Lula’s Closeness to Chavez Only Makes Brazil More Alluring to Bush

Brazilian economist Plínio Soares de Arruda SampaioThe Bank of the South is already a reality. Enthusiasts say it is another integrationist project under way in Latin America. But others are more skeptical and say that the Bank could just turn into a "tit" to feed Latin America’s major capital interests. Last week’s decision in Quito to create the Bank of the South indisputably signifies another step towards Latin American integration. Now, not only the countries that make up ALBA are involved but also countries like Argentina, Brazil, Ecuador and Paraguay.

But what are the chances that the Bank of the South won’t be a repeat of the International Monetary Fund, the Inter-American Development Bank, or the World Bank? What guarantees are there that the regional Latin American multinationals will not take advantage of capital based on the pensions of the region’s peoples for their own ends?

Many people are concerned about these matters, not just in Latin America, but everywhere in the world that watches with high hopes the multiple integration projects launched by Hugo Chavez and the other members of ALBA.  

We spoke about the Bank of the South with Plínio Soares de Arruda Sampaio, an economist at the State University of Campinas in Brazil, one of various leading economists who gave presentations at an international conference on globalization and integration in Havana last February.

How has the debate gone in Brazil on the Bank of the South from the point of view of the government and the popular movement? What are or have been the expectations of that bank? Can it be a bank to reindustrialize Latin America or will it be one  whose funds local or regional big industrial capital will exploit for their own advantage?   

Brazil is a very provincial country. The relations of dependency and domination that characterize the world capitalist system play no part in Brazilian political debate. For that reason discussion of the Bank of the South is meagre, as much in government circles as in the social movement. Until now, discussion has been limited to conservative economists worried about the Chavez diplomatic offensive in Latin America. They fear any initiative that might scratch the Lula government’s excellent relations with the IMF, the World Bank and the Untied States.

Forming a bank to manage Latin America’s dollar surpluses is an excellent idea.  Having a bank able to offer credit in international currency will dramatically reduce the dependence of countries in the region on international bodies and the international financial community. But it is an illusion to think that a bank is able to solve our problems. Financial autonomy  is a precondition for the articulation of economic policies focused on the needs of the overall population.

But it is not a sufficient condition to break imperialism’s hold in the region. To interrupt the process of a return to neocolonialism that affects the region, promoting much deeper changes is fundamental, such as nationalization of the economy, renouncing spurious international agreements that hobble the liberty of our national states, land reform, urban renewal and so on.

Without such measures, on the best hypothesis, the Bank of the South will turn into an institution for funding the so-called "national champions" – big companies that operate like multinationals, with great operational autonomy but with practically no national responsibility.

Brazil’s Real Concern

El Clarín reported on April 17th on the eve of the presidential summit on the island of Margarita, "Marco Aurelio Garcia, Brazilian President Lula da Silva’s adviser on international affairs  yesterday squashed any hope of a supposed disposition by that country to participate as a founding member in the Bank of the South, an initiative proposed by Argentina and Venezuela." He commented "We are not going to go along with the project, we are not going to eat from a plate prepared by someone else". What is hiding behind this strong rejection of the Bank of the South project and what has been Lula’s position?

Lula hasn’t the least problem with "eating from a plate made for someone else". He has eaten from the hand of the IMF and the international banks since before taking office, in September 2002, when he underwrote the so called "Letter to Brazilians" in which he committed himself  to following the neoliberal menu.

The Brazilian government is more worried about sustaining its "credibility" with the international and national financial community than with trying more or less heterodox exits from the neoliberal dead-end. For that reason Lula is very resistant to getting close to the Bolivarian revolution and seriously mistrusts Evo Morales and Rafael Correa.  

In what sense could the Bank of the South really be an alternative to the IMF, the Inter-American Development Bank and the World Bank in the grass-roots sense of integration and social development for the peoples who might be members of that bank? Or will it be, as some have put it, simply a lending institution for infrastructure works?

The Bank of the South would be an alternative to the international bodies if its resources were used to finance a style of development where "the North is the South", or in other words, to fund a model incorporating technical progress that categorically prioritizes the overall needs of Latin America’s people – land, employment, housing and national sovereignty.

Otherwise, the bank will only be a tool for the region’s big economic groups to drive their international competitiveness. In other words, for the Bank of the South to serve the Latin American peoples, its formation ought to be part of a more general process of breaking away from imperialism. I don’t see the least possibility of a change on that scale without superseding capitalism. Thus, the Bank of the South ought to be a bank to finance a socialist economy.

Political Power

How can it be a bank with equal participation for the member countries based on a proportional representation for the respective economies, as Guido Mantega the Brazilian Treasury minister has put it, so that all the countries can be "on an equal footing?"

The integration of the peoples of Latin America should be conceived as unity within diversity. Therefore it is fundamental to root out any kind of chauvinist attitude or hegemonist tendency. In order for the stronger economies not to gobble up the weaker ones, for the minority not to be cut to pieces by the majority, Latin American integration demands a federal arrangement with very high levels of political power for the peoples that have the weakest economies. It is in that spirit that I understand that the decisive process of the Bank of the South ought to be conceived.

According to the Venezuelan ABN news agency, Mantega has also suggested to the government in Brasília that should this financial institution come about then it ought to be linked to the Southern Common Market (Mercosur). What is your opinion of that position? Why the interest in "tying" it to Mercosur ?

The Brazilian government has no intention of breaking with the global order. Mantega’s concern is to subordinate the Bank of the South to the dominating logic of the North, since Mercosur is a commercial agreement serving the interests of some multinationals and fits perfectly into the framework of neoliberal globalization. A bank that might break ranks with that order does not figure in the plans of Lula’s government.

What path has Brazil chosen? What are the links that unite Brazil and Venezuela economically and industrially and in what areas might they grow? Is Brazil really integrated into Latin America?

Economic links between Brazil and Venezuela are tenuous. Brazil is self-sufficent in oil and the Venezuelan market for Brazilian exports is tiny. Brazil is very interested in Venezuelan gas so as to lessen dependency on Bolivian gas and is interested in opening new markets for its industries in Venezuela.

The two objectives are complicated. The first one only reinforces an outmoded energy model. The second one, if it were implemented in accordance with the ultra-liberal rules of Mercosur, would compromise Venezuela’s industrialization. I think Brazil and Venezuela have many fronts for economic cooperation but they ought to be conceived of within the framework of ALBA.

Mercosur and the other South American countries are important commercial partners for Brazil. But this does not mean that the Brazilian economy is integrated into Latin America. It is the multinational businesses, welcomed in Brazil, who, the worse for us, are profoundly integrated into Latin America’s economic space. An economy at risk of disintegration, like Brazil’s, cannot integrate with another and vice versa.

Lula’s Double Agenda

Is Lula playing with two agendas? One with Chavez and another with Bush? How important might an eventual agreement on ethanol between the United States and Brazil be in creating obstacles for Latin American integration?

Really, Lula only has one agenda : to win the confidence of imperialism as its most favoured partner in South America. Beyond the scene-setting game for internal efect, above all with the popular sectors that sympathise a lot with the Bolivarian revolution, the "friendship" with Chavez helps increase Brazil’s room for manoeuvre with the United States.

Should such a deal come about the preference for the ethanol option might really douse the dreams of greater Brazilian participation in an alternative program of Latin American integration

Ethanol marries agribusiness with the auto industry – the new great landowners with old international capital – giving a further push to the pattern of peripheral neoliberal accumulation that condemns Brazil to deepen the process of return to neocolonialism that has been on course now for more than 30 years.

This interview for Argenpress was translated by Tortilla con Sal.


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