Latin American integration

IT WILL, says Hugo Chávez (pictured), be “the most important political event to have occurred in our America in 100 years or more.” Well hardly. But the inaugural get-together of the Community of Latin American and Caribbean States, a 33-country outfit known as CELAC from its initials in Spanish, to be held in Caracas on December 2nd and 3rd, does reveal how Latin America is changing.

For a start the influence of the United States is declining in a region it once called its “backyard”. The new body includes all the countries of the Americas except the United States and Canada. Meanwhile, the Organisation of American States (OAS), which includes them, is in such disarray that it may not survive. Brazil, Venezuela and Republicans in the US Congress have all either withheld, or have threatened to cut, funding for the OAS, for differing reasons. The clout of Spain, once seen as a model by Latin America’s restored democracies, is also receding: only half the heads of state bothered to turn up last month at an Ibero-American summit, a Spanish-inspired annual event.

Yet, the proliferation of regional bodies does not necessarily mean that Latin America is any more united. The English-speaking Caribbean apart, it has three broad trade blocks. Brazil dominates Mercosur, a relatively protectionist trade group. Chile, Colombia, Mexico and Peru, all on the Pacific coast, are more open economies trying to forge closer ties. And then there is Mr Chávez’s Bolivarian Alliance for the Peoples of Our America (ALBA), an idea he launched ten years ago. Conceived as a political block, rather than a trade group, its aim was to free the region from the grip of the United States and “the tyranny of the dollar”. ALBA signed up Cuba, Bolivia, Nicaragua, Honduras, Ecuador and three tiny Caribbean nations (Dominica, St Vincent and Antigua). But Honduras withdrew in 2010 after its president was ousted in a coup.

According to the Venezuelan government, its trade with fellow ALBA members rose from just $1.6 billion in 2004 to $5.8 billion in 2010. Some of it is denominated in the sucre, a putative common currency. Nearly all this trade involves subsidised shipments of Venezuelan oil. ALBA has also signed up Syria and Iran as observers.

Other countries in the region either abhor ALBA, or tolerate it as an irrelevance. Even Cuba, which was uncomfortable about its dependence on Venezuelan aid even before Mr Chávez was diagnosed with cancer earlier this year, is now keen to diversify its economic ties. Brazil is financing a new port on the island.

For its part, Brazil has promoted the South American Union (UNASUR), which aims to develop cross-border infrastructure and defence co-operation. Tacitly, it is a vehicle for containing Mr Chávez. Seven South American countries, including Brazil and Argentina but not Chile, Colombia or Peru, are holding desultory talks about setting up a Bank of the South, another wheeze of Mr Chávez’s now supposed to open next year.

All this would seem to leave little room for CELAC. Its birth stemmed from Mexico’s desire to be included in regional talking-shops, and from a general symbolic yearning to create a club that includes Cuba as a full member. On paper CELAC will try to co-ordinate among trade blocks, such as Mercosur and the Andean Community (but UNASUR is also supposed to do that). It will also try to stimulate regional trade and speak with one voice in international forums. If only. The lesson of ALBA is that regional clubs based on political ideology rather than national interest do not get very far.