MERCOSUR: Toward Latin American Integration

By Juan Diego Nusa Peñalver:


JULY 31, 2012 will be recalled in the history of Latin America and the Caribbean as a landmark, a giant step, with Venezuela’s full entry into the Common Market of the South (MERCOSUR), in the first extension of this customs association in the 21 years of its existence.

It will also be recalled as a resounding failure of the imperial policy of the United States in relation to a region which it can no longer dominate at its whim.

For Argentine political economist Atilio A. Borón, from the geopolitical point of view, Venezuela’s inclusion in MERCOSUR after a six-year wait constitutes the greatest U.S. diplomatic defeat since the disastrous Free Trade Area of the Americas (FTAA).

Beatriz Miranda, columnist in the Colombian El Espectador, defines it as a strategic accomplishment, given that the new entrant concedes the bloc a greater economic and commercial weight.  Analysts consider that in geopolitical terms, Caracas’ arrival represents the possibility of increased Brazilian insertion in the Andes and Caribbean and Venezuelan access to the South Atlantic.  Thus MERCOSUR is facilitating strategic integration, giving the group an Amazonian, Atlantic, Caribbean and Andean identity, and a strong energy component.

Doubtless, this bold step will affect U.S. interests in the region in the long term, given that it prevents Venezuela from signing a free trade treaty with this country, still set on re-conquering the Bolivarian Republic’s oil wealth.

It is no secret that with Venezuela‘s energy potential – according to the Organization of Oil Producing Countries (OPEC) it has the largest certified oil reserves in the world: 297,570 million barrels – the industrial vigor of Brazil (the sixth largest world economy), and the agricultural potential of Argentina and Uruguay, this regional bloc will acquire a strategic role.  Created March 25, 1991 by the Treaty of Asunción, it promotes the free circulation of goods and services, common external tariffs and trade policy, as well as coordinated macroeconomic policies among member states and compatible legislation.

In effect, the United States was unable to prevent MERCOSUR, now including Brazil, Argentina, Uruguay and Venezuela (Paraguay’s membership is suspended due to the parliamentary coup d’état against President Fernando Lugo), from growing in strength and promoting sovereign economic and social policies in accordance with national interests, far removed from the dictates of the discredited financial institution of Bretton Woods and the anti-democratic Washington consensus.

The U.S. maneuver to utilize the Paraguayan oligarchy, entrenched in the country’s Senate, to block Venezuela’s entry backfired.  In fact Paraguay’s suspension and Venezuela’s participation could make MERCOSUR more attractive to Bolivia, Ecuador and other nations in the region.

From the Planalto Palace, headquarters of the Brazilian government, Venezuelan President Hugo Chávez emphasized the historic importance of the unity of Latin American countries in terms of promoting their independent development, within which MERCOSUR represents a platform for the changes needed.

"We are exactly in our historic position, our North is our South, we are where we always should have been, we are where Bolívar left it to us to arrive," the Bolivarian leader affirmed during the extraordinary session of the bloc in Brasilia.

What is being reconfigured is a balance which will allow South America to address, on more equal footing, other centers of power such as the United States and the European Union, which have demanded subordination and an anti-national submission to their transnationals.

BUILDING THE PATRIA GRANDE

According to analysts, Venezuela‘s incorporation into MERCOSUR makes the bloc the world’s fifth largest economic power, extending from Patagonia to the Caribbean over an area of close to 13 million square kilometers, linking more than 270 million inhabitants (70% of the population of South America) to form an impressive and gigantic bloc with the largest oil reserves, booming industrialization and excellent potential for food production.

It will have a Gross Domestic Product (GDP) of $3.3 trillion at current prices, equivalent to 83.2% of the Southern Cone GDP, and the largest global biodiversity and fresh water reserves, a reality very much to be borne in mind in terms of world geopolitics by the select club of the G-8 and emerging giants such as China and India, two nations which have a more constructive position in international economic relations.

In the internal context, Venezuelan José Gregorio Piña emphasizes that while, initially, the country was only offering MERCOSUR oil and hard currency, "the panorama has changed, given that it can develop its productive potential through a more complete relationship with bloc members, which includes complementary trade, a innovative financial architecture, internal regional investment and the free circulation of persons and jobs, among others."

Caracas has already invited MERCOSUR enterprises to participate in housing provision for the Venezuelan people, with a target of three million family units, as well as conjoint work with the state to promote other social, industrial and agricultural development projects.  The new Venezuela wishes to leave behind the private model to which it was subjected by the United States, the only legacy of which was enormous social inequality and widespread poverty.

