century-long fight for ibero-american integration

8/12/2019 Century-Long Fight for Ibero-American Integration

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The New Federalist August 25, 1988 Pages 5 & 8

American Almanac

The Century-Long Fight for

Ibero-American Integration

Excerpts from the Schiller Institute book that is changing the course of

hemispheric history.

As background toNew Federalist news reports on the Aug 9!11 con"erence,held in Pana#a, to establish a new $%atin A#erican on"ederation,$Ameri-can Almanac reprints here the 'nglish!language (ersion o" chapter one o"the )chiller *nstitute+s book,Ibero-American Integration: 100 Million New

Jobs By the Year 2000 The bookwas released in 198 hapter -ne is

headlined $.istor/ o" the 0attle "or *ntegration$


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*n August o" 1982, in the heat o" the debt crisis in eico, then President3os4 %pe6 Portillo held secret consultations with the presidents o" Argen!tina and 0ra6il .e proposed to the# a 7oint declaration o" #oratoriu# on

pa/#ent o" their "oreign debts, with the intention o" thus "orcing the creationo" a new and #ore 7ust international econo#ic order

%pe6 Portillo+s argu#ent was si#ple )ince the second tri#ester o" 1982,eico had been the (icti# o" a (iolent ca#paign o" econo#ic and "inancialwar"are, including billions o" dollars o" capital "light, and a bra6en destabil!i6ation o""ensi(e on the part o" the international news #edia The inter!national banks sought to dis#e#ber eico+s a#bitious industriali6ation

progra#s, and sought that countr/+s sub#ission to the *nternationalonetar/ Fund, whichas the eican head o" state well understoodwould ha(e #eant loss o" econo#ic so(ereignt/ and an/ chance o"

de(elop#ent "or the countr/%pe6 Portillo reasoned that Argentina and 0ra6il "aced co#parable situa!tions regarding the creditor banks and the *F 'ach o" the three #a7ordebtor nationsArgentina, 0ra6il, and eicowere bound to lose i" the/continued bilateral negotiations with the banks b/ this path the/ had no"uture 0ut together, allied, with a collecti(e debt o" nearl/ :25; billion,the/ would be a political and econo#ic power capable o" de#anding andobtaining a reasonable renegotiation o" the "oreign debt The al(inas onald >eagan was then considering two dia#etricall/ opposed

policies According to the "irst, that o" .enr/ ?issinger, the debtors wouldne(er dare to "or# a $debtors+ club,$ and there"ore the =nited )tates shouldsupport the unrestrained and #erciless collection o" the "oreign debt Theother was that o" %/ndon . %a>ouche, who in his work !"eration J#$re%o" August 1982, proposed the "or#ation o" a debtors+ club and an *bero!

A#erican o##on arket, and argued that the =nited )tates would bene"it"ro# supporting the de(elop#ent o" *bero!A#erica o(er collection o" thedebt

*n the still undecided #ind o" >onald >eagan, a 7oint *bero!A#erican actioncould well ha(e altered the balance in "a(or o" %a>ouche, and against?issinger At the sa#e ti#e, %pe6 Portillo recogni6ed that the (er/


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sur(i(al o" *bero!A#erica de#anded a dra#atic 7oint action and that waswhat he proposed Argentina and 0ra6il responded eactl/ as the bankerswould ha(e wanted the# to The Argentine President told %pe6 Portillothat he would not support such a strateg/, because the/ had better $negotia!tion conditions$ than the eicans 0ra6il went e(en "urther@ the/ sentword that not onl/ would the/ not 7oin the eican initiati(e, but would all/with the banks and would acti(el/ participate in the political and econo#icisolation o" eico *n the "ace o" these two negati(e responses, the ei!can President was "orced to adopt de"ensi(e national #easures to counteractthe econo#ic war"are@ the banks were nationali6ed, and strict echangecontrols were i#posed

As a result o" this lack o" unit/, "ro# 1982 to the present ti#e *bero!A#ericahas su""ered a worse de"eat than that o" the al(inas All the nations o"

