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By MARLON DE SOUZA*

The economic development of Brazil and the Global South based on analytical thinking specific to the South

The Latin American peoples are heard at the 3rd Summit of leaders of the Community of Latin American and Caribbean States (CELAC) and the European Union (EU) which is being held in Brussels this week on the 17th and 18th of July. Brazilian President Luiz Inácio Lula da Silva participates in the meeting. The event brings together leaders from the 33 countries of the Community of Latin American and Caribbean States (CELAC) and the 25 of the European Union (EU). In his speech at the meeting with the Business Forum of the European Union, president Lula presented his concept of Latin American unity that “Brazil will only grow sustainably with integration into our regional environment”.

President Lula defended a Celac-UE agenda of peace, defense of democracy, cooperation, expansion of trade and investment in job creation and sustainable growth.

The Egyptian Marxist economist Samir Amin (2003) warned of the risk of neglecting (or underestimating) the power with which the global framework imposes limits on the desired internal transformations in countries. Amin points out that many of the communist parties (through which “historical Marxisms” were expressed), but also a large proportion of workers' parties, socialists and those originating from national liberation movements, suffered serious defeats as a result of this underestimation.

At the same time, it is necessary to understand the relevance of inter-state and inter-party institutional relations and that, fundamentally, the State is and will remain for a long time the main actor that occupies the foreground of the scene, above national realities (and conflicts and “balances” – solid or fragile - that result from them), and appears in the world system as the active agent par excellence of its elaboration for the constitution of a trajectory of the left, democratic and social and of a project of national and popular development, associating in a complementary and conflicting way the capitalist logics of the market and the social logics inscribed in a perspective of gradual interruption of the submission of foreign relations to the demands of this driving logic to neocolonialist demands in order to reduce social and regional inequalities.

In his speech at the opening of the meeting of the 3rd Summit of CELAC-EU leaders, he affirmed this position that “we have to find ways to overcome the asymmetries of economic and social development. Resource mobilization and investment initiatives are welcome and should include technology transfer and real integration of production chains. We need a partnership that puts an end to an international division of labor that condemns Latin America and the Caribbean to the supply of raw materials and poorly paid and discriminated migrant labor”.

On the level of theoretical reflection, left-wing intellectuals have the task of demonstrating to the set of coalitions of social forces with the aim of providing political action with the meaning of the interaction between internal dynamics (of adjustment or confrontation) and global dynamics. (of imperialist capitalism). Amin considers that the action, to be effective, must be able to become the action of the “masses in movement”, and these are crystallized in historical forces first in the planes defined by the structure of the component societies of the world society.

In this perspective, the science produced in the field of world political economy for the economic development of the Global South is constituted, based on analytical thinking specific to the South. Many studies from the most diverse areas of specialized knowledge consider the States as constituting a category in itself, regardless of the specific political content that defines and directs the State throughout the successive stages of the historical conjuncture.

The paradigm of the “world economy” theory, for example, emerged precisely to correct the abusive fixation on local dynamics and to highlight the global logics that frame and limit them. The “world-economy” (Wallerstein, Arrighi, Frank, Amin) identifies the dominant global determinations, which are imposed on national and regional internal dynamics, which, if neglected by left-wing governments and parties, for this very reason, will be paralyzed in the possible changes in course produced by internal transformations, plunging it into regression.

On the other hand, and at the same time if left-wing governments and their parties are aware that internal conflicts – social and political – determine the policies (economic and otherwise) that are imposed on States and that have great weight on the strategies that States develop in the fields of globalized reality, transformations for the better will advance and strengthen the autonomous capacities of a society and its own nation-states to act.

The trade agreement under discussion between the EU and Mercosur is relevant for the economy of the Latin American continent, the European market is the second destination of all exports from Brazil. According to the Ministry of Development, Industry, Commerce and Services Secretariat of Foreign Trade (MDIC) in 2022 the trade balance between Brazil and the EU closed in a surplus of US$ 51 billion for Brazil, second only to international trade relations between Brazil and People's Republic of China (US$91 billion) and relatively little above Brazil's individual transactions with the United States (US$37,4 billion).

The EU-Mercosur agreement was not formally discussed at the summit meeting, but was mentioned in a speech and in parallel meetings between various Celac-UE leaders. Brazil's 2021 trade chain with the EU is estimated to exceed US$ 100 billion The President of the European Commission, Ursula von der Leyen, announced this Monday morning (17) that the European Union will invest an additional €45 billion (R$242 billion) in Latin America and the Caribbean, as part of the program global gateway (EU investment program in infrastructure, climate and digital projects to strengthen Europe's supply chains, boost EU trade and help tackle climate change).

