different regional projects that frame alternatives to the US-led neoliberal

revolution of the 1980s and 1990s.

UNASUR and ALBA crystallized in two models of regional governance: the former as

resilient regionalism, emerging from the adaptation of pre-existing ‘open regionalism’

aimed to strengthen the institutional structure based on Mercosur and CAN while seeking

open markets abroad and an autonomous position vis-à-vis the power of external

influences such as the US or the EU. The later, articulating a radical, ideologically

transformative project that extends Chavez’s 21st Century Socialism into a regional

integration scheme that based on oil diplomacy (and revenues) pursues, in direct

opposition to neoliberalism, a transnationalized welfarism.

Although contrasting in nature and scope, Brazilian and Venezuelan interest have

coincided in underwriting the influence and presence of the US in American

multilateralism. More radically, these initiatives show that in areas where US-leadership

has always been undisputable, security, development and finance, new regional leaders

are re-writing the rules of the game showing not only that the dominance of the US has

weakened but also that its backing is not needed. Furthermore, despite common

motivations, these initiatives are transiting different paths. UNASUR is fundamentally a

project that ranks from free trade areas to security alliance. Such direction brought

together the countries of the Andean Community of Nations with those of Mercosur to

develop strong commitments in mainly three areas: energy integration; physical

infrastructure - under the umbrella of UNASUR is the Initiative for the Integration of

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Regional Infrastructure in South America (IIRSA) which has already formulated an

ambitious project list to boost infrastructural integration throughout the continent (see

South Centre Bulletin 2007); and defense under the new South American Defense

Council. Its moderate ideological position compared to ALBA means that it also aims at

strengthening the representation and leverage of the South in international forums of

negotiation. As such, intra-regional negotiations are also echoed extra-regionally

extending to obtain a free trade area with the Andean Community and Central America,

as well as the Gulf Cooperation Council, the South African Customs Union and India

(Tussie 2010: 12).

Although immerse in a new imaginary of post-neoliberal politics, UNASUR as resilient

regionalism is a comprehensive project that encompasses several agendas that range from

a free trade area, open regionalism to a deeper political integration, pondering the

construction of new supranational and intergovernmental institutions as well as

reinforcing intra-regional trade agreements, primarily led by a serious drop in trade by

the early 2000s (see ECLAC 2010). Regional initiatives transcend the interventionist

capacity of the states as new bureaucracies, experts and economic groups are key

participants in the agenda setting and implementation of policies, particularly in the area

of trade and energy. Institutionally, the Constitutive Treaty of the UNASUR sets out

analogous institutions to the EU, that is, an Executive Council of Delegates as well as a

General Secretariat, a Council of Ministers of Foreign Affairs, and a Council of Heads of

State and Government. The Constitutive Treaty also provides for a Parliament that is yet

to be established. While these dimensions vindicate the tenets of the New Regionalist

literature it is important not to recognize of understating this regional arrangement as a

new perspective and new way to interact in the regional and global environments without

being ‘washed away by the powerful waves of globalization’ (Cooper and Heine 2009:

21)

---Table here: intra-exports and south-south (ECLAC statistic yearbook 2010) ----

While the extent to which UNASUR can reconfigure broader links in terms of political

and social community are questionable, what is certain is that it represents an alternative

and more fruitful geo-economic union institutionalizing bridges between CAN and

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Mercosur, and as a block with extra-regional emerging powers such as China, India, and

South Africa, particularly led by Brazil; renewing negotiations with the EU, and laying

the foundations for moving from trade negotiations to infrastructure and more politically

sensitive projects such as the South American Defense Council, which picked up steam

first in face of the conflict in Bolivia in 2008 and more currently in the wake of the crisis

involving Venezuela and Colombia; and the constitution of a South American

Parliament. These are important initiatives that restrict US interference in the South

balancing the authority of the existing US-led institutions such as the Organization of

American States (OAS).

Fuelling this process has been an increasing diffusion of ‘soft power’ by Brazil within

and outside the region. Brazil represents half of total South American GDP, and the

sixth-largest investor in the group of developing countries. Brazil has been actively

pursuing a policy of greater engagement, both economic and political, with its neighbors,

often using this platform to engage with other emerging powers and in international

forums. Brazil has played an increasingly important role in world trade negotiations and

in the efforts to bring the Doha round to a conclusion. It has actively promoted the reform

of multilateral financial institutions, led negotiations within the Group of 20; and actively

pursued, with the support of UNASUR countries, a permanent seat in the UN Security

Council for Brazil and other emerging powers such India, Germany and Japan. Brazil has

been a key player in discussions on a whole range of global issues, including nuclear

proliferation, the reduction of world poverty and disease (especially HIV/Aids),

intellectual-property rights and climate change; and hosted ‘global south’ summits with

BRICs (Brazil, Russia, India and China) and IBSA groups (India, Brazil and South

Africa) in 2010 (Bethell 2010). Ultimately, the construction of a region is conceived

internally as political coordination to regulate and mediate intra-regional politics and

externally to act as a block in international and multilateral arenas.