*bero!A#ericae#phaticall/ including Argentina and 0ra6ilha(e beenlooted and destro/ed b/ the usur/ o" the banks and the austerit/ progra#si#posed b/ the *F *n one bilateral negotiation a"ter another, a "raudulentand illegiti#ate debt has been i#posed all the de(elop#ent progra#s thateisted ha(e been destro/ed the li(ing standards o" the population ha(e

been strangled national business#en ha(e been dri(en into bankruptc/national currencies ha(e been de(alued to the lowest possible le(els in"la!tion has soared out o" control And, what is worse, so(ereignt/ has beenco#pro#ised

Nonetheless, that battle was not the last Toda/ *bero!A#erica "aces anotherchallengeand another chancesi#ilar to that o" 1982 Peru(ian PresidentAlan arcia has hoisted anew the "lag o" continental unit/, and has called "or

breaking with the *F and creating a co##on #arket $*" we acco#plishthe #iracle o" %atin A#erican integration,$ said arcia in )epte#ber o"1985, $we would ha(e an i##ense continental #arket to increase the

production o" our "actories we would ha(e the capacit/ to unite in de"enseo" the price o" our labor and o" our raw #aterials *t is not possible thatwe would ha(e to use a#ong oursel(es the currenc/ o" the #ost power"ulcountr/ on 'arth, being brother countries$

.a(e the political leaders o" *bero!A#erican learned the lesson o" August1982B


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Argentina's President Juan Pern in his study.

The ineteenth Century

The integrationist thinking o" arcia and o" %pe6 Portillo is neither newnor uniCue )ince the period o" the *ndependence and e(en earlier, thinkersin the republican tradition ha(e constantl/ spoken o" the $Patria rande,$

Dreater FatherlandE that is *bero!A#erica This subcontinente#phati!call/ including 0ra6ilhas a co##on legac/ o" language and culture whichis based, in its highest "or#s, on the $Augustinian tradition o" hristianit/$For o(er a centur/, it has been the 0ritish and their colonialist con"ederateswho ha(e insisted on the strateg/ o" "rag#enting the reater Fatherland, toi#pose their will through $bilateral$ negotiations

The histor/ o" nation!building shows us that there are se(eral uni(ersalguidelines to "ollow to achie(e a region+s unit/ and de(elop#ent Theseguidelines were alread/ "ull/ worked out a hundred /ears ago, but continue

to be (alid "or the current *bero!A#erican situation *n addition to thealread/ identi"ied cultural situation which is the "oundation o" all else, theseguidelines include@

1 The region+s ph/sical integration through construction o" great in"rastruc!tural works which, in turn, increase the econo#/+s o(erall producti(it/


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2 >ein(est#ent o" wealth generated b/ the econo#ic process in order to#ai#i6e e#plo/#ent o" labor power with the best possible technolog/ and

producti(it/

'stablishing a protecti(e tari"" s/ste# which guarantees the de(elop#ent

o" regional industr/ to suppl/ the #ai#u# o" the region+s necessities

G The application o" state dirigis# to create a currenc/ and a credit s/ste#subordinate to the so(ereign interests o" the nations that is, to "acilitate the"irst three reCuisites and to punish usur/ and other "or#s o" econo#ici##oralit/


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To!" Pern during a #$%$ s!eech to trade unionists in &uenos Aires. iddle"Pernist youth grou! demonstrates (ith the C)T labor union *left+" against

the International onetary Fund in #$,.


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*n the #iddle o" the 19th centur/, eican President 0enito 3ure6 attractedaround hi# a group o" econo#ists who applied and de(eloped the

protectionist ideas o" the great er#an econo#ist Friedrich %ist, thearchitect o" the Ooll(erein, or custo#s union, the er#an/ o" the 18;s *nthe A#ericas, econo#ists such as the eican arlos de -laguibel andhilean 3osel anuel 0al#aceda spread these protectionist ideas during the#iddle and end o" the centur/ Their use resulted in the econo#icde(elop#ent achie(ed in those /ears b/ their respecti(e nations Dpoint HE

