Here are this week's articles:
Latin American Integration: past and future
Venezuelan Oil Deals: poor nations worry about future
Argentine-Iranian Relations: a pact with the devil
Questions:
1) What countries/parts of the world should be given priority by Latin American leaders when looking for deeper political and economic ties?
2) Given the region's recent history, what Latin American country(ies) do you see as increasing their influence in the region during the coming decade?
Enjoy!!
With the rise of globalization, which promotes the function of economies on a global scale, I think it is important for Latin American political leaders to seek international ties to countries across the seas. In this, distance and location are primary factors in developing international relations. I think this is important because it helps to promote the spread of a great diversity of ideas across Latin America through Huntington’s theory of the Snowball Effect (the regional diffusion of ideologies).
ReplyDeleteI think President Kirchner’s actions (referenced in the article, Argentine-Iranian Relations: a pact with the devil?) are commendable in that they reverse the trend in Argentine politics to cover up the misfortunes of the nation (such as occurred during the Dirty War in which Argentine leaders concealed the disappearance of a significant number of its citizens). Additionally, I support the notion that the role of government includes the endeavor to “advance knowledge of the truth”. This plays into transparency as an element of democracy, and thus may suggest the health of democracy in Argentina. As the article relays, many Argentine-Jews may disagree, drawing a parallel between President Kirchner’s actions and The Crystal Night of Nazi Germany, but I think the president deserves credit at least for her questioning of Iranian actions, and for her desire to uncover the truth of the matter (perhaps in order to take further action to minimize such events in the future). I think their disappointment shows, in part, inflated expectations of Presidential authority.
Although I do agree that Latin America would benefit in attracting economic/political partners in other continents. I would definitely question Argentinas insistence in creating ties in the Middle East in particular Iran. The simple fact that Iran has an active nuclear program would make me cautious in creating any type of relationship with them for fear of nuclear proliferation.
DeleteFurthermore I think upsetting the only democracy (Israel) in that region by collaborating with Iran, is a very questionable move especially if they are trying to sustain a healthy Democracy.
Also I think that a terrorist attack most likely caused by Hezbollah on your on soil is more than enough reason for any LA country to turn their focus on a different state in terms of potential trading/political partners.
I agree with you that Argentina may very well be making a deal with the devil in that they are choosing to cooperate with Iran, who has denied any part in the AMIA bombings, in order to somehow get to the bottom of what actually happened. In doing so the Argentinian government is running the risk of ostracizing the large Jewish population that lives in Argentina as well as the United States who gives more foreign aid to Israel than any other country in the world. However, I do not see how Sergio Widder can accuse Iran of having no respect for human rights without taking into account the numerous human rights violations that Israel has committed against Palestinian civilians.
DeleteLike some of the comments posted, I am suspicious of Argentina's decision to collaborate with Iran on this case. I find it odd that Argentina would suddenly change its stance on this issue and offer no more of an explanation than posting some tweets about finding the truth. To me, it seems like there has to be some political and economic incentives for Argentina as the end of the article suggested.
DeleteIn regards to the first question, I do not think it is smart for Argentina to focus on building ties with countries like Iran, Cuba and Venezuela, politically or economically. As the article on Venezuela discussed, Venezuela's economy is in bad shape and Iran is facing many sanctions because of its nuclear arms program. Politically, I do not think its smart to alienate the Jewish community which Argentina has previously built a strong relationship with and ally itself with a country like Iran that is often seen as a symbol of authoritarianism and terrorism.
Personally, I believe Argentina's decision to trade with Iran makes perfect sense. While I certainly agree that it might not be the most ethical decision, from a strictly economic standpoint, it couldn't be more right. I liken this scenario to that of pollution. When the first-world nations were developing, their levels of pollution were astonishingly high, as their focus was entirely on industrialization (with little regard to the environmental effects of their actions). In the present day, this continues to occur - countries such as China, India, and many others have astronomically high rates of pollution, mostly as a result of burning cheap and dirty fuel (such as coal). Though developed nations see this as a negative occurrence, at the same time, they accept it as a natural byproduct of the process of industrial development (one which they, themselves, created in their own pursuit of growth). I see Argentina - a wealthy but still developing economy - as being faced with a similar set of choices. As their economy develops, they do not have the luxury of picking trading partners based on political preferences. They must first get dirty (trade with less than ideal partners), for only once they have reached the level of the other economic powerhouses of the world, can they strive to become more clean (choose trade partners based on non-economic factors).