However, it is fundamental that foreign investments in Brazil are really linked to the promotion of infrastructures linked to environmental sustainability and economic independence, as well as the revolution of the digital transition of high performance, energetic and ecological.

However, the current format of the EU-Mercosur agreement proposed by the European Union is “unacceptable”. President Lula has already taken a public position that Mercosur does not give up government purchases when referring to an article in the agreement between the blocs that governs the participation of European companies in public biddings by Latin American states because these are one of the political devices for and to develop medium and small entrepreneurs in these countries.

At the opening of the 3rd Summit of Celac-UE leaders, he reaffirmed that “we want to ensure a fair, sustainable and inclusive trade relationship. The conclusion of the Mercosur-EU Agreement is a priority and must be based on mutual trust and not on threats. The defense of environmental values, which we all share, cannot be an excuse for protectionism. The State's purchasing power is an essential tool for investments in health, education and innovation. Its maintenance is a condition for the green industrialization that we want to implement”.

On other occasions, President Lula has also declared that Mercosur has no interest in trade agreements that condemn South American countries to be “eternal exporters of raw materials, ore and oil”. And this is imperative to boost neo-industrialization, economic development and overcoming underdevelopment in Brazil and throughout Latin America and the Caribbean.

In this era of the globalization of capital, North-South economic relations are one of domination/subordination or they can be one of competition and complementarity between countries, regions and blocs that can be established - not by the freedom of the market -, but based on decisions and struggles politics of the social classes that direct the national states of the Global South.

Also according to the MDIC, in 2022, the highest percentage of Brazil's total export basket in 2022 were primary products, commodities, agricultural products and mineral extractivism; soybeans, crude petroleum oils, iron ore and concentrates, fuel oils from petroleum or bituminous minerals, unground corn, fresh, chilled or frozen beef, sugars and molasses, soybean meal and other animal foods, meat poultry and edible offal, fresh, chilled or frozen and unroasted coffee.

Spanish Prime Minister Pedro Sanchez, whose country will preside over the presidency of the European Union for the next six months, expressed this Monday (17) that he wants the EU-Mercosur trade agreement to be concluded by the end of 2023 and summarized that the commercial pact between the two regions is the European Union offering capital, technology and know-how in exchange for “energy, abundant raw materials, sun, fertile soil and water” from Mercosur.

The objectives of imperialism and dominant capital remain the same as at the beginning of the XNUMXth century – controlling the expansion of markets, plundering the planet's natural resources, super-exploitation of labor reserves in the periphery – although also operating in new conditions and in the current phase of neoliberal capitalism in its structure of reproduction supported by financialization and rentism.

Periphery are countries that are not at the center of international capitalism, that is, they are on the periphery. According to Samir Amin (2003) countries and regions that do not locally dominate the accumulation process, which is, therefore, mainly defined by external constraints. The peripheries are not, for this reason, “stagnant”, despite the fact that their development is not similar to that which characterizes the centers in the successive stages of the global expansion of capitalism. The bourgeoisie and local capital are not necessarily absent from local social and political life.

The Egyptian economist demonstrates that the hierarchy of the world economy is defined by the level of competitiveness of its production in the world market and that this “competitiveness” is the complex product of a series of conditions operating in the field of reality as a whole – economic, political and social. . In this framework, the center/periphery asymmetrical relations built by the development of imperialism are based on the “monopolies” of which the centers are the beneficiaries.

Samir Amin tells that during a century and a half that extends from the industrial revolution (beginning of the 1970th century) to the end of the cycle that follows the Second World War (around 1980-XNUMX) the monopoly in question was that of industry. The center/periphery contrast was then practically synonymous with the contrast between industrialized countries/non-industrialized or semi-industrialized countries. The Marxist economist describes how a particular form of the Law of Globalized Value (which distinguishes it from the Law of Value “in general”) defined by this contrast then governed the reproduction of the system in its entirety.

Therefore, this did not mean at all that the peripheries were effectively engaged in a process of “catching up with backwardness”, as proclaimed by the ideology of development. Because the centers were reconstituting themselves through the implementation of “new monopolies” in the face of the industrialization of the peripheries.

