Friday August 7, economic ministers from the Union of South American Nations’ (UNASUR) member states met in the Peruvian capital to discuss the current unstable economic climate in the U.S. and Europe.
At the meeting in Lima, the ministers discussed a “plan of action” for dealing with the unfolding financial crisis, which saw the U.S. credit rating downgraded from AAA to AA+ by the credit rating agency Standard and Poor on the same day and intensified panic on the stock market.
“There is a realisation in the region, after a long period of time, that the problems coming from the North can cause external problems that can affect our economies” said one of the delegates from Argentina.
In what Venezuelan Foreign Relations Minister, Nicolas Maduro, called a “historic” step, member countries agreed on the need to act as a geo-political bloc in order to protect the region from the latest global crisis, demonstrating that the continent is “reacting and responding in order to build our economic strength,” said Maduro.
Some of the main propositions aimed at insulating UNASUR economies from any related economic downturn include placing limits on the speculative activities of foreign capital and increased intra-regional trade.
“It cannot be that (foreign) capital comes and goes, damaging us all. When it doesn’t find speculative benefits in one country, it ends up finding them in another” said Colombian president, Manuel Santos.
Colombian Finance Minister, Juan Carlos Echeverr, also suggested the creation of a regional monetary fund in view of the instability of the US dollar and the Euro.
The proposals will now be considered more fully be each independent member state and discussed at the South American Economic and Finance Council, due to take place this coming Friday 12th August in Buenos Aires. One of the main items on the Council’s agenda will be the creation of a UNASUR Board of Economy and Finance; a new initiative that would allow the regional bloc to address problems cooperatively and from a unified stance.
Deepening Regional Integration
Ministers and attendees cited the record time in which the meeting was organised as proof of increased integration and cohesion within the Latin American continent. On the 28th of July, an emergency UNASUR meeting was also held in Lima in order to contemplate the possibility of a U.S. default on its national debt.
Argentinean Finance Minister, Boudou Amado, highlighted that South America’s collective efforts at regional integration were becoming “more and more important” and must be “deepened so that we are not affected by external crises”.
Following the July meeting, UNASUR also reiterated its commitment to ensuring social inclusion and poverty eradication within the region, as well as its support for Venezuelan president Hugo Chávez in his current personal battle with cancer.
President Chávez highlighted that although the Venezuelan economy was not immune from the financial troubles developing in the United States and Europe, the country’s economy was in a strong position.
“We have been preparing for years now, and we have a solid economy and surplus international reserves, like Evo (Morales) said, the U.S. is broken,” said the Venezuelan president.
“It is a very serious situation for the capitalist world…it indicates that the world should re-orient and liberate itself from the dictatorship of the dollar,” he added.