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Mercosur Is Not Viable as Economic Bloc, Says Brazil’s Former Minister

Brazilian ex-Finance Minister Mailson Nóbrega "Mercosur has become irrelevant and too complicated, and even more when Venezuela is finally incorporated to the block," said former Brazilian Finance minister Mailson da Nóbrega during a bankers and businessmen conference in Geneva to promote investments in Brazil.

Nóbrega who was Finance minister between 1987 and 1990 when Brazil suffered an outburst of inflation (almost 2.700%) forecasted that the Brazilian currency will continue to appreciate given the constant influx of foreign investments and pointed out that "whenever inflation emerges, the backing of any president begins to erode."

He currently heads one of the most respected finance consulting agencies in Brazil, Tendências and in the analysis of the region he split Latinamerica in two sides: those countries that base their development on the institutional framework, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Mexico, Peru and Uruguay, and those that reproduce "the old state dominated models of the caudillos" such as Venezuela, Bolivia, Ecuador and Nicaragua.

"Argentina is in an exclusive category which can be defined as "in between," but to be more specific Argentina is far closer to the old model than to the new one," said Nóbrega.

Further on the former Brazilian minister said that Mercosur has become irrelevant although it must be acknowledged that "it helped boost bilateral trade between Argentina and Brazil. But when Argentina began manipulating internal tariffs it became ever more complicated. I think that Mercosur is no longer viable as an economic block."

However "in political terms Mercosur is very important for Brazil. It's become irrelevant for Brazil's foreign trade."

Furthermore in the hypothetical case that Venezuela becomes a full member and chairs Mercosur, and for example an agreement is to be signed with Israel, "what will Venezuela's reaction be, and since in Mercosur all decisions must be unanimous, President Chavez could very well block the agreement and also become an obstacle for other bilateral agreements such as with United States."

More specifically about Argentina, Nóbrega said that the country has great potential but unfortunately "the Kirchner administration has tended to promote populist policies and has been manipulating the prices indexes. Everybody in Argentina tells you that inflation is far higher than the official percentages."

However Nóbrega believes that the incoming elected president Cristina Kirchner will move closer to Lula, Chile and Uruguay, in spite of the fact that "her administration is a continuation of her husband's and she has to act drastically to combat inflation; otherwise Argentina has a great future."

Finally Nóbrega discarded the idea of the Bank of the South promoted by President Chavez arguing that the region already has a development bank the Inter American Development Bank with its three main clients Brazil, Mexico and Argentina, and "has done its job."

"Brazil and Mexico don't need the IDB any more, maybe Argentina, but they have managed to convince Chavez to buy their sovereign bonds. Brazil has become a major player in global financial markets so it's hard to see how the initiative will effectively take off.," concluded the former Brazilian minister.

Mercopress

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  • Lloyd Cata

    End of Story
    And so we come right around to WHY President Chavez is where he is in place and history. He has organized the scrap-eaters. That term is not a slight to anyone living in any truly Capitalist Society, whether it be of the Right or the Left. He has organized them politically and democratically. Given recent events, even he has acknowledged “the will of the PEOPLE”.

    Latin America must find a “different path”. A path that with finality throws off the shackles of 600 years of colonialism, genocide, racism, and theft of resources. How ironic that the democratic system so dear to the EMPIRE, has installed socialist-leaning leaders. If Brazil does not recognize this situation quickly enough, if it wishes to follow the examples of the West, it will inherit the same situation in Brazil. This is not difficult, eh? It is that or the military option, because “one man – one vote” means the oligarchs and their entourages will have to go. Eventually, you can bet, someone will come to organize the scrap-eaters, and when they come, Brasil should pray that it will be less violent than the Venezuela experience with Mr. Chavez.

    Many will say, “there is no such person in Brazil to do such a thing!”. Others will say, “he will not live long enough to free a single slave!”. Some will remain quiet, “because the security services might intercept your words”. And all of us know that if the present situation in Brazil regarding the abject poverty of the people, the corruption throughout the society, the wholesale give-away of national resources, is allowed to continue, someone will come. They always do….men of conscience will not tolerate the present situation.

