FEBRUARY/MARCH 2006
Latin America
and Asia are at last breaking free of Washington's grip
The US-dominated world order is being challenged by a new
spirit of independence in the global south
By Noam Chomsky
Wednesday March 15 2006
The Guardian
The prospect that Europe and Asia might move towards
greater independence has troubled US planners since the
second world war. The concerns have only risen as the
"tripolar order" - Europe, North America and
Asia - has continued to evolve.
Every day Latin America, too, is becoming more
independent. Now Asia and the Americas are strengthening
their ties while the reigning superpower, the odd man
out, consumes itself in misadventures in the Middle East.
Regional integration in Asia and Latin America is a
crucial and increasingly important issue that, from
Washington's perspective, betokens a defiant world gone
out of control. Energy, of course, remains a defining
factor - the object of contention - everywhere.
China, unlike Europe, refuses to be intimidated by
Washington, a primary reason for the fear of China by US
planners, which presents a dilemma: steps toward
confrontation are inhibited by US corporate reliance on
China as an export platform and growing market, as well
as by China's financial reserves - reported to be
approaching Japan's in scale.
In January, Saudi Arabia's King Abdullah visited Beijing,
which is expected to lead to a Sino-Saudi memorandum of
understanding calling for "increased cooperation and
investment between the two countries in oil, natural gas
and investment", the Wall Street Journal reports.
Already much of Iran's oil goes to China, and China is
providing Iran with weapons that both states presumably
regard as deterrent to US designs. India also has
options. India may choose to be a US client, or it may
prefer to join the more independent Asian bloc that is
taking shape, with ever more ties to Middle East oil
producers. Siddharth Varadarjan, the deputy editor of the
Hindu, observes that "if the 21st century is to be
an 'Asian century,' Asia's passivity in the energy sector
has to end".
The key is India-China cooperation. In January, an
agreement signed in Beijing "cleared the way for
India and China to collaborate not only in technology but
also in hydrocarbon exploration and production, a
partnership that could eventually alter fundamental
equations in the world's oil and natural gas
sector", Varadarjan points out.
An additional step, already being contemplated, is an
Asian oil market trading in euros. The impact on the
international financial system and the balance of global
power could be significant. It should be no surprise that
President Bush paid a recent visit to try to keep India
in the fold, offering nuclear cooperation and other
inducements as a lure.
Meanwhile, in Latin America left-centre governments
prevail from Venezuela to Argentina. The indigenous
populations have become much more active and influential,
particularly in Bolivia and Ecuador, where they either
want oil and gas to be domestically controlled or, in
some cases, oppose production altogether.
Many indigenous people apparently do not see any reason
why their lives, societies and cultures should be
disrupted or destroyed so that New Yorkers can sit in
their SUVs in traffic gridlock.
Venezuela, the leading oil exporter in the hemisphere,
has forged probably the closest relations with China of
any Latin American country, and is planning to sell
increasing amounts of oil to China as part of its effort
to reduce dependence on the openly hostile US government.
Venezuela has joined Mercosur, the South American customs
union - a move described by Nestor Kirchner, the
Argentinian president, as "a milestone" in the
development of this trading bloc, and welcomed as a
"new chapter in our integration" by Luiz Inacio
Lula da Silva, the Brazilian president.
Venezuela, apart from supplying Argentina with fuel oil,
bought almost a third of Argentinian debt issued in 2005,
one element of a region-wide effort to free the countries
from the controls of the IMF after two decades of
disastrous conformity to the rules imposed by the
US-dominated international financial institutions.
Steps toward Southern Cone [the southern states of South
America] integration advanced further in December with
the election in Bolivia of Evo Morales, the country's
first indigenous president. Morales moved quickly to
reach a series of energy accords with Venezuela. The
Financial Times reported that these "are expected to
underpin forthcoming radical reforms to Bolivia's economy
and energy sector" with its huge gas reserves,
second only to Venezuela's in South America.