Ideologically UNASUR is more versatile and even contradictory project embracing

different discourses from different members. There is no one political, ideological

identity although there is a new ideological space in terms of fencing-off American pre-

eminence. The presence of Venezuela adds a nationalistic and more confrontational tone

while China’s robust economic expansion has lent a new financial and ideological space.

16

China’s double-digit growth for more than a quarter of a century which helped crisis

management and post-crisis recovery in Latin America in the early to mid-2000s. China

is emerging as the region's third largest trading partner. China's top five export markets in

Latin America were Brazil, Mexico, Panama, Chile and Argentina. China's top five

suppliers of imported commodities in Latin America were Brazil, Chile, Argentina,

Venezuela and Peru. According to ECLAC, between 2000 and 2004 Argentina’s sales to

China grew by 143.4 per cent, Brazil's by 79.9 per cent, Chile's, by 58.5 per cent, Peru's,

by 13.1 per cent and Mexico's, by 11.7 per cent. Chinese exports to Latin America

jumped by an annual rate of 42 per cent to US$ 21.668 billion, which was higher than the

growth rates for exports to the rest of the world (ibid). In 2007, trade between Latin

America and China totaled US$102.6 billion and it increased another 52 per cent in 2008

(ECLAC 2004: 184; 2010). China’s presence in the region is also increasing in the

energy sector, with heavy investment in Venezuelan, Bolivian, and Ecuadorian oil and

gas. Moreover, China recently joined the Inter-American Development Bank (IADB),

contributing US$350 million, paving the way for Chinese companies to take part in

infrastructure projects in the region. Currently, half of China's foreign investment goes to

Latin America – although the vast bulk was deposited in tax havens in the Caribbean

from where it can be sent back to China to take advantage of preferences given to foreign

investment firms. Most significant yet has been China’s unprecedented financial move by

which it agreed a 70 billion renminbi (US$10.25 billion) currency swap with Argentina.

Under such a framework, Argentine importers could use renminbi, instead of the US

dollar, to pay Chinese exporters. This is the largest financial deal between China and a

Latin American country and it thus has enormous economic and geopolitical implications

for the way emerging economies participate in the current international economy.

Furthermore, the monetary agreement between Argentina and China took place only 72

hours before the G-20 meeting in London in April 2009, in which, precisely, the core of

the debate was the redesign of the international monetary system, and a week after the

president of China’s Central Bank proposed replacing the US dollar with the creation of a

new international reserve currency, an initiative that at the regional level was echoed by

another agreement between Argentina and Brazil to ‘de-dollarize’ their commercial

exchange. China has also negotiated a US$12 billion development fund in Venezuela,

and lent Ecuador US$1 billion to build a hydroelectric plant.

17

The fluidity of the region in terms of polities and policies has also been transformed by

the presence of Chávez. Venezuela has been a key player engaging in a region-wide set

of initiatives and spreading its oil wealth throughout the continent. In recent years,

Chávez has actively taken the lead, exceeding the US in terms of under-writing debt and

offering strategic injections of capital to its neighbors. In addition to providing 200,000

barrels of oil a day (worth perhaps US$1.6 billion a year), new policies of aid for the

region have been announced, totaling some US$5.5 billion. One of the most significant

moves was the acquisition of a leading micro-credit institution in Bolivia, PRODEM,

which owns ninety-two branches across the country and has 250,000 clients. Venezuela

also bought a large share of the new bonds issued by Argentina – US$2.4 billion of

Argentina's debt in 2005 – that has cushioned the impact of the economic downturn and

at the same time forged new alliances based on a very different perception of the world

(The Economist 15/03/2007).

Chavez’s initiatives also seem to have launched a broader cross-regional interest in

creating a common energy policy. Acknowledging the current global issues and demand

for energy, various South American Presidents met in April 2007 at the first South

American Energy Summit to design an energy integration strategy for the region. To

meet their energy needs, the member countries at the summit agreed on various matters

to implement energy cooperation and integration in the region. For example, Venezuela

and Brazil launched a joint petrochemical plant, which is a clear step towards energy

cooperation and integration. Central to their integration plans the leaders discussed the

construction of the gas pipeline known as the Great Gas Pipeline of the South, and the

Trans-Caribbean Pipeline. With these pipelines Venezuela could supply the region with

its gas reserves, beginning with Brazil. Most strikingly, the pipeline is set to be built by

Petrosur, a new venture between Petroleos de Venezuela, Petrobras, and Enarsa,

respectively the Venezuelan, Brazilian, and Argentinean state-owned oil companies,

created in 2004. In this context, Argentina was one of the first countries to support

Venezuela’s application to the sub-regional bloc MERCOSUR a year later, and more

recently both countries became strategic partners in the start up project for the Banco del

Sur, which represents the basis for a more comprehensive reformation of regional

financial architecture so long dependent on the Washington-based institutions.

