The Summit That Lost Its Way

11-04-05, 10:11 am

Of all the contrasts likely to be witnessed at the start of tomorrow’s Summit of the Americas in Mar del Plata, Argentina, none may be as drastic as that of President Bush and his Argentine host, Néstor Kirchner. The former, bruised and battered after a scandal-laden October, arrives at the Summit with very little of the political capital he so proudly boasted of after his narrow reelection victory, and therefore has little leverage on hemispheric issues, that both then and now he only halfheartedly understood and never was able to dispatch. Kirchner, on the other hand, is flush with success, after winning decisive victories in recent legislative elections that strengthened his mandate to continue with his anti-IMF economic reforms which so powerfully resonate throughout the region. This juxtaposition helps to frame the contrasts and blurred visions of the Summit itself. Many issues will be at play, a spread indicated by the vague official theme – “Creating jobs to confront poverty and strengthen democratic development” – and there is precious little consensus on how to go about resolving them. The Summit will provide an international stage on which these differences will be at first spotlighted and then shoved out of sight because they defy any attempts at reconciliation.

Mar del Plata: An Unimpressive Continuation, an Uncertain Path

The 2005 Summit draws on the failed legacies of its predecessors: Its theme is a fusion of the 2001 Quebec Summit (democracy) and the 2004 Monterrey Summit (development), and builds on some of the half-baked concepts from those meetings, as well as from the 1994 Miami reunion. However, many of the plans and projects from those earlier events are as of yet raw, and Mar del Plata is unlikely to cook them, despite the pressing need for concrete and constructive solutions to longstanding hemispheric issues.

A constellation of events and topics make this Summit particularly consequential. Several potential regional crises, highlighted by tense domestic political conflicts in Ecuador and Bolivia, an upswing in violence in Colombia, and renewed border hostility between Peru and Chile, have heightened tensions throughout the hemisphere. Adding to the unsettled political atmosphere are the numerous flash points that could be ignited by presidential elections slated to take place in the next 12 months, a total of eleven ballots in all. Yet the concept of “strengthening democratic development,” even as it rhetorically pertains to those situations, cannot be separated from the hard social issues, namely that of overwhelming poverty, on which corrective actions must be taken for political and economic stability to be achieved. Despite macroeconomic growth during the 1990s in some of Latin America, poverty and unemployment have increased in many countries and such problems are beginning to severely undercut perceived success.

Furthermore, there are deep-seated questions regarding the foundations of North-South relations. For Latin America, immigration remains a hot topic, especially for countries whose nationals provide the large illegal populations to be found in the U.S., especially Mexico, Honduras, El Salvador, the Dominican Republic and Guatemala. From its perspective, the U.S. has reason to see the region’s current juncture as portentous. The growing Chinese economic and political ties with the region, which sparked hearings in both the House and the Senate this summer, suggest the risks of declining regional engagement on the part of Washington. This decay was in large part because of the ideological drive of administration hardliners like Otto Reich, Roger Noriega and Caleb McCarry, who were more absorbed in trying to destabilize Cuba than field a sound and balanced regional policy, which was as detrimental to Latin America’s self interest as it was for the U.S. Likewise, the EU’s apparent willingness to offer balanced fair trade agreements to blocs like Mercosur, perhaps indicate that while Bush’s attention was diverted in Iraq and Afghanistan, and his Latin American policy obsessively focused on tightening the screws on Castro’s Cuba, the rest of the region was breaking free from historical constraints imposed from Washington.

What’s at Stake

While Mar del Plata’s theme may be vague, it is clearly another attempt to address the broad question of which path Latin America should pursue as it seeks to break from the shackles of underdevelopment. From its inception, the Summit of the Americas has contained the motive of fashioning a proper economic strategy as a highest priority. The 1994 Miami meeting introduced the idea of the Free Trade Area of the Americas (FTAA), as a hemispheric extension of NAFTA, which had taken effect in January of that year. Yet the FTAA negotiations have murderously stumbled, and with the widening failure of neoliberal policies, the FTAA itself has become a contentious issue that could become an early casualty of hemispheric divisiveness. Many countries, such as Ecuador, Guatemala and Peru, which adopted neo-liberal Washington Consensus policies during the 1990s, are now painfully confronted with the unpleasant residue of programs that patently failed to achieve inclusive national development. Several other countries have adopted, with varying degrees of success, approaches that range from moderate managed market policies to almost full-blown socialism.