-ne o" the #ost i#portant integrationist initiati(es which surged "orth in the18I;s and 188;s was the idea o" building a continental railroad networkwhich would link the continent "ro# Tierra del Fuego to eico, and whichwould connect there with the great railroad s/ste# alread/ eisting in the=nited )tates Dpoint H1E At the Februar/ 189; Pana#erican on"erence in

o#erowho had been0enito 3ure6+s a#bassador to Abraha# %incoln three decades be"oreachie(ed the passage o" a resolution "a(oring building an intercontinental orPana#erican railroad using the railroad polic/ o" his old "riend %incoln as a#odel A co##ission was "or#ed to stud/ the pro7ect, and a "ew /ears later,the o##ission on the Pana#erican >ailroad, chaired b/ 3os4 %pe6Portillo / >o7as Dgrand"ather o" the "or#er eican PresidentE released the"inal report and #ade the "ollowing obser(ation@

'perience has e(er/where shown that the de(elop#ent o" a countr/+s

natural resources "ollows the establish#ent o" rail co##unica!tions o##unications between the nations o" the he#ispherewould bring nothing other than the de(elop#ent o" the republics o"the )outh, especiall/ their interiors )tatistics "ro# the #a7orit/ o"these countries show that until now onl/ the regions contiguous to theseas ha(e been de(eloped )uch a railroad would help to eploitterritor/ now practicall/ inaccessible and would contribute to thegeneral wealth o" the countries it passes through

*t is worth noting that this ecellent centur/!old pro7ect has still not been

carried out, and in general none o" the "our principles #entioned abo(e hasbeen adeCuatel/ applied in *bero!A#erica The reater Fatherland re#ainsbalkani6ed and underde(eloped, unprotected and o(er!dollari6ed


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The Pernist /!eriment

The reader interrupts us i#patientl/@ $All this is "ine and good, and * agreethat with ti#e we #ust unite the continent 0ut let us keep our "eet on theground and be practical To unite to break with the *F now would be an

irresponsible ad(enture the creditor banks and their allies would destro/ uswith econo#ic and trade reprisals And in regard to a o##on arket, weha(e alread/ tried this se(eral ti#es, and we ha(e alwa/s "ailed There arethe e""orts o" '%A, o" all the #oribund organi6ations@ A%A%, A%A*,A>*-, etc And what the/ tried was #uch #ore #odest than what/our are proposing$

The interruption #erits a response To the "irst doubti" it would cost #oreto break with the *F or to continue appl/ing its prescriptionsthe entiret/o" this book is an undeniable response To "or# a $debtors+ club$ and an*bero!A#erican o##on arket has its costs, without doubt, and also itsdangers 0ut we will pro(e that, e(en in the worst o" cases, a united *bero!A#erica would sur(i(e econo#ic and trade war, i" it reorients its productionand its trade toward an internal *bero!A#erican arket 0ut i" it continueswith the present polic/ o" the *nternational onetar/ Fund, star(ation andgenocide, and the political dis#e#bering o" each and e(er/ one o" ournations, is guaranteed

To the second doubt, it #ust be #ade clear that the o"t!cited ea#ples o"

'%A o" the 195;s and 19;s, were neither serious nor honest atte#pts toachie(e *bero!A#erican integration >ather, the/ were operations intendedto co(er up and di(ert attention "ro# the genuine integrationist e""ort on thecontinent launched "ro# Argentina a decade earlier b/ eneral 3uan o#in!go Pern Further, we will pro(e that the entiret/ o" '%A+s acti(ities, aswell as the entiret/ o" the $de(elop#entalist$ +desarrollista, theor/ o" >aQlPrebisch, was no #ore than an anti!Pernist and anti!integrationist "actionaloperation launched b/ the Anglo!A#erican oligarch/

The true histor/ o" what Pern did, both in Argentina and on a continental

scale, is (irtuall/ unknown, thanks in large part to the '%A publicationsthat ha(e co(ered it up *n the national sphere, Pern achie(ed a dra#aticleap in the industriali6ation o" the countr/ he i#posed protectionist tari""sand nationali6ed "oreign trade he established a national bank based on theideas o" Aleander .a#ilton and he i#posed ad(anced technolog/, such asnuclear