DeleteIn response to Latin American Integration I say "it's about damn time" (even if they have been around for a couple decades now)! For Latin America to be able to compete in the international arena, per se, bilateral integrations and solidarity among states must be at the forefront of ALL of Latin America. Not only can institutions like the Inter-American Development Bank, Central American Bank, MERCOSUR, and the Latin American Free Trade Association help break the long established history of dependence on foreign and non-regional nations but it can also lead to greater economic strength in negotiations with them (as seen in the first article). Economic integration along with regional political integration need to be addressed aggressively. One step in the right direction is the breakdown of the OAS, a US "manipulated" international body that continues to cripple Latin American states. On the other hand, institutions like the Latin American Integration Association are steps "en una buena dirección!" The Latin American Parliament also shows great promise.
ReplyDeleteThere is however challenges. First, who will lead the integration process (all fingers point to Brazil) and will they have power in the UN Security Council. Second, will there be a LA Economic Zone like in the EU, or is that even possible? Third, who will manage corruption (like that discussed in the article in relation to Venezuela)?
Latin America in the recent decades has been has been a booming economy and has dealt with political and military corruption better than ever. They still need to focus on their economic development, education, infrastructure and political corruption/equality like they have been attacking for the last 20 years. Specifically, countries like Argentina, Venezuela, and Brazil are leading by example in Latin America, and are exponentially increasing awareness around the world. With the possibility of Chavez passing away very soon, the oil of Venezuela could be extracted and sold at its full economic potential instead of Chavez holding back. Brazil, is hosting the World Cup and the Olympics in the next few years and is increasing economic growth in recent years. From these articles, the political corruption and instability of Argentina is seeing to be diminished after attempts to solve the car bombing mysteries of Argentina in 1994 at AMIA.
ReplyDeleteThese are only a few examples on how Latin America, specifically Brazil, Venezuela, and Argentina, are becoming more powerful and leading economic growth and political equality not only in Latin America, but in the world.
In the most recent edition of The Economist, not only did they publish the article Past and Future, a macro-level analysis of Latin America, they also provided a micro-level perspective on Peru. Latin America’s significant role in the international economy can not only be demonstrated by the focus given to it by The Economist but is seemingly obvious as the current global economic crisis is built around debt surpluses, stagnant economies, and economic bubbles ; all of which Latin American countries have been dealing with since the 1970’s. Latin American states on a broad level seem to have a found a solution to their problems as many of the states are exemplifying economic growth, ie Peru. Despite this economic growth in the face of seemingly unsolvable problems, only two EU leaders went to Santiago to meet with the Latin American leaders and discuss economic linkages- I, personally find this unbelievable and extremely disappointing.
ReplyDeleteThe article discusses that the main potential item of business during the meetings was trade talks between the EU and Mercosur. I believe that trade agreements between these two entities is essential, as many EU countries are very significant trade partners with Latin American countries, ie Italy and Argentina. Although an EU-Mercosur agreement is absolutely critical, I think that the real problem of the article is the fact that there isn’t more unity throughout Latin America. The presence of the Pacific Alliance and the alternative Mercosur Alliance creates a conflict that wouldn’t exist if it was possible to create a single alliance based on regulations and standards that unified Latin American countries and prioritized them above their EU counterparts.
Although an increase in the amount of and fairness of trade agreements is needed, the underlying problem faced by many Latin American countries is state economies that are heavily dependent on a few primary commodities. As we have spoken about in class, economies that are dependent on a few primary commodities are extremely vulnerable to the volatility of the market and this vulnerability can lead to an array of issues (ie. Inflation) that ultimately create unstable economies.