This effort will benefit from the bloc’s creation of a Structural Convergence Fund to reduce imbalances among its members, in a necessary spirit of solidarity with the less developed nations.  "This is an experiment to reduce the imbalances of our countries and promote equitable regional development," stated Brazilian President Dilma Rousseff during the extraordinary summit.  She also noted that 40 regional projects have been approved, with an initial start-up fund of $1.1 trillion, good news further boosted by MERCOSUR’s announced expansion of credit to promote the economy of this part of the world.

PROTECTING MERCOSUR

Given the blows the United States delivered to progressive processes in Honduras and Paraguay, a reaction to Venezuela’s inclusion in MERCOSUR is also anticipated.  The country will use any possible means to prevent a united, prosperous and strong South America capable of defying its political hegemony and global economy.

This warning was given by Argentine President Cristina Fernández de Kirchner, who urged the member countries present at the summit "to create, sooner rather than later, the instruments and institutions which will make this new pole of power indestructible and indivisible."   The Argentine leader strongly attacked attempts by imperialist nations to weaken South America.

MERCOSUR is thus moving ahead to create the Patria Grande to which Latin American and Caribbean nations rightly aspire.

August 16, 2012

Granma.cu

What they want is Venezuela’s oil

Reflections of Fidel

(Taken from CubaDebate)

YESTERDAY I said what I would do if I were Venezuelan; I explained that it was the poor who were most affected by natural disasters and I gave the reasons why. Further on, I added: "…where imperialism dominates and the opportunistic oligarchy receives a lucrative slice of national goods and services, the masses have nothing to win or lose and don’t give a jot about the elections" and that, "in the United States, even for a presidential election, no more than 50% of those entitled to vote turn out."

Today I would add that, even when in those same elections the whole of the House of Representatives, part of the Senate and other significant posts are voted on, they do not manage to exceed that figure.

I asked why they employ their vast media resources to try and sink the Revolutionary Bolivarian government in a sea of lies and calumnies. What the yankis want is Venezuela’s oil.

We have all seen during this election period, a group of ignoble individuals who, in the company of mercenaries from the national written press, radio and television, have even denied the fact that there is press freedom in Venezuela.

The enemy has succeeded with some of its aims: preventing the Bolivarian government from winning the support of two thirds of the Parliament.

Perhaps the empire believes that it obtained a great victory.

I believe exactly the opposite: the results of September 26 represent a victory for the Bolivarian Revolution and its leader Hugo Chávez Frías.

In these parliamentary elections, the participation of the electors rose to the record figure of 66.45%. With its vast resources, the empire could not prevent the PSUV from obtaining 95 of the 165 seats in parliaments, with six results still to come in. The most important thing is the high number of young people, women and other combative and proven activists who have entered this institution.

The Bolivarian Revolution today holds executive power, has a majority in Parliament and a party capable of mobilizing millions of people who will fight for socialism.

In Venezuela, the United States can only rely on fragments of parties, cobbled together through their fear of the Revolution and gross material cravings.

They will not be able to resort to a coup d’état in Venezuela as they did with Allende in Chile and other countries in Our America.

The Armed Forces of that sister nation, educated in the spirit and example of the Liberator and which, in its heart, nurtured the leaders who began the process are the promoters of and part of the Revolution.

Such a group of forces is invincible. I would not be able to see that with such clarity without the experience I have accumulated over half a century.

Fidel Castro Ruz



September 27, 2010

3:24 a.m.

Translated by Granma International

granma.cu

Bahamas Blog International

Bolivarian Venezuela at the Crossroads, Part 1: Nationalization and Workers’ Control

By Eric Toussaint - CADTM:

The economic, social and political situation in Venezuela has changed a lot since the failure of the constitutional reform in December 2007, which acted as a warning to the Chávez government.  [1] This failure had the effect, however, of reviving the debate on the need to have a socialist perspective.  The debate revolves around several key questions: further nationalization, workers’ control, the place of the PSUV (United Socialist Party of Venezuela), and people’s participation.

On Sunday 15 February 2009, 54.36% of the country’s citizens voted ‘yes’ to the amendment to the Constitution that allows political representatives to stand for successive mandates without any time limit.  [2] Up to then the Constitution had only allowed two successive mandates; there had to be a break before the candidate could apply again.  [3] In 2013, at the end of his second mandate, Hugo Chávez will have the possibility to run again for president.  If he is re-elected, his mandate will end in January 2019.  This is why some Chavist activists are now concerned about what changes may occur by then that could consolidate the progress achieved since Chávez’s accession to power.