Cuba-Venezuela relations are becoming ever closer, each
relying on its comparative advantage. Venezuela is
providing low-cost oil, while in return Cuba organises
literacy and health programmes, sending thousands of
highly skilled professionals, teachers and doctors, who
work in the poorest and most neglected areas, as they do
elsewhere in the third world.
Cuban medical assistance is also being welcomed
elsewhere. One of the most horrendous tragedies of recent
years was the earthquake in Pakistan last October.
Besides the huge death toll, unknown numbers of survivors
have to face brutal winter weather with little shelter,
food or medical assistance.
"Cuba has provided the largest contingent of doctors
and paramedics to Pakistan," paying all the costs
(perhaps with Venezuelan funding), writes John Cherian in
India's Frontline magazine, citing Dawn, a leading
Pakistan daily.
President Pervez Musharraf of Pakistan expressed his
"deep gratitude" to Fidel Castro for the
"spirit and compassion" of the Cuban medical
teams - reported to comprise more than 1,000 trained
personnel, 44% of them women, who remained to work in
remote mountain villages, "living in tents in
freezing weather and in an alien culture", after
western aid teams had been withdrawn.
Growing popular movements, primarily in the south but
with increasing participation in the rich industrial
countries, are serving as the bases for many of these
developments towards more independence and concern for
the needs of the great majority of the population.
© Noam Chomsky
· Noam Chomsky, the author, most recently, of
Imperial Ambitions: Conversations on the Post-9/11 World,
is a professor of linguistics at the Massachusetts
Institute of Technology
www.chomsky.info
Copyright Guardian Newspapers Limited
India-Brazil-South Africa: The Southern Trade Powerhouse Makes its Debut
- New
alliance of regional giants slowly gains strength
- India,
Brazil, and South Africa (IBSA) spearheads
south-south co-operation
- IBSA
presses issues of poor nations’ development
in WTO and UN debates
- Economic
cooperation remains the largest challenge
- Only
another elite debating society?
In
the face of mounting pressures to develop an alternative
option to globalization—one that emerges from a
developing world perspective and prioritizes egalitarian
advancement, technological cooperation, and an end to
global marginalization of the poor nations—there has
been a new push to redefine political and economic
arrangements springing from Bretton Woods. One component
of these many recent initiatives is the idea of
south-south cooperation. This southern perspective, while
not a new concept, has by no means even been partially
realized.
The fostering of transatlantic links between South Africa
and Latin America began in the post apartheid period with
the creation of the Zone of Peace and Cooperation in the
South Atlantic (ZPCSA) in 1986, and recently, steps have
been taken to vitalize this incipient southern alliance.
The foundation for this was set when the leaders of three
regional goliaths, India’s Vajpayee, Brazil’s
Lula, and South Africa’s Mbeki spearheaded a new
approach to south-south cooperation at the 2003 UN
General Assembly Forum, resulting in a trilateral
India-Brazil-South Africa agreement.
These countries have initiated a dialogue based on mutual
enrichment for the developing world, and are increasingly
prioritizing the entrance of developing countries into
the competitive world market through loosening their
bonds with the U.S. and other rich nations, while forging
stronger ties amongst themselves. Yet, IBSA is still
merely an infant body that has yet to even fully tally up
its objectives. Although, politically it boasts the
outline of a bold international stance, IBSA’s
future viability relies on its reaching beyond moral and
symbolic congruencies to enter into bold trade and
technological cooperation ventures among themselves and
other developing societies.
