Revolution or evolution?

Date: 11/05/06

Observers might be forgiven for thinking that the EU would be pleased with the recent frenzy of co-operation in Latin America.

For three decades the EU has promoted regional integration through Mercosur, the Andean Community, the Central American Integration System (SICA), CARICOM, the Rio Group and a host of other acronyms.

But then, 'ALBA' is not exactly what the EU has in mind when it talks about regional integration. The so-called Bolivarian Alternative for the Americas - known under its Spanish short-form ALBA - is Cuba, Venezuela and Bolivia's answer to perceived US meddling in the region and to a Washington-backed free-trade agreement for the Americas.

The arrival of Evo Morales at the peak of Bolivian politics has allowed the more permanent fixtures on the continent's political scene - Cuba's Fidel Castro and Venezuela's Hugo Chávez - to form an increasingly significant anti-US alliance.

With the help of oil and gas wealth, countries such as Bolivia and Venezuela can pursue an independent course as never before.

Morales's recent announcement that Bolivia's gas industry will be nationalised is the latest evidence of this trend.

Some observers see this new-found Latin American assertiveness as an opportunity for the EU to deepen its dialogue with the region.

They point to declining US influence as heralding the end of the 1823 Monroe doctrine - under which the US would stay out of Europe's business provided that Europe would not interfere in the Americas.

But there are others who fear a rising populist sentiment, illustrated by Morales and the swing to the left in many other South American countries, may hurt not only the US, but also the EU and regional stability.

Brazil, through its energy firm Petrobras, is predicted to be the big loser from Morales's decree.

Few are concerned about what Bolivia's actions will mean for EU energy supplies. But more volatility in world energy markets is not welcomed and makes EU diplomatic efforts vis-à-vis Iran and Russia all the more difficult.

"The decision taken by the Bolivian government will not have an impact on the physical security of supplies to the EU," a European Commission spokesperson in charge of energy said this week.

"[But] the decision of the Bolivian government may have a negative impact on markets because the markets are now subject to considerable pressure as far as prices are concerned," the spokesperson added.

EU companies such as the Spanish energy firm Repsol, the French firm Total and the UK's BP are also affected by the decision. So the upco- ming EU-Latin America/ Caribbean summit in Vienna on 12 May looks likely to be overshadowed by these recent events.

Many governments are likely to want clarification on exactly what Morales's decree means. Bolivia's use of the army to occupy gas and oil facilities has only served to heighten tensions further.

Some are beginning to question whether ALBA could shatter the balance of power which underpins regional integration.

The South American Community of Nations, set up in 2003, on which many hopes rest, would have united the Andean Community (Bolivia, Colombia, Ecuador, Peru and Venezuela) in the north and Mercosur (Argentina, Brazil, Paraguay and Uruguay) in the south, creating an EU-like entity.

It is an ambitious project, with the states trying to set up a common currency, parliament and passport by around 2019.

Like the EU, it would have more than one headquarters - one in Lima and a central bank in Brasilia.

Whether all this could be achieved while such divergent views of the continent's future exist, is a question that the EU will have to face when deciding its strategy towards Latin America.

This article looks at recent political developments in Latin America, where Cuba, Venezuela and Bolivia propagated their so called Bolivarian Alternative for the Americas, opposing perceived US influence in the region and pursuing a strategy of independence relying on their countries' natural resources.
Article is part of a European Voice Special Report, 'EU-Latin America'.