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|Sujet: PLAT DU JOUR MONÉTAIRE SOUTH AMERICA Sam 27 Juin - 16:37|| |
- Citation :
- South America slowly abandons USD
Turning to local currencies for commercial exchange, South America has initiated a process that tends to reduce dependency on USD.
The LAIA (Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Peru, Paraguay, Uruguay, and Venezuela. Panama is about to be incorporated) seeks to strengthen intra-regional commerce by fostering the Reciprocal Payment and Credit Agreement (RPCA), the use and empowerment of local currencies.
The questions arising around the health of USD as refuge currency and the falling imports of the main powers, generated proposals in the G-20 meeting in London rose to replace this currency like international payment instrument. In spite of the lack of initial consent on this topic, serious doubts were outlined on USD as international currency  .
Argentina and Brazil were the first to follow this initiative. On September 8, 2008, after two and a half years of intense technical work, they signed a bilateral treaty within the MERCOSUR to allow foreign commerce transactions to be made directly in local currencies. In October of the same year, the new mechanism was set in motion  .
On the same wavelength, on May 6, 2009, Brazil agreed with Uruguay on abandoning USD for their commercial exchange  . Brazil is also studying with Colombia the possibility of swapping USD for local currencies for their commercial activities  .
During the London summit, Brazil directly proposed to China that the Chinese Renminbi and the Brazilian Real be used as a settlement currency, and that the U.S. dollar be abandoned  .
Argentina and China agreed to a three-year currency swap totaling 70 billion yuan, ($10 billion USD)  .
Bank of the South : following the steps of the EU ?
Although the Bank of the South  initiative was put forth by President Hugo Chavez  , together with his Argentine peer Nestor Kirchner  , signing the Memorandum of Agreement on this issue on February 2007. Brazil, initially opposed to the idea, who finally injected it with dynamism. What was in discussion is if the Bank of the South would be similar to the European Development Fund (EDF)  that finances infrastructure projects in the areas of relative smaller growth to promote autonomous development, absolutely necessary to diminish the regional asymmetries. Brazil already has a Bank of Development, BNDES, with a very superior wallet of investment to the World Bank. This has been in principle the reason of the opposition of Brazil. But the function of the national banks of development is the promotion of the national companies, and what is implicit in the Bank of the South is a regional new architecture that bears three interrelated elements  :
• A Monetary Unit of the South.
• A Fund of monetary stabilization, the Fund of the South.
• A Bank of the South that uses the existent reserves for the development of the region.
It is necessary to stop the transfer of resources from the South to the North to have genuine funds for the region. On the other hand, the integration of South America demands a financial independent system of USD in a moment in that this currency is losing its rol of international foreign currency.
The bank is proposed as an alternative to the IMF, World Bank, and Inter-American Development Bank. However, the Bank of the South will not function like a lender in the IMF style. Instead, it will finance development projects in key economic areas for the geopolitical integration of the south :
• Land, air and maritime infrastructure ;
• Food supply nettig ;
• integral health system netting ;
• system of education for transformation ; and
• an integrated energetic system.
This financial project aims to boost measures of economic integration that strengthen the Union of South American Nations. It also works on the creation of a common currency within the next five years, approximately  .
It was officially formed in Buenos Aires on December 9, 2007, with the signatures of the member presidents. Initially, its headquarters will be in Caracas, with two offices in Buenos Aires and La Paz.
On May 8, 2009, the Ministers of Economy and Finances of Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay, and Venezuela met in Buenos Aires to evaluate the final statutory terms of the future entity  . Now it is time for the presidents and congresses of each country to ratify the agreement.
The agreement establishes that the seven partners will contribute a capital of USD 7000 million. In order to reach this sum, Buenos Aires, Brasilia and Caracas will provide 2000 million each. Montevideo and Quito, 400 million each. Asunción and La Paz, 200 million.
Regarding the functioning of the Bank of the South, each country will have a vote in its board. However, for the approval of projects beyond USD 70 million, the endorsement of two thirds of the total capital of the bank will be required. The weight of each country in the decision-making process, one of the issues that took the longest to resolve, was thus settled. Such projects will call for the positive vote of at least two of the biggest investors : Argentina, Brazil, and Venezuela.
South America has begun supplementing its production and consumption capacity, to increase the interdependence of their economic activities : industries, services and markets. I.e. it has begun construction of an effective economic region. It is creating an organization to coordinate policy and take the ability to mobilize forces and resources in his defence, or in pursuit of common objectives. This aims to be a political region.
That the way of the South American integration in which the problems to solve are many. Beginning by the ideological diversity of the different governments. Some tend to move away of the model neoliberal, nationalizing the natural resources, putting restrictions to the entrance of speculative capitals, controlling driving of the transnational ones, and tried to move away of the recipe book of the IMF and the World Bank. There are others like Colombia, Peru and Chile, with a totally coincident policy with the interests of Washington (the political projects of Alvaro Uribe and Alan Garcia diverge explicitly of the sustained ones by the Andean Community of Nations). At the same time there are several disputes pending of resolution : Chile and Peru be opposite by the territorial sea ; Argentina and Uruguay by the installation of Botnia plant, Chile and Bolivia by the exit to the sea for this last one ; the small countries of the MERCOSUR demand more power of decision ; Venezuela and Colombia maintain permanent border controversies ; and Venezuela make claim a portion of the territory of Guyana.
Argentina and Brazil, for their potential to produce foodstuffs, their energetic resources, both of strategic for the future world, and the size of their markets, have emerged as pillars of South American integration. Brazil stands out for its integration policy, based in their interstate coordination and consistency of its State policies. Argentina, if is able to consolidate their social and economic integration, and to develop a coherent foreign policy and consistent with the importance of regional integration, by theirs history and its economic weight can become an important element in this process. Eventually, Venezuela could add impetus, support on their apparent determination to ingress into Common Market of the South, which will take place when with Venezuelan project achieved compatibility with MERCOSUR one.
Brazil is the only country in the region that maintains consistent and enduring productive project and an industrial development policy at regional level. Their have been set for his economic and political weight in the main regional integration motivating. Have government agencies with strategic thinking that operate as « brain public institutions » and a natural exchange of ideas with academic institutions.
Their strategy prioritizes the need to integrate all national markets and their populations. For those is necessary to develop infrastructure, transport and communications (waterways, automotive roads, railways, ports, airports, pipelines, oil pipelines, communications networks, etc) and to unite the two great watersheds of South America (Plata and Amazon). The aim is to foster regional synergy that enhances the cumulative effect of the region, creating a dynamic that goes beyond the existing concentrated trade on commodities and the prevalence of their exports to developed countries.
Argentina, that developed an industrialization degree to mid-century XX, it fell down by the last decades, during the military dictatorships, Alfonsin’s government and finally for the period of Menem’s government (1989-1999). During the ten years of this last one that tried to construct with the United States similar relations that Argentina had with Great Britain for more than a century, led to the destruction of the nascent industrialization  but also human resources and the state-administrative structure. The process of national reconstruction inevitably will be prolonged. In spite of all this, Argentina conserves an important relative weight in the region.
We have tried to give an objective vision of the progresses reached about South American integration. We are optimistic based on the opportunities that are opening the present systemic global crisis. But we do not have to ignore the existing risks, between which one stands out the formidable visible asymmetry between the Brazilian colossus and the rest of its potential partners. Insofar as the partners accomplish to reduce this gap, we can augur the success of this integrating process as a new geopolitical region.