The Foundations for Regional Integration
03 April 2006
Article written by President Luiz Inácio Lula
da Silva, published in O Estado de São Paulo on 3
April 2006.
Ever since my government came to power a little more than three years ago I have dedicated myself to the task of achieving greater unity between the countries of Latin America, and especially those of South America. I am convinced that our countries will only overcome the challenges posed by development and social inequality if they prove capable of speaking with one voice in the international arena, and of pooling their economic and productive potential. Past experience teaches us that the only way forward is to unite and integrate our economies and societies.
I have consistently argued that in order to generate the increase in regional trade that we all desire, the important trade agreements that are already in place need to be accompanied by effective energy, transport and communications links between our countries. The efficient circulation of goods and services depends on regional integration in terms of physical infrastructure: here lies the key to the creation of productive chains and genuinely regional industries that will enable our countries to compete in an increasingly globalized world economy.
Though this unprecedented effort to build an integrated infrastructure we are creating new employment and opportunities, and benefiting the populations of areas which until now have remained isolated from the central hubs of South America’s national economies – for example Amazonia and the border regions. The primary aim of integration is to improve our populations’ standard of living, to reduce poverty and give substance to the idea of citizenship.
We are pushing ahead with a series of projects that constitute the basis for a genuine South American community. Each country has proposed at least two projects to make up the agenda of the Initiative for Integration of Regional Infrastructure in South America (IIRSA). These initiatives clearly have multiple positive impacts: they will attract investment, generate business, modernise our productive capacity and create a large number of jobs.
Innovative steps need to be taken in order to finance these shared endeavours, entailing a shared commitment on the part of governments, the private sector, and national and regional funding agencies. The Brazilian government has been playing its part. Through the National Economic and Social Development Bank (BNDES) and the Export-Financing Programme we are promoting exports which have a positive impact in terms of regional integration. Brazil has contributed to the financing of 41 projects which are either already underway or at an advanced stage of negotiation, the overall investment in which totals US$4.2 billion. The Andean Development Corporation (ADC) has also played an important role in making these projects possible, both by means of direct financing and credit guarantees. In 2005 Brazil decided to become a full member of the ADC, and increased its supply of capital to the institution. The Latin American Integration Association's Reciprocal Credit Convention has proved to be another important tool in the implementation of these regional finance initiatives.
However, given the scale of the challenge that faces us in attempting infrastructural integration, the existing means of providing finance, and the total funds available, are insufficient.
The decision to place these issues at the top of the agenda at the meeting of the Inter-American Development Bank (IDB) Governors' Assembly – taking place in Belo Horizonte, Brazil, from the 3rd to the 5th of April – was therefore very opportune. Since its creation in 1959 the IDB has been contributing to the work of bringing together our continent’s public and business sectors in the search for creative means of financing economic and social development. In the conversations I have had with the new IDB president, Luis Alberto Moreno, we have agreed on the high importance that must be given to the subject of infrastructure. I am quite sure that the meeting in Belo Horizonte will serve to confirm our shared purpose, and will create new opportunities to fulfil our continent’s great potential in terms of integration orientated towards social development.
Ever since my government came to power a little more than three years ago I have dedicated myself to the task of achieving greater unity between the countries of Latin America, and especially those of South America. I am convinced that our countries will only overcome the challenges posed by development and social inequality if they prove capable of speaking with one voice in the international arena, and of pooling their economic and productive potential. Past experience teaches us that the only way forward is to unite and integrate our economies and societies.
I have consistently argued that in order to generate the increase in regional trade that we all desire, the important trade agreements that are already in place need to be accompanied by effective energy, transport and communications links between our countries. The efficient circulation of goods and services depends on regional integration in terms of physical infrastructure: here lies the key to the creation of productive chains and genuinely regional industries that will enable our countries to compete in an increasingly globalized world economy.
Though this unprecedented effort to build an integrated infrastructure we are creating new employment and opportunities, and benefiting the populations of areas which until now have remained isolated from the central hubs of South America’s national economies – for example Amazonia and the border regions. The primary aim of integration is to improve our populations’ standard of living, to reduce poverty and give substance to the idea of citizenship.
We are pushing ahead with a series of projects that constitute the basis for a genuine South American community. Each country has proposed at least two projects to make up the agenda of the Initiative for Integration of Regional Infrastructure in South America (IIRSA). These initiatives clearly have multiple positive impacts: they will attract investment, generate business, modernise our productive capacity and create a large number of jobs.
Innovative steps need to be taken in order to finance these shared endeavours, entailing a shared commitment on the part of governments, the private sector, and national and regional funding agencies. The Brazilian government has been playing its part. Through the National Economic and Social Development Bank (BNDES) and the Export-Financing Programme we are promoting exports which have a positive impact in terms of regional integration. Brazil has contributed to the financing of 41 projects which are either already underway or at an advanced stage of negotiation, the overall investment in which totals US$4.2 billion. The Andean Development Corporation (ADC) has also played an important role in making these projects possible, both by means of direct financing and credit guarantees. In 2005 Brazil decided to become a full member of the ADC, and increased its supply of capital to the institution. The Latin American Integration Association's Reciprocal Credit Convention has proved to be another important tool in the implementation of these regional finance initiatives.
However, given the scale of the challenge that faces us in attempting infrastructural integration, the existing means of providing finance, and the total funds available, are insufficient.
The decision to place these issues at the top of the agenda at the meeting of the Inter-American Development Bank (IDB) Governors' Assembly – taking place in Belo Horizonte, Brazil, from the 3rd to the 5th of April – was therefore very opportune. Since its creation in 1959 the IDB has been contributing to the work of bringing together our continent’s public and business sectors in the search for creative means of financing economic and social development. In the conversations I have had with the new IDB president, Luis Alberto Moreno, we have agreed on the high importance that must be given to the subject of infrastructure. I am quite sure that the meeting in Belo Horizonte will serve to confirm our shared purpose, and will create new opportunities to fulfil our continent’s great potential in terms of integration orientated towards social development.