Conceptualizing IBSA
A trilateral agreement seems like a logical step for
countries that are preparing to go beyond merely
committing themselves to amplifying their emotional,
political and historical relations. South Africa and
Brazil had shared similar histories of racial tension,
inherent inequality, and abnormally high Gini indexes
(Brazil is currently sitting at 59.7 [2004 est.] and
South Africa at 59.3 [1995 est.], based on a scale from 1
to 100, with 100 marking the most economically unequal
society). South African and Indian relations date back at
least to Mahatma Ghandi’s work for the rights of
indentured Indian laborers sent to South Africa a century
ago, India’s support of South Africa’s long
struggle against apartheid, and the development of the
Indian National Congress, with its important solidarity
links to the African National Congress (the dominant
South African party today). Furthermore, an existing
bilateral preferential trade agreement between the South
African Community (SACU) and South America’s
MERCOSUR (which is now being expanded to encompass
liaison connections between India and MERCOSUR), along
with a strong legacy of trade between South Africa and
India, make for an increasingly important partnership.
IBSA as a Political Cause
The initial purpose of IBSA was to create a loose
alliance that could present a cohesive voice at the
bargaining sessions anticipated for the Doha Rounds, and
which would exert pressure on the rich nations in order
to achieve common positions in UN Security Council
deliberations. IBSA has further amplified its presence in
an annual dialogue involving the foreign ministers of
India, Brazil, and South Africa to discuss the
development issues and the possibility of joint
approaches in dealing with the Eight Millennium
Development Goals, which the IBSA members actively
support.
The foreign ministers of India, Brazil, and South Africa
attended the first IBSA Dialogue Forum, held in New Delhi
on March 4 and 5 of 2004. Issues addressed included
social development, disarmament, infrastructure, health
care, sustainable economic development, and poverty
alleviation. The ministers supported the integration of
bilateral preferential trade agreements among the three
members into one trilateral agreement, stressing the goal
of mobilizing multilateral processes in the globalizing
world that could be seen as sympathetic to the south.
The second IBSA Dialogue Forum, held in Cape Town on
March 10 to 11 of 2005, reaffirmed the issues presented
in the first dialogue and focused on IBSA’s
potential influence on the global political and economic
scene. At Cape Town, the ministers discussed the need for
UN reform, equitable WTO treatment of developing nations,
south-south political cooperation, development, and
economic integration. Environmental issues such as
sustainable development and mobilizing an integrated
response to issues such as climate change were revisited,
as were geopolitical factors such as the
non-proliferation of weapons of mass destruction and
terrorism. Poverty alleviation also remained of great
concern for the ministers, who pledged to donate modest
contributions to the IBSA development fund to support
projects aimed at improving living standards. And while
the financial heft of this fund remains relatively
inconsequential, its symbolic meaning, following the
trend of IBSA itself, is quite substantial. The third
meeting was scheduled for this month, and its outcome
will hopefully give a clearer indication of the
organization’s future path.
Since its inception in 2003, IBSA has progressed from a
loose partnership constructed mainly to address political
issues in macro terms, to a functioning alliance that
seeks to discuss and resolve specific worldwide questions
prevalent among developing countries. These include the
growth of democracy, disarmament, environmental
sustainability, and maritime ties that have emerged as
some of the principle agenda items for discussion among
the three nations. Garth le Pere, Director of the
Institute for Global Dialogue, and Lyal White, Latin
American researcher at the South African Institute for
International Affairs (SAIIA), claim that the
“common challenges of poverty alleviation, economic
development and social equity” hold the coalition
together. In fact, soon after its inception, IBSA
partnered with the UNDP to develop a trust fund to
financially back the goal of worldwide poverty
alleviation. Meanwhile, we are witnessing the slow but
very important institutionalization of that body.
IBSA’s three members are universally seen as being
the principle powers in their respective parts of the
world and are, therefore, in a position to comprehend
their weaker neighbors’ needs in current trade
deliberations. Although IBSA’s goals are similar to
those of organizations like the G20 and G77, it has the
potential to act more effectively, as decisions will be
debated among three countries, rather than twenty, or
even seventy. In an interview with COHA, Derek Moyo,
Deputy Chief of Mission at South Africa’s Washington
DC embassy, stressed that IBSA is a much more efficient
body than larger forums, and may have a greater
capability to impact the UN Security Council by playing a
balancing role against that body’s five permanent
members—the U.S., China, France, the Russian
Federation, and the U.K.
