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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
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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