Nationalization and workers’ control: achievements and limitations

In April 2008, after 15,000 workers at the SIDOR steel plant, part of the Argentine group Techint, had been on strike for nearly two months, Hugo Chávez announced that the company was being nationalized.  The workers’ main demand was for 9,000 temporary contracts to be converted into unlimited duration contracts.  Given the employer’s refusal, nationalization was the best way for the government to guarantee that the workers’ demand was met — a decision workers perceived as a great victory.

SIDOR was founded as a State-owned company during the 1950s and then privatized and sold to foreign capital in 1997 under Rafael Caldera’s presidency.  The April 2008 re-nationalization takes on particular significance since this modern and efficient company is a production tool that Argentinian capital, and Techint in particular, wished to hold on to.

It should be noted that the Chavista government of the state in which SIDOR is located had ordered the police to repress the strike as soon as it started.  In addition, the minister of labour had done nothing to support workers’ demands.  As a consequence Hugo Chávez’ decision to nationalize the company and to remove the minister was perceived as a shift in the workers’ favour.  All the more so as, at about the same time, he announced an increase in interprofessional minimum wages and public sector salaries as well as the nationalization of the cement industry, which so far had been in the hands of three transnational corporaions (TNC) (Lafarge – France, Holcim – Switzerland, and Cemex – Mexico).

In the following months and during 2009 the government made further nationalizations in the food industry [4] (which affected both national capital – Lacteos Los Andes – and the grain TNC Cargill).  The government justified these nationalizations as being essential for improving the population’s food supply.  Finally the Bank of Venezuela, one of the largest private banks in the Santander group (one of the two leading banking groups in Spain) was also taken over by the State.

All these nationalizations, as well as those that had occurred earlier (in the electricity sector, telecommunications, the Orinoco oil fields, etc.), led to generous compensations for the former owners.   Venezuela uses part of its oil revenue to regain control of certain strategic sectors of the economy.  The main objective of such compensation is to avoid legal penalties for not abiding by bilateral treaties on investments signed by Venezuela.  International law makes it possible for States to nationalize companies provided they give reasonable compensation to owners.  Venezuela could proceed in a more radical way if it withdrew its signature from bilateral treaties on investments, left the ICSID (International Centre for the Settlement of Investment Disputes, the World Bank’s tribunal on investment issues), and secured its liquidities and other assets abroad so as to avoid seizure.  This of course would further increase the hostility of the establishment in industrialized countries and of the TNCs within the country (all the major transnational oil companies are present in Venezuela as well as General Motors, Mitsubishi, Daimler-Chrysler, etc.).

The rather cautious way chosen by the government did not prevent a company like ExxonMobil from trying to have 12 billion dollars belonging to PDVSA (Petróleos de Venezuela Sociedad Anónima) seized by Dutch and British courts in 2008.  This is one good reason for Venezuela to enter into an alliance with other countries of the South so as to repudiate bilateral treaties on investments that include clauses that could be detrimental to the nation’s interests, to withdraw from the ICSID and WTO, and to set up a multilateral body in the South to settle disputes – in other words, an ICSID that would be a Southern alternative to the World Bank’s ICSID, which serves the interests of large private TNCs.

In 2009, further nationalizations again raised the issue of workers’ control. Left-wing trade unions and workers’ collectives are in fact demanding the implementation of control mechanisms through which workers can control the boards of nationalized companies.  They want in this way to ensure that the original objectives of such nationalizations will be adhered to; they also want to prevent bad management, waste, embezzlement, corruption, and misuse of company assets by insisting on the opening of ledgers, transparent commercial and industrial strategies, and the periodic submission of balance sheets and accounts.  They rightly voice their distrust of many of the private executives who stayed on after nationalization, but also of some new executives who look after their personal interests rather than seek what is good for the community.  Achieving and indeed demanding control increases workers’ self-confidence and their capacity to collectively contribute to a socialistic kind of management and labour relations on the one hand, and, on the other, create a counter-weight within companies in the hands of private capital.