Another issue discussed in the article that cannot be ignored is the fact that leadership CELAC has been passed to Raúl Castro, this is obviously not a good image to be given to an organization aiming at free-trade agreements.
The question regarding which parts of the world Latin America should focus on when looking to develop political and economic ties has many fascinating dimensions that are worth analyzing. Historically, the quick solution to this question would be to work closer with Western Europe. Western Europe in the past 20 years has been an economic stronghold with little political instability. However, recently Western Europe's stereotypes have eroded. Greece, Portugla, Spain, and Italy are now completely debt ridden and not economically sound. Latin American would face quite the risk doing business with these countries that seem to be in spiralling black holes. Furthermore, based on the Latin American Integration article, much of Western Europe doesn't even seem interested in furthering relations with Latin America. I think it is a big red flag that only Merkel and Rajoy showed up and the biennial EU summit in Santiago.
ReplyDeleteI think it is in Latin America's best interest to focus on developing relations with countries that can economically benefit them, specifically in Asia. The first country on that list is China. The Latin American countries that have worked with China have experienced a lot of success, for example Uruguay (http://www.chinadaily.com.cn/cndy/2013-02/04/content_16197229.htm). Also, as discussed in class, China is less focused on having a political influence and more focused on doing what is best for their economy. Fearing China would spread their communist influence would be over-dramatic.
South Korea is also a country worth looking into for Latin America. South Korea has an emerging economy that is politically stable (http://www.chinadaily.com.cn/cndy/2013-02/04/content_16197229.htm). They also have a high GDP, which can mean more buying power.
By looking into powerful economies in Asia, I believe that Latin America and Asia could both benefit. This would strengthen political relationships while also help both economies at stake.
Historically speaking, Latin America has been deeply entwined with the United States and Western Europe, facing a mounting dependence on investments and loans to fuel their infant industries and commercial growth. Not to mention the perpetuated influence that former colonizers left five hundred years ago. However, now that much of Latin America stands in a better position regarding debt compared the US, Greece, Portugal, and Italy (as mentioned above), I agree that LA should move forward in establishing stronger economic ties with China. By prioritizing these new relationships over the exhausted connections with the “West,” LA can significantly benefit economically. In the recent years, most LA countries have gained traction and developed a sturdier foothold in the international political economy, giving the governments more muscle in attracting more reliable capitalists from countries that aren’t hovering over a debt-to-GDP ratio of 90.
DeleteAs previously mentioned by Lizzy, Latin America should make it a priority to construct deeper economic and political ties with China. Latin America is home to an abundance of natural resources that could sustain a growing superpower like China. In the last few years, China has become the "largest export destination for Brazil, Chile, and Peru and second largest for Argentina, Costa Rica and Cuba"1. Sure, having China investing like it has been also promotes questionable practices, but it also gives Latin America the base it needs. Its necessary for the time being, and until Latin America has peaked, China should remain a close economic and political ally, especially when China needs Latin America's natural resources.
Delete1. http://www.fairobserver.com/360theme/china-comes-latin-america
When it comes to economic ties with large emerging economies such as China, Latin American countries could certainly benefit, especially when you consider that these countries will make up the majority of world GDP growth (and growth in consumption) for the foreseeable future, and will make up 60% of world GDP by 2030. However, there is no reason why this should require weaker economic ties with the United States and Europe. Latin American countries can and should pursue many different economic partnerships simultaniously.
DeleteI would draw a distinction between simple economic ties--which are beneficial whether they be with the developed or the developing world--and economic policy as a political tool. For example: Venezuela's discounted oil sales to other left-leaning governments in the region, and it's close ties to sanctioned countries such as Iran, are intended primarily to counter U.S. foreign policy, and aren't necessarily pursued for their economic benefits.