  • Lloyd Cata

    O Que E Isso, Companiero?
    [b]https://www.brazzil.com/content/view/10005/80/[/b]

    I knew there was some men in Brazil who have seen both sides of this story. Not many are willing to risk their incomes, their positions, or even their lives for the truth, but here is one who cannot be denied. What good to them are their credentials, their fancy suits, or their dollar accounts when their reputations are as dirty as a mangy dogs ass.

    When the greedy capitalists finish using those corrupt cowards in the Brazilian government they will be revealed for the cowards and traitors that they are, then the generals can give them what they so richly deserve.

  • Lloyd Cata

    Brazil & Empire
    EMPIRE – as in troops and/or advisers in over 100 countries. Unilateral military activities to capture resources.
    EMPIRE – as in global economic force, backed by military, to control foreign markets and currencies.
    EMPIRE – 5% of the global population consuming 25% of the worlds resources, and controlling other populations and resources for its ‘friends and allies’.

    These are a few of the ways I may, at times, use United States and Empire synonymously. Generally, the issue also involves the acquiescence of the Anglo-European Axis. I could say EU in this regard, but the mechanisms of the Axis predate the EU and have yet to be ratified by a EU constitution.( Please pay attention to the small print in any final EU constitution!).

    We all understand, I suppose, the forces in opposition to the Empire; The Chinese military and economic power rises to challenge US dominance for resources around the world. The Russian repudiation of the Empires attempt to ‘steal’ the Russian economic resources. The Neo-Marxist/Leninist regimes still remaining defiant of foreign manipulation. The emerging developing countries wary of US/EU plans and agendas.

    To be clearer, the Empire is not exclusively committed to policies of the left or right. All are permitted to join, but none are allowed to leave without ‘serious’ consequences. It does not matter who the individual elected leaders are in terms of the Empires agenda. Military and market dominance are paramount. The rules are written to institutionalize the military and market positions of the dominant members.

    Brazil & [b]Mercosul[/b] are now the unfinished business to capture the Latin American resources and markets and to incorporate them under the dominance of the Empire. US dominance of the Empire is quickly shrinking due to the weakness of the US economy. Passage of the US proposal, Free Trade of the Americas(FTAA), and ratification of the US and European proposals under the WTO would deliver such a windfall to the Empire that the US economy would immediately re-inflate from the addition of the Latin American markets and resources. The rise of Mercosul in trading agreements throughout the world is a direct threat to the US economy and US purchasing power.

    The promise of stability and efficiency are promotions calculated to attract LAZY leaders and governments who do not want to do the heavy work of negotiating and protecting their own interests. It is quite seductive that the Empire offers all the rewards of capitalist market practices and profits. History tells a different story, seen in the still functioning British Commonwealth. I make no claims of intimate knowledge of the Commonwealth practices, but in looking for the ‘real’ benefits to Africa, I find little to none. Now that the Chinese and others(Mercosul?) have moved into the same arena there is increasing conflict in the region. Perhaps this is by coincidence!? Perhaps not!!!

    Every agreement outside the framework of the Empires agenda is nails in the coffin of the Empire. Mercosul is a direct threat to that agenda, so historically we can expect discord and conflict throughout Latin America, with Mr. Chavez and Venezuela as the catalyst for military and political interference. The resulting chaos providing the basis for inclusion in the Empire for protection and market stability. Indeed, as I have pointed out many times, chaos is also profitable.

  • João da Silva

    Llyod Cata
    [quote]The Empire cannot swallow the resources of South America without the demise of Mercosur. [/quote]

    Excuse me Llyod, when you talk about the “Empire”, are you talking about the good ole U.S.of A. Please do clarify.