Barriers to a Single Market
IBSA, as a unifying factor in the international
community, has performed well in the political arena,
effectively negotiating at various trade summits.
However, the trilateral agreement has yet to achieve
critical mass in the institutionalization process. While
IBSA possesses substantial symbolic heft, more concrete
achievements must be made in its future. Although India,
Brazil, and South Africa share bilateral trade agreements
amongst themselves, binding trilateral free trade
arrangements between the countries are not an option at
the present time because of previously signed
multinational agreements involving their neighboring
nations. Organizations such as SACU and MERCOSUR prohibit
individual members from forming a free trade agreement
with any outside nation without extending the newly
expanded free trade area and its benefits to other
existing members.
Existing restrictions on imports and tariffs are quite
high; for example, Brazil imposes a flat 60 percent tax
on all manufactured imports. Additionally, Argentina, a
MERCOSUR partner, is apprehensive of South Africa’s
wine industry flooding the South American market. In
Moyo’s opinion, opening up trade within IBSA would
be beneficial overall, but would require a long and
intricate process of targeted negotiations to reassure
the security of existing business interests within each
nation. If, in the future, the IBSA countries decide to
create a broadened free trade agreement, it may come to
fruition in the form of a multilateral SACU, MERCOSUR,
and ASEAN agreement. According to the SAIIA, IBSA
encompasses a total population of 1.3 billion people and
an economy of $1.26 trillion. The above numbers would be
only a fraction of the potential combined population and
economy that would come into existence if current
regional blocs were incorporated into one gigantic
grouping. However, at this time, the foundations for such
a move are shaky at best, and it appears unlikely that a
larger south-south alliance will be permitted to emerge
at this point.
Impediments to Bloc Building
There have been no trilateral free, or even preferential,
trade ties among the three members. In fact, South
Africa’s trade with Brazil comprises only 2 percent
of its total foreign trade. One research institute from
each country—the SAIIA, the Indian Consumer Unity
and Trust Society (CUTS), and the Brazilian Institute for
International Trade—have been entrusted with the
responsibility of conducting research and compiling
reports for their upcoming summit addressing the benefits
and repercussions associated with openly linking the
members’ economies into a single market. This
project has included a survey of public and private
sector responses to a possible trade pact. Some claim
that there is a lack of communication between public and
private sectors with respect to IBSA’s ability to
significantly affect the current markets. Moyo explains
that, when discussing a trade arrangement, there are
always certain sectors that will protest relaxed trade
barriers for self-serving reasons. For IBSA to expand
into complex trade relationships, business sectors
located in the three countries will have to be prepared
to cooperate with each other in creating rationalized
trade arrangements that could prove mutually beneficial.
Furthermore, South Africa significantly trails the other
two countries in exports, especially those relating to
value-added commodities. In fact, export flows from
MERCOSUR to South Africa are five times larger than the
reverse, and, specifically with Brazil, South
Africa’s trade is at a disadvantage of one to four.
Although South Africa’s per capita income tops
India’s and Brazil’s, its economy is less than
one-third the size of other two. Additionally, South
Africa’s total trade at $70 billion is around $60
billion less than either India’s or Brazil’s.
Moreover, South Africa faces other trade disadvantages
with both of its partners, from an economic as well as an
efficiency standpoint. However, Moyo claims that opening
the borders of the three countries will help South Africa
to catch up in its manufacturing sector. He acknowledges
that “their export packages have more manufactured
goods than ours...and ours is still predominantly made of
minerals...[but] it is that dynamic that we want to
change...because it’s companies that do business,
not governments.” Some international business
specialists maintain that South Africa has the greatest
potential to benefit from the export of its agricultural
products, auto parts, and chemicals. But as of yet,
IBSA’s economic components have been built on
existing bilateral agreements some at the encouragement
of the three countries’ business sectors, which have
met such integration prospects with enthusiasm.