http://www.oecd.org/dev/perspectivesonglobaldevelopment/economydevelopingcountriessettoaccountfornearly60ofworldgdpby2030accordingtonewestimates.htm
http://evankoehn3.blogspot.com/
ReplyDeleteVenezuelan Regional Economic Influence
The current health condition of Venezuelan president Hugo Chavez has been a conflict of interest for many countries in the Latin American region. While Chavez has been out of the country, being treated for cancer in Cuba, there has been doubt as to whether he will remain President or if the Chavista government regime will come to end. This worries many Latin American countries who are dependent on Venezuelan oil supplies, particularly the Caribbean. These countries are apart of an alliance, supported by Hugo Chavez, called Petrocaribe. Petrocaribe was founded in 2005 and allows “oil-rich Venezuela to sell oil to poorer countries in the region” at a lower price than the commodities market. If the Chavista regime comes to an end, Petrocaribe is likely to come to an end and the economic future of the poorer countries is further compromised.
Venezuela has their own economic issues as well and there are arguments that they should end Petrocaribe and focus more on the economic issues at the homefront. Critics believe that Chavez is using Petrocaribe as a way to “buy” political support rather than investing the money lost into the economy. We should care about this issue because it is an example of clientelism and how common corruption and bribery is in Latin American governments.
In this case, from a realist’s perspective, buying political support is not necessarily a bad thing because it creates a balance of power through external balancing. It reduces conflict and instability and builds power by allying with other states. The best way to become powerful through external balancing is to ally with the more powerful nations, so when looking for deeper economic ties Latin American political leaders should look for deeper economic ties with nations like the U.S. or China.
In the case for the Caribbean, they are worried about losing economic ties with Venezuela because of their dependency on natural resources. This goes to show the tremendous influence Venezuela has on the region, but in the coming decade it will be interesting to see if their influence will increase or decline, especially with the uncertainty of Hugo Chavez’s current health condition. Other economically influential Latin American countries include Brazil, Chile and Argentina.
My recommendation for policy makers in Venezuela is to end Petrocaribe and focus on lowering their debt and improving their economy. They have already built a good relationship with these countries for 8 years now with Petrocaribe and the purpose for putting an end to it is not to screw over their neighbors. When your own country is in trouble it isn’t smart to be focusing on helping your neighbors.
Citation: http://www.bbc.co.uk/news/business-21081458
In this week Economist, there is a story on Argentina and Iran relations. The new pact between the two countries is aimed at addressing the 1994 car bomb attack at AMIA. The article also mentions that despite strict sanctions against Iran, Argentina has continued to export goods, and is now one of the biggest exporters to Iran. In my view there are inherent conflicts in most Latin American countries between asserting their independence and showing the world that they will make their own decisions, without the influence of the major world powers, and doing what is in their long-term economic future. Argentina's decision to cooperate with Iran, especially when the world has embraced tough sanctions against Iran is fantastic! They are taking advantage of a situation and as a result have become a major exporter to Iran, something that will only help the Argentinean economy. But what will this accomplish in the long run? One thing we know is that the current Iranian situation is unlikely to continue to stay on its current path. Perhaps a war is inevitable, but I do not know. What is known is that by supporting Iran when the rest of the world has condoned them is only burning bridges. Lets say a war with Iran did happen, and now Argentina has lost its major exporter. How willing will other nations be to expand trade to make up the difference to a nation that supported their enemy and made sanctions less effective? As of now, Argentina is a pretty big player in Latin America, and has been trying to assert their power more. However, in order to remain a big player, Argentina needs to maintain a growing economy, which means that they need to play nice with the rest of the world. Pissing them off might show the world that Argentina is not a puppet, but where is that going to get them in the future? They need to maintain good relations, just look at Brazil. They have built a large economy, largely in part to trade throughout the world, particularly the US.
ReplyDeleteQuite frankly I find the article about the new Argentinian and Iranian relations to be a bit disturbing. As the U.S. and South America try and improve/increase economic relations and Argentina has a close relationship with Iran this could be a huge roadblock. As countries outside the Western World become more powerful the world seems to be splitting into two sides. Should this happen and the countries with the primary amount of petroleum engage in unfavorable trade conditions with the Western World this could lead to an energy crisis and potentially war. The U.S. should try and undermine all Iranian influence the Western Hemisphere. As resources continue to dwindle the U.S. must try and maintain positive relations with all countries that can supply energy and supplies in the future.