18

Venezuela in fact is an interesting player as it sits at the intersection of the more

moderate model of regional governance represented by UNASUR and the radical

‘socialist model of regionalism’, epitomized by the ALBA. While the incorporation of

Venezuela to MERCOSUR injected a more nationalist tone into its discourse, narratives

of fiscal conservatism run through its members resembling a type of ‘open-economy

nationalism’ that opposes autarchic models of the 1940s to 1960s, seeking to balance the

risk-adverse mindset of business elites with new social demands within domestic polities.

In contrast to established institutions, however, ALBA has taken a particularly

confrontational line in trying to challenge the US with regard to almost all issues on the

inter-American agenda. Chavez is, in fact, more interested in exporting the socialist

revolution locally, regionalising national politics. ALBA represents an unprecedented

attempt to foster a social agenda that is not based primarily on trade liberalization but

actually on welfare cooperation and solidarity, placing a distinctive emphasis on civil

society participatory practices in planning and administration (Harris and Azzi 2006).

The social agenda is critical to understand the differences between the two models of

governance in many dimensions: in terms of agency; in terms of ideology; and in terms

of region-making and regionness. While ALBA structured integration on the basis of

social solidarity and complementarities, in Mercosur and more generally in UNASUR,

what a ‘social agenda’ with regard to policy-making remains unclear. Despite

participation of civil society groups in discussions of frameworks for alternative

development and social reforms, there has been little progress in terms of how exactly a

new regional model based on rights, welfare and inclusion might take shape (Di Pietro

2003; Grugel 2008).

In the case of ALBA, in contrast, since its conception in 2004, it represented a new space

of collective action for social movements resisting the FTAA, and in particular the

Hemispheric Social Alliance. This hemispheric social articulation elaborated the

document ‘Alternatives for the Americas’ which serve as bases for the initial formulation

of ALBA (Saguier 2007; Serbin 2007). Progressively, ALBA developed a program for

the implementation of social and welfare projects for ALBA countries based on an

alternative model of development and accumulation that echoes the government socialist

view. State-owned oil and gas company, Petróleos de Venezuela (Pdvsa), became central

19

for the funding of social welfare programs. The promises of ALBA have been

accompanied by a region-wide set of initiatives by Venezuela, including the purchase of

Bolivia’s leading micro-credit institution and a large share of the bonds issued by

Argentina. Since 2004, Venezuela has been exchanging oil for the services of 30,000

Cuban doctors and teachers, and has developed social programs providing housing and

education in Nicaragua, Cuba and Honduras. Yet the more iconic program in terms of

formation of a regional consciousness and cohesiveness have been the literacy campaign

and the higher education programs which were institutionalised as a transnational

initiative in different ALBA countries. Likewise, the establishment of ALBA People’s

University became another important vehicle in the transmission of ideas, diffusion of

new ethics and practices, and the creation of a common linguistic and compelling meta-

narrative (Murh 2010). These programs are pillars for what Murh (2010: 50) identified as

‘transnational organized society’, and key drivers for the transition ‘from a community to

a union of nations and, ultimately, to something like a region state’.

In terms of its wider projection in the region, Venezuela and Argentina have also become

strategic partners in the start-up of the Banco del Sur in early 2008. The inauguration of

the first Latin American Banco del Sur is not only a reflection of the search for autonomy

in policy formulation and implementation but also in the institutionalization of an

alternative financial architecture in response to the new regional political and economic

trend. A major distinction from established international financial institutions, such as the

Inter-American Development Bank and the World Bank, is that the Banco del Sur will

not operate on the basis of conditional loans but intends to advance a more democratic

decision-making process for its operations. If it succeeds in terms of goals and

achievements, such an institution could play a significant role in regional monetary

policy and provide resources to secure sound balance of payments finance. This is not a

minor goal as ALBA is moving into the consolidation of the Unified System for Regional

Compensation (Sistema Unitario de Compensación Regional de Pagos, SUCRE), signed

in October 2009. The Sucre is a common monetary denomination for the payment of

commercial transactions between ALBA countries Transactions are carried out through

the Central Banks of each ALBA and supervised and regulated by the Regional Monetary

Council of the Sucre (BWP ). This is a financial instrument to help stimulate and deepen

trade, based on the principles of cooperation, solidarity and sovereignty. The extent to

20

which these initiatives can consolidate coherent and resilient projects is still to be seen.

Nevertheless, they need to be taken as part of valid transformative arrangements shaping

a new space for thinking and negotiating alternative models for political and social

cooperation.