Current Initiatives
While a preferential trade pact in the near future is
still far from certain, IBSA nevertheless has made
strides elsewhere. In the tourism industry, many are
seeing the idea of IBSA’s existence as providing a
compelling opportunity and a strong selling point.
According to Nalini Gupta, head of the South African
Airlines (SAA) branch in India, regional airlines are
looking into tri-destination travel packages, and SAA is
already expanding its flights among the three nations.
At the beginning of March, IBSA agreed to forge
cooperation in the agricultural sectors and technology.
The Indian daily, New Kerala,
states that the two-day trilateral discussions held last
month produced an agreement to work collectively on
agricultural issues such as “germplasm exchange and
enhancement; research and technology including plant
breeding for sustainable food production; nutritional and
environmental security; use of frontier technologies for
livestock and poultry health management, and breeding
quality improvement; efficient management of natural
resources; technology transfer-capacity and competence
building; fish augmentation of productivity and value
addition through processing and small farm mechanization
and agro processing tools and techniques.” At the
meeting, a draft of an official agricultural cooperative
agreement was circulated and will be voted upon by the
three governments in this month’s annual IBSA
summit.
Agriculture has always been a sore subject for developing countries, mainly because of Washington’s insistence on maintaining its federal subsidy program. Developing countries have suffered an estimated $100 billion in annual loses due to limited sales resulting from the developed countries’ agriculture subsidy programs. IBSA has helped to lead the fight against such inequalities, taking strong stances over the issue at WTO meetings. In negotiations last October, the U.S. for the first time, agreed to consider lowering its agricultural subsidies after years of pushing the EU to lower theirs. At an IBSA colloquium on October 2005, Satyabrata Pal, India’s High Commissioner to the organization, expressed IBSA’s potential ability to influence the path of the Doha Round. He claimed that “we were able to make [a] common cause in the Doha Round of WTO talks, and that made it impossible for the EU and U.S. to force on the developing world a deal cobbled together between them.” IBSA, along with the G4 (comprising India, Brazil, South Africa, and China) and the G20, has been instrumental in an effort to develop a “middle ground” on trade negotiations. And it seems to be determined to continue along this path, as demonstrated by Minister of State for External Affairs Anand Sharma’s visit to Brazil earlier last month to further discuss proposed UN reforms.
What
does the future hold?
Unique as a transcontinental agreement among several
far-flung members of the developing world appears to be,
IBSA seems to have less common political ground than your
average regional organization. However, the three
countries have linked what they do have in common, namely
socio-economic conditions and political positions within
their respective regions, to promote their internal
strengths. In order to tailor a mutually beneficial
framework, IBSA can be effective if the organization
focuses on commonly held issues and works to realize
goals within spelled-out categories. IBSA has been, and
will likely continue to be, an increasingly successful
political format representing the interests of these
three emerging regional behemoths with worldwide
responsibilities.
Satyabrata
Pal admonishes his listeners that IBSA should not be
merely another “diplomatic debating society.”
However, its expansion into being a transcending factor
in global trade seems to be some distance off, as a
preferential trade agreement will have to be negotiated,
not just between the IBSA countries, but among their
likeminded counterparts in other free trade relationships
as well. Overall, IBSA has yet to discover its final
identity, and this disclosure will go a long way to
determine the future viability of global-south synergy as
embodied in IBSA. Yet, the headway that these countries
are making is quite impressive. By tapping into
interdependency among the most capable states to be found
in three southern geographic areas, IBSA is helping to
lead relations between the new organization and other
developing countries to be found within their respective
geographical regions, while working to solve a variety of
ills and socio-economic problems plaguing both their
immediate and more distant neighbors.
This analysis was prepared by COHA Research Associate Kaia Lai
March 15, 2006
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