ReplyDeleteWhen looking for deeper and political economic ties, I am not sure if it makes sense for a country like Argentina to upset an important western power like Israel. I think it is foolish and dishonest to ask Iran to help find out the truth about what was obviously an Iranian attack. Although it says they are still searching for the facts, I know plenty of other information that says Iranian terrorist organizations were indeed responsible for this attack. While it may make sense economically to alienate Israel and some other Western countries in order to gain the support of some other Latin American countries, I believe it will hurt Argentina in the long run if they continue to act in this manner. Israel has the support of plenty of Western powers, and I do not believe it will be in Argentina's long term interests to act in this way, especially when it comes to forming political ties with powerful western nations.
ReplyDeleteVenezuela’s President, Hugo Chavez, has been absent for several months now due to health complications. He is receiving medical care in Cuba, for some unknown condition, and refuses to step down from the Presidency despite his extended absence. Firstly, I find this lack of transparency disturbing. Even more disturbing to me, though, is that the President is in Cuba receiving treatment rather than in his home country. The largely universal Venezuelan health care system has rapidly declined over the past two decades; thousands of doctors have left the country, hospitals are overflowing and underfunded, and preventative healthcare is virtually non-existent (Los Angeles Times). Although it is another discussion entirely, as someone passionate about health care, I can only hope that this will indicate the need for improvement to Chavez and his party.
ReplyDeleteThough they may not be rich in doctors, Venezuela is rich in oil, and is a generous provider to the region. Chavez is a proponent of “economic solidarity”, as noted by BBC, and so provides affordable oil to his neighbors, even if it means accepting truckloads of rice for payment. I appreciate that BBC included this concept of economic solidarity, which is largely unknown/misunderstood in the US. It is rooted in sustainability, mutualism and cooperation (ussen.org). During hurricane Katrina, Chavez offered millions of dollars in aid and support, as well as oil to the US (USAToday). President George W. Bush declined his offer, preferring to remain at his Texas ranch to do…nothing. Politics and capitalism interrupt the way in which resources could be used equally and sparingly amongst populations. I support what Petrocaribe does for impoverished and isolated island nations that deserve equal access to oil. Chavez may engage in clientelism, but ultimately he is providing to those in need.
Venezuela is highly reliant on personalism with Chavez as their figurehead (Cupery Lecture). If he dies soon, Venezuela likely risks political instability, which affects millions who rely on Venezuelan oil. However, I feel that even if Chavez were to die, his policies would live on through his political trustees—nothing would change. However, Charles Shapiro predicts an impending economic crisis in Venezuela as well (BBC). Chavez’s death followed closely by economic crash could send the country into a tailspin.
Latin America shouldn’t be so concerned with its EU, or US, relations because both have proven to maintain little interest in the welfare of many LA countries, other than for its own capitalist gain. I find it disappointing and discouraging that most EU leaders didn’t bother to attend the biennial CELAC summit in Chile. On the other hand, the Pacific Alliance is free-trading with the EU and is rapidly growing (The Economist). Rapid growth, though, often foreshadows rapid decline. LA should seek more stable, less politically impassioned nations to help them grow. The Eastern world is on the rise; LA should look to China as a trade partner and growing influence. China largely keeps its politics at home, so to speak, and is more interested in developing their economy (Cupery Lecture). I think this will give China a leg-up economically, and inspire other countries to do the same.
In regard to the article about Argentine-Iranian relations, it is interesting that the Argentinian government has opted to alienate not only Israel but the large Jewish contingent living in Argentina. As per the article, Argentina has the seventh highest Jewish population in the world, and the formation of this joint effort to provide the "truth" about the 1994 bombings, with Iran of all places - a country which denies the Holocaust and vehemently opposes the existence of Israel in the first place - smacks of defiance to the rest of the world. Furthermore, the fact that the Argentinian prosecutors assigned to the case and Interpol (aside from Israel and Jewish advocacy groups) have stated that there is clear evidence the attack was perpetrated by Iran, makes it unclear, aside from economic reasons, why Argentina is electing to do this in the first place. While Israel's actions against their immediate neighbors have not necessarily been innocent (I'm thinking specifically of the plan to build settlements with the express intent of blocking the Palestinian state), they are still a powerful country, and they have the support of most of the Western world, most notably the United States.
