Star backing for Andean forum

Date: 21/05/1998

By Mark Turner

THE five-nation Andean Community will burst on to the European scene with all guns blazing at a star-studded 'Euro-Andean Forum' in London next week.

Those present will include Latin American Commissioner Manuel Marín and BP chairman Peter Sutherland.

The meeting, which has been preceded by a maelstrom of lobbying, slick brochures and Internet websites, marks a concerted public relations push by the Andean countries to dispel the region's image as one of the world's most corrupt and violent areas, and to attract new EU investment.

According to the forum's website, "the five countries that make up the Andean Community have left behind them a decade of crisis and stagnation, and are embarking upon a new phase in their history - 'the new Andean reality'."

It goes on to claim that the region's previously closed-door, protectionist economies have been replaced with a transparent and market-driven 'open regionalism', brimming with opportunities for the resourceful entrepreneur.

The forum, paid for by the European Commission, is an ambitious endeavour. The Andean Community, a crescent-shaped group comprising Colombia, Venezuela, Ecuador, Peru and Bolivia which was previously known as the Andean Pact, for many years represented the antithesis of stable prosperity - and its champions will have their work cut out to convince anyone otherwise.

Its 100 million inhabitants have a yearly gross domestic product of under 200 billion ecu, and include some of South America's most destitute populations.

Bolivia's per capita production languished at 750 ecu in 1996, making it one of the world's poorest countries outside Africa and developing Asia. Ecuador and Peru were at war in 1995 and are only just now concluding official peace terms. Political and economic crises in Venezuela, Colombia and Ecuador in the mid-1990s have severely destabilised any efforts at regional integration, and Peru almost pulled out of the Community altogether last year, prompting widespread predictions that it would collapse.

Although the crisis ironically ended up creating a stronger Community in 1998, according to analysts, uncertainty in the region remains high ahead of a spate of elections this year.

Armed guerrillas control vast swathes of territory in Colombia and beyond, and corruption is rampant.

Berlin-based Transparency International ranked Venezuela, Colombia and Bolivia as the 44th, 50th and 51st least honest countries out of 52 in their 1997 league table of corruption as perceived by the business community.

Compounding such problems, the freak weather pattern El Niño has wreaked havoc this year, causing catastrophic floods in Peru and Ecuador, drought and fires in Colombia and Venezuela, and a mixture of both in Bolivia. The economic cost, although difficult to quantify, has been enormous.

Nonetheless, the enthusiasm with which the institutions of the Andean Community are trying to cast these difficulties aside and court international favour is infectious.

"Today, you will find a new-look Andean Community in a new economic reality," says the organisation's secretary-general Sebastián Alegrett.

"It is a modern, dynamic institution, consisting of well-considered professionals from all the sub-region's countries."

The Community's presidential summit in Ecuador this year appeared to endorse this sense of rebirth, launching a flurry of initiatives to boost regional integration.

In the 'Guayanquil declaration', the Andean countries undertook to create a customs union, including free trade in services by 2005; design a common foreign policy; jointly stamp out drug production; boost infrastructure; and address the region's severe social problems.

Looking beyond their borders, they have also agreed to enter into free trade with the southern cone bloc Mercosur by 2000 and are taking full part, albeit with special treatment, in the free trade zone of the Americas.

In addition, a framework agreement with the EU signed in 1993, which both sides hopes will stimulate cooperation over a wide range of economic and political activity, finally came on line this month.

The message is clear: the Andean Community cannot afford to become any more isolated from the global market, and its leaders know it.

"The Andean Community is a reality, a union of sovereign states, which have problems, a common past and common realities, that is desperately seeking joint solutions that we would perhaps not be able to achieve individually," said Ecuadorian President Fabian Alarcon.

That message seems to have fallen on relatively deaf ears in Washington, whose policy-makers appear more concerned with burning cocaine fields than stimulating genuine economic recovery in the region.

But Andean diplomats say the European Union has been a surprisingly good friend to the troubled bloc, providing around 150 million ecu a year in development assistance and, more importantly, giving tariff-free entry to a large number of its agricultural and industrial exports.

This special generalised system of preferences deal, instigated two years ago to encourage the region to diversify away from drugs production, has become the centrepiece of Euro-Andean relations. Not surprisingly, the Latin Americans are desperate for it to be maintained after the year 2000.

"Over the next few months our first challenge is to renew our preferential access," says Colombia's ambassador to the EU José Antonio Vargas. "The next is to bring European and Andean companies together."

Next week's forum is one step in that direction.

Preview and reports of 'Euro-Andean Forum', London, May 1998.