We see instances of workers occupying private companies and demanding their nationalization. Inevitably the issue of workers’ control will have to be raised again in the oil industry.  It first flared up during the oil lockout (December 2002 - January 2003), when workers, who wanted to resume production, had called an oil conference.  Later Hugo Chávez rejected the idea of workers’ control in this key industry because of its strategic importance, whereas of course it would be a good reason to go for it.  The same applies to the production and distribution of electricity, which were also nationalized.  Workers in this sector started demanding control in September 2009.  Electricity supply in Venezuela is critical since over 50% of its production [5] is ‘lost’ or diverted (meaning stolen) during distribution.  Losses are mainly due to the use of old equipment because before they were nationalized by the Chávez government, certain companies like Electricidad de Caracas (owned by AES, a U.S.-owned TNC) were almost systematically deprived of the necessary investments to buy new machines.  On the other hand, large private industrial companies steal and squander large quantities of energy.  There are also unauthorized electric hook-ups in residential areas but in the case of working class households, which are not big consumers, such piracy is limited. Workers in the electricity sector are in the best position to solve the issue of supply and to fight squandering and bad management by senior executives – and thus avoid power cuts. These are the arguments being developed by trade union leaders to demand workers’ control.  Ángel Navas, president of the Electricity Sector Workers’ Federation (FETRAELEC), told the media during a demonstration by some 3,000 workers in Caracas on 25 September 2009: “We the workers are in touch with users in the neighbourhoods.  We know how we can solve the crisis...  We have to change the bureaucratic structures and the structures of capitalist management into structures with a socialist vision. We must change production relations and do away with all this bureaucracy which is killing the company.” [6]

During the first half of 2009 Hugo Chávez stated at a public meeting with worker managers that he was favourable to a law on the election of managers of nationalized companies [7], but nothing has happened since then to put this commitment into practice.

This struggle for workers’ control of company management is essential.  Its outcome is decisive for the ongoing process in Venezuela.  [8]

Notes

[1] On 2 December 2007 51% of voters said ‘No’ to Chávez’ constitutional referendum as against 49% voting ‘Yes’.  This is Chávez’ only electoral setback between 1998 and 2009.  See Éric Toussaint, “The failure of 2 December 2007 can be a powerful lever for improving the process currently unfolding in Hugo Chávez’ Venezuela”, December 2007, http://www.cadtm.org/The-failure-of...

[2] It should be remembered that article 72 provides for the possibility of citizens recalling the President of the Republic and all other elected officials half-way through the term of office.

[3] The campaign depicting Hugo Chávez as a “despot for life” played on the scandalous nature of unlimited re-election. Yet several European democracies work in the same way. This is the case in Spain, Italy and the United Kingdom for the post of Prime Minister, and in Germany for the post of Chancellor (in all 4 countries, it is the head of government who really holds the reins of power). In France, up to the adoption in July 2008 of the constitutional law on the modernization of institutions, there was no limit on the number of consecutive mandates. Since then, the number of consecutive mandates is limited to two.

[4] http://voixdusud.blogspot.com/2009/

[5] We should also note, however, a very positive structural feature in Venezuela: electricity is very largely produced from dams and rivers. Fossil fuels are only rarely used and there are no nuclear power plants.

[6] See a very interesting video of the demonstration with interviews of several TU leaders on the Marea Socialista website: http://mareasocialista.com/

[7] This was the case on 21 May 2009 during a meeting between Hugo Chávez and 400 delegates from the steel and aluminium industries held in the State of Guayana. A meeting to consolidate other commitments made during this important assembly took place on 21 August 2009 in the context of the “Plan Guayana socialista”. See Marea socialista, no.22, p. 3.

[8] To know more about initiatives or position statements on workers’ control in Venezuela, read issues 19, 20, 21 and 22 of the magazine Marea Socialista, July-August 2009, which discuss the situation at SIDOR, CorpoElec, Cadafe, cement works, Cafeaca, Alcasa, Carbonorca…See http://mareasocialista.com/

Translated by Christine Pagnoulle and Judith Harris, in collaboration with Francesca Denley and Stephanie Jacquemont. Next part: Debate and contradiction in the PSUV (United Socialist Party of Venezuela) (Part 2).

Eric Toussaint, Doctor in Political Science (University of Liege and University of Paris VIII), is president of CADTM Belgium (Committee for the Abolition of Third World Debt, www.cadtm.org). He is the author of A diagnosis of emerging global crisis and alternatives, VAK, Mumbai, India, 2009, 139p; Bank of the South. An Alternative to the IMF-World Bank, VAK, Mumbai, India, 2007; The World Bank, A Critical Primer, Pluto Press, Between The Lines, David Philip, London-Toronto-Cape Town 2008; Your Money or Your Life, The Tyranny of Global Finance, Haymarket, Chicago, 2005.

Source: Committee for the Abolition of Third World Debt

Bolivarian Venezuela at a Crossroads, Part 2: Debate and Contradiction in the PSUV

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