ReplyDeleteIt is a questionable strategy for Argentina to align with a state that most of the Western world has either placed sanctions on or refuses to interact with. Iran has a lot to gain from this relationship with Argentina - exports to Iran have risen from $319 million to $1.09 billion - but it is harder to see what Argentina takes out of this. Increased trade between Iran may be well and good, as they have a huge need for energy, but it is at the expense of better relations with the rest of the world. Argentina could possibly be exploiting a favorable opportunity, but one wonders what the repercussions of that might be.
Is this enough, coupled with the recent incidents (the nationalization, the impoundment of the freighter in Ghana) to alter their economic relations with the rest of the world? I think for the most part the answer is no – Argentina’s economy remains robust, enjoying strong growth rates over the past decade, and they still are important trade partners for many European and North American countries. I think however that if they continue to go down this road, conflicts may start to arise. I remember reading an article in the economist last fall about how the citizens in Buenos Aires had taken to the streets, banging pots and pans to signify their discontentment with Cristina Fernández, and how the outlook might change with the presidential elections in 2015.
The possible relinquishment of power from Hugo Chavez will produce effects throughout Latin America. Through BBC, Pablo Uchoa documents the trading in commodities between the Caribbean and Bolivia with Venezuela. Venezuela, with its wealth of oil sells petroleum at below market rates to countries like the Dominican Republic, Cuba, and Nicaragua in return for manufactured goods. Examples include exchanges in the form of raw goods like sugar and coffee. Nicaragua chose to pay its trade dividend with 19,000 pairs of pants. A wealth in pants aside, these countries rely on Chavez to continue this subsidization of oil. If this were to discontinue, as political opponent Henrique Capriles has hinted as a possibility, oil receiving countries would be forced to pay off existing debt and will be subject to volatile foreign oil markets.
ReplyDeleteThe dependence that has formed throughout the region on Venezuela is a clear indicator of the country’s rising economic and political influence. While this power is generated primarily by a wealth of oil deposits, it places Venezuela’s current political concerns in an international light. Opponents of Chavez selling of oil at below market rates argue that this has created economic dependency. Additionally, the current oil infrastructure is seen as in a state of disrepair. Decreased producer surplus leads to fewer funds that can be applied to maintaining drills, refineries, etc. As an international political actor, the act of creating dependency is necessary in appropriating allies. Surrounding countries are already scrambling to respect the continuing governance of Chavez, “the Alba and Petrocaribe nations issued a statement expressing their "full and absolute solidarity" with Mr. Chavez and urging "respect" for the Supreme Court ruling that postponed his inauguration to an undefined date.” Eventually, there will be a transition of power in Venezuela. Surrounding countries are correct in realizing their dependence. By giving oil at $100 a barrel and receiving raw materials, there is an obvious imbalance of trade. In order to mitigate this problem in the long term, surrounding countries must pursue a more sustainable approach to Venezuela’s rising power.
I don't find it very surprising that Argentina has begun to break ties with western powers. Historically most of Latin America hasn't trusted the west for often good reason. The war in the Falkands was only in recently in 1982 and I apologize for making an assumption, but would seem to likely be a sore point in Argentinian national pride.
ReplyDeleteCurrently the world is seeing the power of western states begin to erode, examples would be the United States dept crisis and EU near collapse. With these signs of weakness its not surprising to see disgruntled countries begin to draw lines in the sand and test western powers. Additionally the United States and Europe have begun to import less, and as Latin America becomes more industrialized it will need markets to sustain it's growth. Iran is an easy market to exploit due to the sanctions against it. This move could also be a reaction to the growth of the Pacific Alliance, and seen as necessary to ensure Argentina's political power in it's own hemisphere.