REGIONALISM AND REGIONNESS: FINAL REMARKS

For much of the 1980s and 1990s, the standard prescriptions for development focused on

shrinking the state, or reducing the scope (and cost) of its activities. Theoretically,

arguments about conditions for economic development assumed an inevitable neoliberal

insertion into the world economy. This consensus underpinned Washington’s hegemony

which went unchallenged in inter-American relations at this time in a way that was

genuinely without precedent. The trend now however, is towards a form of post-

neoliberal governance that projects two regionalist models, a more moderate model that

nests in resilient institutions of the 1990s, epitomized by UNASUR; and a more radical

model of integration, ALBA, led by a transnationalization of the Venezuelan Socialist

state. What these models suggest is that to recognize the particularities of the societies

and their regional arrangements we need to be aware of the constraints they face but also

the alternative spaces they open.

Venezuela and Brazil have helped to promote a proliferation of new and viable sub-

regional mutilateralisms that are independent from the US, and US institutions,

leadership. The nature and scope of these schemes however vary as well as their level

and depth of transformation. What the previous analysis suggests is that while

UNASUR’s transformative capacity should be measured in terms of ‘institutionalization

of the alternative’ via the establishment of new formal institutions; ALBA’s

transformative capacity relates to its capacity to advance a trans-local social system or

regional society. UNASUR, for instance, is heading towards deeper inter-

governmentalism and potentially supranationality a la EU, replicating a more traditional

understanding of open regionalism yet one that not merely reacts to constraining global

forces (defensive regionalism) but rather stands as a pro-active actor seeking to redefine

its position as a platform to play global politics. As argued, this scheme builds from the

resilient regional institutions of the 1990s and seeks to expand markets and project

21

authority in the global arena. Regionalism in this case aims at reconfiguring institutions

and alignments to essentially enhance market access and political and strategic power of

the members in energy, infrastructure and defense, areas critical for the achievement of

autonomous development and for a repositioning of the actors in the international arena.

Here, Brazil has had a constructive role in the building up of the so-called global south,

especially active reaching out to Africa and Asia, in international forums and in new

groups such as IBSA and BRICs.

ALBA on the other hand represents a radical departure from previous experiences of

integration in Latin America. ALBA’s construction of the region is led by a political and

economic ideological strand that expands Venezuela’s socialist stateness to countries

within the continent’s border, pursuing what potentially can be identified as a regional

society. Theoretically, this is an interesting call that re-signifies the understudied concept

of regionalism as regionness creating a socially and socialist based space with countries

in Central America, South America and the Caribbean. In addition to infrastructure and

financial cooperation, ALBA pursues a regional society based on trans-nationalised

welfare programs to improve literacy, housing and health standards, and financial

arrangements that support local development in ALBA countries. This contrasts other

regionalist projects such as NAFTA, MERCOSUR, and UNASUR where the social

dimension is rather weak or absent.

The building of a regional community within ALBA is not simply rhetoric or symbolic

politics, as Tavares (2004: 5) claims, the constitutive content and the degree of internal

cohesion defining regionness is inherently linked with the construction of regional social

linkages (language, culture, ethnicity, common historical heritage), political linkages

(political institutions, ideology, regime types) and economic linkages (preferential trade

arrangements) that differentiate one group from others. These elements are explicitly and

purposely rooted in ALBA, in contrast to UNASUR, providing the former with a certain

degree of singularity, appealing to a historical-ideological heritage, a socially distinctive

base, and a common ideology that distinguish ALBA from the others producing and

reproducing a unique intra-state and inter-societal space. Institutions that foster

regionness in ALBA are not thought to reproduce and guarantee rules that could enhance

economic development and investment predictability, or to enhance the negotiation

22

position vis-à-vis international actors but rather to act as norm-diffusers, transmission-

belts, reproducing a grand anti-capitalist narrative.

Undeniably, the institutionalization of new projects is still far from stable. Diversity in

motives, ideologies and leadership aspirations are current challenges to the establishment

of truly consensual and embracing alternative (post-neoliberal) models of integration. At

the moment, Latin America is a continent of contradiction where a new generation of

political and social leaders seems ready to explore alternative approaches to organizing

economic and social relations. Understanding this transformation also demands a

reorientation of some of the prevalent ways in which the study of regionalism has been

approached so far. Although there are important differences in terms of how these

projects embrace regionalism and construct a sense of regionness, what unites most of

these countries is a real need to re-found the nation state, to re-embed socially-responsive

models of development and social justice, and to distance themselves from the US over a

number of key issues. The search for autonomous regional projects is not nesting within

the established global architecture, perspectives on regionalism thus need to readdress the

relationship between regionalism, integration and globalization, as well as the

transformative power of new forms of regionalism and regionness.

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