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0ut Pern knew that this national e""ort could not win in the long ter#without continental integration, and there"ore he undertook this task o"uni"ication "ro# the #o#ent he assu#ed the presidenc/, in Februar/ o"19G

0/ the end o" that /ear, a con"erence on the alread/ #entioned Pana#erican>ailroad was held, to take up anew the task o" integration launched 5; /earsearlier b/ >o#ero and the others Two Argentine engineers, Pedro 3 ristaand Jicente F -ttado, presented the con"erence with a detailed stud/de#onstrating both the "easibilit/ and desirabilit/ o" the pro7ect, a stud/whichin its #ost salient pointsretains its appropriateness to the presentda/

The proposal o" the Pana#erican >ailroad ee#pli"ies the attitude withwhich the nationalists o" Argentina, and o" all o" *bero!A#erica, e#erged"ro# the )econd


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The =nited )tates was not prepared "or the onslaught it encoun!tered The strongest (oices were the delegations o" the industriall/underde(eloped countries, particularl/ the %atin A#ericans eneralPern had alread/ "oreseen se(eral #onths pre(iousl/ the possibilit/that the (ictors o"


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The sign o" the )outhern ross can be the s/#bol o" triu#ph o" thenu#ina o" the A#erica o" the southern he#isphere NeitherArgentina, nor 0ra6il, nor hile can, b/ the#sel(es, drea# o" theecono#ic unit/ indispensable to "ace a destin/ o" greatness =nited,howe(er, the/ "or# a #ost "or#idable unit, astride the two oceans o"#odern ci(ili6ation Thus %atin!A#erican unit/ could be atte#pted"ro# here, with a #ulti!"aceted operati(e base and unstoppable initialdri(e

-n this basis, the )outh A#erican on"ederation can be built north!ward, 7oining in that union all the peoples o" %atin roots .owB *twill co#e easil/, i" we are reall/ set to do it

*" this on"ederation is epected "or the /ear 2;;;, what better than to7u#p ahead, thinking it pre"erable to wait "ro# within, than to keepti#e waiting "or usB


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3oao oulart as his #inister o" labor, and oulart, un#istakabl/ appl/ingthe Pernist strateg/ "ro# neighboring Argentina, began to organi6e a stronglabor base around $etulis#o$ oulart and Jargas de"ended the right tostrike, doubled the #ini#u# wage, and organi6ed a 0ra6ilian eneralon"ederation o"


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EIRNS/Bertha Farfan

Abo0e" e/ican children bring (ater from the 0illage (ell. To!" the slums of

12o Paulo" &ra3il.

Pern i##ediatel/ #o(ed to do the sa#e with Paragua/ *n -ctober 195,he tra(eled to that countr/, where he signed an agree#ent "or closerrelations 0ut a second trip, planned "or the #iddle o" 195G, had to be

postponed because o" the coup d+4tat carried out b/ Al"redo )troessner ina/ o" that /ear

At the end o" 195, Argentina also signed bilateral econo#ic pacts with'cuador and Nicaragua, but in both cases political pressures on the di""erentgo(ern#ents blocked the ad(ance that Pern sought *n an atte#pt toout"lank this proble#, Pern in 1952 urged the T to "or# a continent!


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wide trade union organi6ation@ AT%A) DAgrupacin de Traba7adores%atinoa#ericanos )indicalistasE *n No(e#ber 195, Pern eplained hisinitiati(e@


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Argentina's Atucha II nuclear !o(er !lant *right+" before construction (as

halted by the International onetary Fund. At left" 4a5lPrebisch.