Basically countries with oil such as Venezuela and Chile are going to increase in influence and power in the region. Argentina I'm not so sure about, but potentially. It'll really come down to how they respond to the new talks with the EU and the deal with Iran. Although I personally don't see Iran being detrimental to the Argentina except for reactions from the west and how they'll treat Argentina after that. I really see Brazil as the continuos rising star of Latin America and don't see that changing. Essentially they would have to be sanctioned by the whole world and unable to export any goods for them to worry.
Countries of Latin America should focus on making strong economic and political ties with the E.U. and Europe as a whole. Current trade-blockades, such as the blockade lead by Argentina and Brazil since the 1990’s, prevents Latin American countries from being competitive on the global scale. The Argentinean president, Cristina Fernandez, worries that if Argentine markets were open to Europe, they would then be crushed by the competition. Despite this risk, opening markets also provide an opportunity to make a large profit. With current exchange rates, Latin American countries would be able to provide Europe with goods at lower prices than other countries within Europe. Latin American countries have the ability to specialize in goods, which European would not be able to, due to differences in climate and geography. Argentina’s relationship with Iran is a good example of the possibilities that come with open trade. As Iran’s seventh-biggest exporter, Argentina supply’s the country with corn, soybeans, and wheat. Over the past five years, Argentina’s exports have risen from $319million to $1.08billion. If a similar model is used with the countries of Europe, Argentina and the rest of Latin America, have the potential to significantly increase their exports.
ReplyDeleteCountries such as Panama, Peru, and Chile should focus their attention on European markets. Their economies are growing at some of the fastest rates in Latin America, and therefore would have a higher chance of success in a new market. It would not be as wise for countries of lower growth rates to focus their attention on the competitive European markets, but rather to gain strength within Latin America before expanding. Latin America has had a lot of political and economic turmoil in its recent history. With the rise of democracy in the region, it would be beneficial to increase economic ties with the already powerful democracies of the world. Global economic success is only possible if trade occurs on a global scale.
It would be wise of the United States to pay attention to shifts in the economic ties of Latin America. As China has become a major competitor to the United States in the field of exports, Latin America also has the potential to do so. If trade between Latin America and Europe were to increase, this would take away from some of the trade that the United States already has with Europe. This may decrease some exports from the United States, but on the other hand, The United States may benefit from Latin American economic success by strengthen our own ties within the region.
references:
"Latin American Integration; Past and Future." The Economist. The Economist Newspaper, 2 Feb. 2013. Web. 06 Feb. 2013. .
"Argentine-Iranian Relations; A Pact with the Devil?" The Economist. The Economist Newspaper, 29 Jan. 2013. Web. 07 Feb. 2013. .
These articles all seem to show how international economic ties in Latin America have all been very one sided. As was discussed in class, Latin America is an area of the world that has not always been in charge or in control of itself. There was a lot of U.S. intervention when we were trying to create a sphere of influence, and then when we took on a “good neighbor” policy there was a lot of manipulation, such as with the debts being taken over by the U.S. Before that much of Europe owned Latin America and ruled over it. These articles highlight the skepticism of many Latin American countries to make international political and economic ties. This is seen in the article from The Economist titled, Latin American Integration: Past and Future, which showed that Brazil and Argentina were cautious about entering into trade agreements with the EU for fear of “unfair competition from Europe” (Economist). I think that Latin American countries, especially the more influential ones, will need to create strong international ties, but not until they can get control of their own economies and always being careful of those countries that would simply take advantage of them.
ReplyDeleteOn the other hand, making regional ties and increasing their influence in Latin America seems very likely to be the next goal of many Latin American countries. Brazil is one of the front runners in doing this, leading the trade bloc in Latin America called Mercosur. Venezuela seems to also be very influential in the region, but that may change very soon. If Chavez does not come back from his treatments or is unable to be president for some reason, there could be an upset of power as many of Chavez’s understudies are not as widely admired as Chavez. Not to mention, the influence of Venezuela through their oil supply to poorer countries in the area is hurting them and their economy. They are not even making enough money to repair their oil production facilities, in which explosions are very likely to occur with old facilities. Argentina also seems to be a leader in the area as well, heading the discussions on Mercosur alongside Brazil. However, given Argentina’s past instability and current Iran relations discussions, they need to be careful to keep moving forward without upsetting the balance of politics and the economy.