You Say Potato…

The central preoccupation of the 2005 Summit will likely concern which vision of a sound and appropriate economic strategy has the widest currency in Latin America. When President Bush arrives in Mar del Plata he will find himself at odds with some of his counterparts who see the future differently. There has already been a considerable amount of wrangling over the wording and content of the document now being prepared to be issued at the Summit, and the final text may not be resolved until immediately before the meeting convenes.

Washington has made no secret of its desire for a free trade agreement with all of Latin America, be it via smaller bilateral or regional accords, or the prized FTAA. At the Summit, Bush will almost certainly follow a rigidly neoliberal party line, claiming that such pro-market and integrationist policies do indeed reduce poverty while promoting economic growth and democratic systems. According to the State Department, “A centerpiece of the Summit process over the last several years, and an important expression of the objectives of the Summit process, is free trade in the hemisphere. Free trade unites the hemisphere, sustains our democratic institutions, and offers opportunities for all nations to prosper. Free trade is a particularly important and relevant topic for the November 2005 summit because free trade is the engine for economic growth and job opportunity.”

However, Washington’s boiler-plate assertions that free-trading policies have benefited the region are dubious at best, and in the runup to the Summit, Kirchner has been particularly vocal in disputing that claim. Seeing Mar del Plata as a sort of referendum on the Washington Consensus policies of the 1990s, the Argentines will point out that free trade and open market strategies have proved insufficient to resolve Latin America’s social issues. Vice Chancellor Jorge Taiana observed, “there are several countries that have a vision different from ours, and have a more positive vision of the economic reform processes of decades ago. Certainly, and it’s no secret, we as a government are not in total agreement with the Washington Consensus… There are different visions and experiences, we reflect what we believe is the majority opinion in the hemisphere.”

Instead, Argentina’s proposals have centered on several themes that directly challenge Washington’s orthodoxy. First, they have stressed the need for economic growth with parallel creation of “decent” jobs in the formal sector rather than the “destructive” policies of the 1990s that left a wake of poverty. In taking this position, they noted that welfare alone is insufficient, and the state must become involved to ensure that economic growth is inclusive. Second, they have attacked the global economic structure, highlighting an ineffective international financial system that mismanages the developing world, while at the same time accusing developed countries’ protectionist policies of producing third world poverty.

As such, Buenos Aires has sworn to protect the region from Washington’s obsessive insistence on the FTAA. According to an Argentine official, “Mar del Plata is not the Summit of the FTAA. Mercosur [in which Argentina has a powerful role] is not going to sign any commercial agreement which is not favorable to the interests of the region.” The leader of another Mercosur country, President Luiz Inácio “Lula” da Silva of Brazil, will also likely argue against the detrimental aspects of hard-line free trade. Lula has stated that he will use the Summit as a venue to present the case of his government’s acclaimed “successful” political economy, a claim tinted by recent corruption scandals but nevertheless underpinned by strong performance statistics.

“Screw the FTAA”

If Kirchner and Lula are well positioned to stalwartly, if politely resist Washington’s pressure, Venezuela’s President Hugo Chávez certainly will be more flamboyant in his demurrers to Washington’s dictates. He has publicly stated that he will go to Mar del Plata with the express purpose of saying “Screw the FTAA.” Like Kirchner, the Venezuelan leader is riding high, although he gathers his strength from a public treasury brimming with the windfall from current high oil prices and his country’s recent entry into Mercosur. And where Buenos Aires seeks to deflect Bush’s FTAA myopia and encourage softer “pink” market programs, Chávez will come brandishing his own proposal, one that bears the mark of his “Socialism for the 21st century.”