Prebisch and CLA

Pern was out o" power in Argentina 0ut, how to contain the power o" hisideas "or integration on the continentB The Anglo!A#erican oligarch/ hadalread/ decided se(eral /ears earlier that, i" it encouraged direct oppositionto the idea o" integration and de(elop#ent, the/ would be shooting the#!sel(es in the "oot The/ pre"erred, rather, to co#e up with their owntheories, institutions, and #o(e#ents in "a(or o" $unit/$ and $de(elop#ent,$to thereb/ sub(ert the strong nationalist "er#ent on the continent The #aininstitution created in 19G8 towards this end was '%A D'cono#ic o##is!sion "or %atin A#ericaE And the #an the/ chose to head up that operationwas one who en7o/ed their absolute con"idence@ >aQl Prebisch

aQlB 0ecause Prebisch, "ro# his "irst political acts in the 19;sto his o(erdue death in 198, was a sha#eless agent o" 0ritish neo!colonial!is#

Prebisch was trained at olu#bia =ni(ersit/ and the %ondon )chool o"'cono#ics *n 19;, with the coup d+4tat o" eneral =riburu, Prebischsucceeded in occup/ing his "irst post o" so#e i#portance@ that o" deput/#inister o" econo#ics *n 19 he was na#ed special ad(iser to the'cono#ics inistr/, and took an acti(e part in the negotiations o" thein"a#ous >oca!>unci#an Treat/ that sa#e /ear That treat/ turnedArgentina into a (irtual econo#ic colon/ o" the 0ritish rown throughout


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the period o" the 19;s depression@ *t was the onl/ *bero!A#erican countr/which did not suspend its debt pa/#ents during the depression

*n 19G Prebisch pla/ed a ke/ role in the creation o" the Argentine entral0ank, as a substitute "or the old 0anco de la Nacin )o bra6en was the

0ritish role in this deal that the rown sent )ir -tto Nie#e/er, o""icialrepresentati(e o" the 0ank o" 'ngland, to Argentina with a detailed plan o"the kind o" bank the/ wanted =n"ortunatel/, )ir -tto could not "ind anecono#ics #inister read/ to do what he wanted -ne #inister a"ter anotherwas "ired, until one Pinedo was "inall/ na#ed Although Pinedo too o""eredso#e resistance, eput/ inister Prebisch ca#e to the rescue and, in hisown words@ $* was able to con(ince hi#, and later * was put in charge o"carr/ing out the de"initi(e pro7ect o" the central bank$

The resulting institution, directed b/ Prebisch "ro# 19G to 19G5, was a#aster"ul work o" sub#ission to 0ritish #onetaris# The Argentine "oreigndebt was paid punctuall/, e#phasis was placed on agricultural eports, andindustr/ was s/ste#aticall/ strangled

aul to $"i up$ the Argentine econo#/ .e returned "ro#eile in the co#pan/ o" a tea# o" '%A technicians, and prepared thenotorious $Prebisch Plan,$ in which he proposed #easures identical to thosereco##ended toda/ b/ the *F@

>educe the si6e o" the state sector o" the econo#/, which would i#pl/"iring at least 2;,;;; $unproducti(e$ state e#plo/ees

hannel the econo#/ toward agricultural production "or eport, awa/"ro# industrial production, and raising internal prices o" agricultural

products

No wage increases "or workers to co#pensate "or the increase in "oodprices

.alt the issuance o" credit "or the national econo#/, especiall/ "or theindustrial sector

ontract new international loans

'stablish $"loating parities$ Dthat is, de(alue the Argentine pesoE and "reerepatriation o" all pro"its o" "oreign co#panies


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'port e(er/thing possible to pa/ recentl/ contracted debts

These acts tell #uch #ore about Prebisch than his sugar!coated words aboutdesarrollismo

And what o" the '%A (ersion o" $integration$B

)ince its "ounding in 19G8 with Prebisch at its head, '%A has pro#oted asort o" $slow$ integration, li#ited in its ob7ecti(es to reducing custo#stari""s a#ong *bero!A#erican countries o(er a period o" 1; /ears, and thatwithin the "ree!trade global "ra#ework o" eneral Agree#ent on Tari""s andTrade DATTE *t ne(er accepted the idea o" Friedrich %ist the 19th!centur/ er#an econo#ist o" the A#erican )/ste# schoolo" i#posingta barriers against products "ro# outside the co##on #arket ne(er did itconte#plate 7oint pro7ects or e(en 7oint de(elop#ent strategies it absolutel/

ne(er thought o" establishing a co##on currenc/

'%A+s "irst work on the sub7ect was published in 3anuar/ 195G, with thetitle /t#dy o the 3ros"ects o Inter-)atin American rade


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A#erica lacks all eperience, to #ake a total co##it#ent "ro# the (er/beginning could be a (eritable leap into the (oid$

The "or#ation o" A%A% D%atin A#erican Association o" Free TradeE the"ollowing /ear could de"initel/ not be accused o" the sin o" $total co##it!