While many Latin American countries are improving and moving ahead in terms of their economy and democratization, I feel that they must move forward with caution and be weary, but not dismiss, foreign aid and intervention. A few countries in the region are poised to be the leaders of Latin America, but they must be aware of the role they have and lead by example so as not to inspire rebellion from an economic or political crisis, as was seen in the mid-20th century. Latin America has a long way to go, but they are treading along slow and steady(ish).
Theoretically, the main goal of a country/state/nation is the well being of its citizens. In order for this to happen, such of country must be as self sufficient as possible, meaning, produce all or most basic necessities, services and luxuries in order not to depend on other nations; maintain good relations with the rest of the world, meaning, respecting rights and equity. This being said, alliances among countries need to be based on a win-win situation.
ReplyDeleteConsidering that Venezuela has the world’s largest proven oil reserves, and has enjoy the biggest oil bonanza in the last 15 years ($1 trillion) under the Chavez regime, the country has, nevertheless, little to show for in economic growth, infrastructure, industry development or diversification, health, public safety, and food self sufficiency. However, Chavez regime seems to have invested well in the Latino American region and the Caribbean. The Petrocaribe oil alliance is clearly not a profitable economic investment for Venezuela but it has had a great return in political support at the OAS and the UN. The same could be said about the ALBA (Bolivarian Alliance for the Americas), MERCOSUR, and CELAC. In other words, Venezuela has utilized oil as a gift/extortion tool that guarantees loyalties and unconditional supports, and ultimately power. Even though this might sound as a win-win situation the outcome has not favored Venezuela but Chavez and his leftist Bolivarian Revolutions, as well as member of his politburo.
Venezuela nowadays is not producing anything but oil, accounting for over 90% of its income. According to the IMF, it has one of the lowest growths in GDP in the region; by OPEC measures, Venezuela has been outperformed by all members but Libya. Venezuelan’s basic needs are being imported or exchanged through alliances such as Petrocaribe. This goes completely against the goal of assuring the well being of its citizens, and as it can already be seen, the country is leading to a economic and political collapse.
Venezuela it's a country with many natural resources and the capacity to be completely self-sufficient. However, at its current pace, the country it is just loosing more and more opportunities to grow and develop as its neighbors countries: Brazil, Colombia and Peru. By giving away its main resource, oil, is making the country on itself a time bomb ready to detonate at anytime. Consequently, I believe Venezuela influence in the region will decrease as its oil production has (1998 -3.2 M to 2011- 2.2M barrels), the death of its populist president, Hugo Chavez, and the uncertainty for the years to come.
In regards to the BBC News article "Venezuela oil deals: Poor nations worry about future".
ReplyDeleteI found this article to be very interesting due to the potential lose-lose situation that Venezuela as well as the poorer Latin American countries who are involved with Petrocaribe may find themselves in. In my opinion, this is a very tricky situation for Venezuela because on one hand, Venezuela's participation in Petrocaribe might in fact be the result of an ulterior motive for Chavez to gain political support and as a result, negatively affecting the Venezuelan economy but on the other hand, Petrocaribe is significantly helping Venezuela's poorer neighbors and is allowing them to stay away from the highly volatile commodities market. Now it should be obvious that Venezuela needs to break away from Petrocaribe but what would that mean for future relations with these fellow Latin American countries? It is hard to make Venezuela look like the bad guy in this situation because they should first and foremost look out for what is in their best interest but these poorer countries find themselves struggling to offer more than the primary commodities that dominate their economy. This relates to one of the past articles we had that talked about what Latin America needs to do in order to continue their economic surge and one of the things was for countries to be less reliant on their primary goods that create the foundation of their economy. Therefore, maybe in the end, the destruction of Petrocaribe will allow Venezuela to rack up the money that could be coming to them rather than raw materials that they could produce domestically as well as force these poorer countries to find other ways to feed their economy.