    [quote]Perhaps the Mercosur bloc is weak in its constitutional framework. Perhaps its administration is not performing well. Maybe the addition of Venezuela will complicate matters.[/quote]

    It is indeed weak and it will never ever be strong. I have been hearing about it for the past 2 decades and nothing comes out of it, except for some pompous statements from the “Caudilhos”. The Brasilians consider it is a big joke,because we have chartered our own destiny in relationship of trade with other nations. As you yourself stated, Brasil is one of the founders of the non alignment nations. That is very good,because we can trade with any nation we want and that accept our goods as well as “Brain Power”. Remember that Brasil is also a melting pot like U.S. and many nations in the East are friendly towards us. Unlike the other Spanish speaking South American countries that revere “caudilismo”.Look at Argentina. Perons and now Kritichners . Venezuela has Chavez and now that he lost the referendum, probably he would ask his wife to run for the next presidential elections.

    Llyod, what we need is good leadership that believes in “Non Alignment” or “Neutral”. We can go a long way.

    [quote]Mercosur ensures that South American trade is not defined or manipulated in Washington or Geneva.[/quote]

    Who is going to do it ? Ch.C in Geneva?

    BTW, the entire world calls this “Mercosur”, unaware that in the largest nation of South America , it is called”MERCOSUL”. Of course, for the rest of the world, Brasilians speak Spanish and the capital of Brasil is La Paz.

  • Lloyd Cata

    Mercosur & Empire
    Mr. Nobrega’s statement before world finance leaders is the most clear proposal for Brazil to become aligned ‘exclusively’ through Western trade markets. At a time when Western powers are consolidating their regional currency and trade controls, he proposes to ignore the only mechanism in Latin America for regional considerations. He practically tells the rest of the commercial world that Mercosur is insignificant and not even worthy of consideration in the world markets. Did I get that right?

    Perhaps the Mercosur bloc is weak in its constitutional framework. Perhaps its administration is not performing well. Maybe the addition of Venezuela will complicate matters. How long did it take the EU to iron out its issues which are still not completely resolved? Mercosur may not outnumber the countries on the Empires trading circle, but it is the best and wealthiest alliance in South America, both in people and resources. [b]It is the countries of Mercosur that are the prize for world financial markets.[/b] The Empire cannot swallow the resources of South America without the demise of Mercosur. They cannot manipulate the entire southern hemisphere without the demise of Mercosur. The Mercosur agreements that is a mechanism for trade between neighbors is not something to be ignored or dismissed. It should be strengthened and seen as a pathway to trade with Latin America.

    I suppose Mr. Nobrega also proposes that Brazil approve FTAA and WTO because without Mercosur there is no bargaining for any concessions from US or EU. The only thing holding the pressure from complete domination of the markets in Latin America is Mercosur. Would you propose that trading decisions for the entire Latin America will be made in foreign capitals and money exchanges? Is this what Mr. Nobrega advocates? Is this what he desires? Should Brazil or any nation go outside its own interests and wisdom to define how it would trade with a neighbor? [b]This is common sense, and that is why the West has its own ‘trading blocs’. It simply wants to integrate(capture) the entire ‘Latin American bloc’ with the demise of Mercosur.[/b]

    It would do well for Mr. Nobrega to propose and to assist in the creation of a strong regional market in Latin America. That is best done in the capitals of Latin America and ultimately should be a “choice” ratified by the Latin American people. Mercosur may have trade capability with any nation it wants and does not need the approval of governments or banks outside the region. Why shouldn’t South America have its own trading bloc as does Europe? Are you too stupid or too lazy? Or have you no concern for the people and workers who will be affected the most?

    Brazil is a founding member of the Non-aligned Nations. [b]Mercosur ensures that South American trade is not defined or manipulated in Washington or Geneva.[/b] Mercosur in crucial as a instrument of ‘fair trade’ between neighbors and between Latin America and the world. To propose otherwise is either stupid, cowardly, or treacherous.

  • João da Silva

    Mercosur Is Not Viable as Economic Bloc, Says Brazil’s Former Minister
    I am afraid that Mailson Nobrega was correct when he made the statement.

    I still remember a famous statement by the late Sen.ACM. He called Mercosur as “Merda Sul”.

    It is so funny that the writers of articles call this disintegrating block as “MERCOSUR” and not “MERCOSUL”.

    Mailson did go through a very difficult period as a minister, but he is quite an intelligent person. So he knows what he is saying.

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