#ent$ to integration >ather, it was a sad parod/ o" the serious e""ortsatte#pted one decade earlier The onl/ thing that A%A% did was establisha "ra#ework within which negotiations to reduce custo#s tari""s a#ong thecontinent+s nations could be carried out, product b/ product *t did notconte#plate an/ coordination o" trade, in(est#ent, credit, or other policies

A"ter 2; /ears o" acti(it/ increasingl/ irrele(ant to the terrible econo#icrealit/ o" the continent, A%A% was disbanded and replaced b/ the eCuall/useless A%A* D%atin A#erican Association o" *ntegrationE )ubregionale""orts such as arico# and the entral A#erican o##on arketessentiall/ su""er the sa#e proble# as A%A%

-" all the regional and subregional organi6ations that e#erged in the post!war period, the onl/ institution that di(erged "ro# the '%A guidelines wasthe Andean Pact, "or#ed in 199, and )'%A D%atin A#erican 'cono#ic)/ste#E, "or#ed one decade later on the initiati(e o" %uis 'che(erria andarlos Andr4s Per46, then Presidents o" eico and Jene6uela respecti(el/=nlike A%A%, the Andean Pact did not ha(e its origins in '%A, but in thesocial doctrine o" the Jatican, and particularl/ in the deliberations that

"ollowed the enc/clical3o"#lor#m 3rogressio* o" Paul J* This #eans thatthe Andean Pact in e""ect grew "ro# the sa#e tree that /ielded Pernis#

The "unda#ental di""erence between the Andean Pact and the '%A theor/can be seen in the progra##atic proposals o" the Pact *t proposed not onl/the reduction o" tari""s a#ong #e#ber nations, but also@

establish a co##on protectionist tari"" toward the eterior

carr/ out regional pro7ects and in(est#ent

coordinate di""erent national econo#ic policies and

unite criteria in regard to "oreign in(est#ent, which resulted in the "a#ousecision 2G o" the Andean Pact

*" the Andean Pact has also "ailed and has not brought about a true o##onarket, it is not "or the "ailure o" its original concept, but because that


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concept was applied on too li#ited a scale, and also because the Pact hasbeen the (icti# o" operations b/ the Anglo!A#erican oligarch/ to destro/ it

6!eration Ju7re3

The al(inas ouchetakes up the old integrationist idea, and poses the necessit/ o" i##ediatel/"or#ing a ebtors+ lub and an *bero!A#erican o##on arket .ede#onstrated the necessit/ o" creating such institutions to stop the *F+sgenocide he eplained conceptuall/ how these institutions could "unction,technicall/, and politicall/ and argued that the onl/ real obstacle to achie(!ing this was the political proble# o" #obili6ing the leadership o" the conti!

nent to undertake this di""icult taskThe #onths and /ears to co#e will pro(e the (eracit/ o" %a>ouche+se(aluation

Toda/, *bero!A#erica "inds itsel" with a newand possibl/ its lastchanceto achie(e genuine integration )ince 3ul/ 1985, when Alan arcia assu#edthe Peru(ian presidenc/, the continent has again had a clear (oice aroundwhich to #obili6e "or unit/

This book intends as its pri#ar/ purpose to contribute to the reali6ation o"

that longed!"or integration, de#onstrating both the "easibilit/ and theconceptual grounding "or the *bero!A#erican o##on arket *ts #oredetailed elaboration will be the task o" that success"ul integrationist#o(e#ent that we also seek to awaken and consolidate

century-long fight for ibero-american integration

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