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Montevideo, October 3rd 2023 - 05:05 UTC



G7 countries lack Unasur “imagination and audacity” to overcome current crisis

Tuesday, September 13th 2011 - 05:33 UTC
Full article 6 comments
Maria Emma Mejia, Latin America has learnt from its recent past Maria Emma Mejia, Latin America has learnt from its recent past

The Secretary-General of the Union of South American Nations (UNASUR), Colombian María Emma Mejía said that the region has shown “more imagination and audacity in the measures applied” than G7 countries, which are debating how to get out of the mess they are currently undergoing.

“The countries of the G7 need a lot more than only releasing a communiqué; the blocs they represent rehearsed almost everything, passed extremely harsh austerity laws for their citizens, but they were of no use. However, our countries that are part of G20 and BRIC had more imagination and audacity due to what we’ve learned in the ’80 and ‘90s” Mejía continued.

Mejía explained how UNASUR country members applied actions that were debated in the last presidents’ summit in order to “agree and implement joint measures to protect themselves from the crisis”.

She highlighted Colombia’s decision to have closer links with Brazil and to trade with local currency, leaving aside the US dollar. These are trade mechanisms with local currencies, “following on the successful example and experience of Brazil and Argentina”.

Likewise Mejia said that the region has 600 billion dollars in reserves, “and it’s time we begin working and operating with our own currencies”, she added.

Unasur chairwoman also mentioned that the “Latin American Reserves Fund, the strengthened Andean countries promotion fund, are tools which are intended to impede speculative capital, that come wishing to crack the good moment the region is undergoing which is estimated to grow on average 4.4%, a percentage envied by developed countries”.

Referring to the impact of the crisis in the region, the secretary-general assured she is “optimistic, meaning we have done things well after passing through the lost decade of the ’80, and the failed decade of the ’90. Latin America learned from the past.”

Mejía reported that members of UNASUR will meet in November in Cusco, Peru to advance in “measures that can make growth effectively turn into social affairs development, where the region must keep working to ensure inclusion and a more fair distribution of income”.

Meanwhile from Asuncion it was reported that Paraguay became the twelfth country to join Unasur following the promulgation by the Executive of the incorporation bill.

The bill was approved in Congress by a vast majority in early August and was signed last week by President Fernando Lugo. The country’s membership of Unasur, the incorporation of Venezuela to Mercosur (blocked by the Paraguayan Senate) and naming an ambassador in Brazil are three priorities of the Paraguayan Executive.

Paraguay will be taking the rotating Unasur chair and therefore must organize a presidential summit. The idea is to take advantage of the coming Ibero-American summit event next October 28 and 29 in the Paraguayan city of Luque. Although an agenda nightmare Unasur heads of state could take the opportunity and hold parallel meetings.

Categories: Economy, Politics, Latin America.

Top Comments

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  • briton

    So now Unsure, is now sure, they are correct, and the rest is wrong,
    Well only time will prove this point,
    Our countries that are part of G20 and BRIC,k had more imagination and audacity in other words, they use other peoples mortar to fill their gaps, ?

    Sep 13th, 2011 - 07:47 pm 0
  • GeoffWard2

    I may have this wrong, but I believe that the South American national economies were less affected by the global crisis because:

    1. they were not yet sufficiently global;

    2. because they had economies with less general credit and mortgage credit;

    3. with a greater proportion on subsistence personal conditions;

    4. with low proportional commitment to military expenditure;

    5. with low overseas aid budgets but nett receivers of overseas aid;

    6. with population levels not yet at carrying capacity, allowing surplus food to be exported for profit; and,

    7. fortunately and fortuitously, with billions of tones of exploitable and exportable raw materials able to be traded at a profit.

    I depart from Unasur’s assertion that these conditions (above) were a well thought-out and considered strategy to enable South America to weather a global crisis.

    They were simply the conditions that pertained at that time, and conditions that offered advantage during a time of disrupted economies in the developed world.

    Sep 13th, 2011 - 08:20 pm 0
  • Forgetit87

    The East and Southeast Asian economies performed better than the West: and they're global economies, at least in the sense that exports account for a large part of GDP. They also have access to cheap credit in the international markets. The same one couldn't say of the UK or the US: they're not globalized economies, since exports account for a small percentage of GDP (less than 15%). Still they were hit hard by the crisis, weren't they?

    There were two reasons Latam (and Asia) were less affected: 1 - because the epicenter of the crisis lied elsewhere; 2 - because they had more ground to stimulate their economies (lower levels of external debt and moderate levels of public debt, and more grounds to introduce a looser monetary policy; cf. China's succesful attempt to compensate for reduced exports by means of investment and housing); 3 - and because the financial sector doesn't compose such a large part of their economies as is the case in the UK and the US. Notice that European countries that relie less on speculative activities (Germany, Sweden) did better than the UK. These are structural differences; they don't pertain to time alone. Sure that doesn't mean their situation hasn't been affected by the crisis (see China's explosion in local public debt since the 2008 crisis, which will considerably reduce its capacity to stimulate the economy in face of a looming global crisis).

    As to raw resources, I have once and again noticed that most S. American countries have current account deficits. That means the external sector doesn't add to growth in these economies. Your suggestion on food exports also sounds weird, specially your suggestion that they are linked to demographic situation. Why didn't the US or Canda benefit from this? Don't they also have a powerful farming sector? The funny thing is that the economy most reliant on raw resources (Venezuela) was the one that suffered the most from the crisis: and it had previously been growing at fast rates.

    Sep 13th, 2011 - 09:02 pm 0
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