Venezuelan Foreign Business Minister Gustavo Márquez has declared that at the Summit, his country “will defend regional integration, in contrast to the FTAA which represents a return to the Monroe Doctrine,” and argues that the vehicle for such integration ought to be Chávez’s Alternativa Bolivariana, or ALBA, program. ALBA seeks to provide an alternative to the FTAA by connecting all of Latin America through regional cooperation in a socialist mixed economy model focusing on social participation. Part and parcel of his advocacy of this program will be Chávez’s only slightly outlandish, but nonetheless highly popular accusations that Bush is responsible for Latin America’s poverty and underdevelopment.

Chávez is also the only leader attending the summit who will also participate in the parallel “Summit of the Peoples” protest, a meeting in Buenos Aires of civic groups from across the hemisphere, which will advocate alternative development strategies, such as Caracas’ ALBA. While such grandstanding will undoubtedly pull the media’s attention, many members of Latin America’s delegation will be somewhat skeptical about the fundamental viability of ALBA, as the proposal remains a vague idea rather than a concrete option. Nonetheless, Chávez’s actions will highlight the availability of alternative development models that contrast sharply with Bush’s free trade proposals.

Playing With an Empty Deck

As he enters the unabashedly hostile terrain of Mar del Plata, Bush must maneuver delicately: Despite his appallingly low personal popularity ratings in Latin America, economic and political ties to the region hold great importance for the U.S. Bush therefore must realize that his usual abrasive tactlessness will only alienate wary Latin American leaders who are already looking for alternatives in Europe and Asia and are aware of the fact that Latin American trade with Europe already rivals the economic relationship between the region and the U.S. Acknowledging that their own countries could also potentially benefit from improved North-South relations, regional leaders are pushing Bush to soften his stances and make peace offerings on a variety of fronts from economics to immigration.

Washington’s traditional Central American client states have a laundry list of requests for Bush, chief among them a new immigration agreement. In lieu of a major accord, Salvadoran president Elías Antonio Saca, Guatemalan president Óscar Berger, and Panamanian vice president Samuel Lewis Navarro (attending in place of President Martín Torrijos) are all highly interested in obtaining Temporary Protected Status for their residents in the U.S. This issue will certainly interest Mexican president Vicente Fox as well, who cannot have forgotten Bush’s pre-9/11 promises of privileged immigration policies linking the two countries. Nevertheless, it is not a propitious season for immigration accords because of the strong anti-immigration mood that is whipping up U.S. public opinion on this question.

A Time for Favors

Others will seek increased U.S. aid and involvement. Honduran president Ricardo Maduro has stated that he will seek U.S. assistance to help his country control the impact of the oil price spike, which has led to major social instability. Even Kirchner will ask Bush for favors, announcing on November 1 that he will, according to the Argentine daily Clarín, “solicit the intervention of the United States to help soften the harsh demands of the IMF,” which have produced a stalemate in the negotiations between his country and that body.

While it would be a wise diplomatic move for Bush to aid the Argentine leader in his time of need, when it comes to the litany of other requests that will be laid on his doorstep, he may not be able to be so obliging. The administration’s recent scandals have caused a gash in his political capital, and from this weakened position it is unlikely that he will be able to offer much. Nevertheless, if Bush cannot demonstrate, at even the most minimal level, an earnest concern for and a responsiveness to the entreaties of Latin America, the door will be open for Kirchner and Lula to perhaps assume a new regional role centered on a rapid retreat from dependency on the U.S.

Furthermore, if Bush refuses to soften his hard-line FTAA orthodoxy and insists on pushing the subject at the Summit over the objections of others, he will undoubtedly alienate already wary regional leaders. Recently, Bush has acknowledged that the FTAA is indeed “stalled,” which could auger well for negotiations. Nevertheless, if Bush has a change of heart and falters, Chavez will be able to step in with his ALBA proposal, which could muster some support by default, as well as help encourage the search for alternative models.

When the Summit concludes on Saturday, it is unlikely that any major new developments will be there to create headlines. No radical programs will be implemented, nor will major agreements be signed. It is possible that there will not even be any lofty proclamations. Mar del Plata’s lingering legacy, however, will be the emergence of contrasting visions for regional development thatcould effectively challenge the Washington Consensus model, perhaps contributing to an increased willingness to break with the overbearing diktats coming from the North.

From Council of Hemispheric Affairs