Economist Giovani Arrighi (1997) complements from studies and characterizes the periphery as a structure that conforms the “organic core-periphery (…) of networks of 'unequal exchange', through which some States (frequently identified as 'industrial' or 'industrialized') appropriate a disproportionate share of the benefits of the international division of labor, whereas most other states reap only those benefits that are necessary to keep them in the unequal exchange relationship. It is said that the former constitute the 'organic core' of the world capitalist economy and the latter constitute its 'periphery'. Semiperipheral states (often referred to as “semi-industrial” or “semi-industrialized”) are therefore defined as those states that occupy an intermediate position in this network of unequal exchange: they reap only marginal benefits when they enter into exchange relationships with states. core, but reap most of the net benefits when they establish exchange relationships with peripheral states.

 

Neo-industrialization and sovereignty in Latin America

For Latin America and the Caribbean to stop being exporters of primary products and start to neo-industrialize and export manufactured products with high added value, Latin American regional integration is essential. sine qua non. In the last six years, Latin America has been governed by right-wing governments and by neoliberal policies and the promotion of an entire policy of Latin American disintegration and the absence of industrial policies, reverting the entire subcontinent to an agro-ore exporting pole and subordinating the countries in the global value chains imposed by the countries at the center of capitalism.

These constraints nullify the reach of industrialization in the peripheries, devalue the productive work incorporated in their productions at the same time that they overestimate the alleged added value relative to the activities through which the new monopolies operate, favoring the centers. In this way, they produce a new hierarchy in the distribution of income on a world scale, more unequal than ever, they subordinate the industries of the periphery and reduce them to the status of outsourced activities.

The failure of neoliberal economic policies by right-wing governments in Latin America gave rise to a new cycle of progressive governments in the region. Currently, 12 of the 19 countries in Latin America are governed by the left – responsible for 92% of the population and 90% of GDP. In other words, the correlation of forces is favorable for the resumption of Latin American integration.

Economist from the Institute of Applied Economic Research (IPEA) Pedro Silva Barros (2023) reports that in Latin America, especially in the southern part, mainly in Brazil and Argentina, we have experienced a sharp process of deindustrialization in recent years. The industry in the process of regional integration is fundamental.

The main reason is that industry has a much greater multiplier effect on our economy than primary export sectors. Every dollar that the region trades within the region generates many more jobs and better jobs than every dollar or other currency we trade outside the region. The average price per ton of intraregional trade is over a thousand dollars, the average price per ton that we export, for example, to Asia-Pacific is 260 dollars.

Therefore, central planning by the State is necessary to guide the process and set in motion a paradigm of sustainable development, a transition that does not exclude private property or private investment, but induces it to follow a path to serve the needs of popular consumption. and the demands of modern social reproduction at a fair and sustainable world level.

 

China and the integration of Latin America

Thinking about reindustrialization necessarily involves thinking about productive articulation with neighboring Latin American countries, it necessarily involves planning the integration of regional production chains and the establishment of global value chains that have an immense social impact with energy and infrastructure integration.

Of exports to South America and Latin America, 80 to 905 are manufactured goods. We export 33% of manufactured goods to Europe, 50% to the USA, 3% to China. China is Brazil's main trading partner and the countries of Latin America and the Caribbean as a whole – except for Mexico – but what we export there continues to have very low added value.

An alternative to effect the logistics and production integration of Latin America is the formal adhesion of Brazil to the Belt and Road Initiative (Belt and Road Initiative – BRI), or New Silk Road also now called One Belt, One Road (One Belt, One Road). The New Silk Road makes up the PRC's foreign policy which it calls “development shared by all”. The joint construction of the initiative of a common route for common development are public goods offered by the PRC to the international community and constitute open platforms for us to achieve common development and prosperity.

According to the PRC, in the last 10 years since its launch, the New Silk Road has already accounted for U$ 1 trillion in investments in the form of 3 cooperation projects, the generation of 420 jobs in partner countries and the construction of roads, bridges and the possibility of accelerating development in these countries.

So far, 17 countries have joined or expressed an interest in joining this plan. In Latin America, 20 countries are already part of the initiative. In April, Argentina signed a memorandum of understanding with the PRC government for accession. Brazil has not yet joined.

But as part of a planned, planned integration of Latin America into global value chains and raising the position of our subcontinent in the international division of labor, the New Silk Road is an opportunity negotiating environmental sustainability, financing with extremely attractive interest rates, transferring technology and production of manufactured goods with high added value with defined medium and long-term export contracts for the domestic market of the PRC and access to Brazil and Latin America to constitute, at the same time, integration and productive autonomy of the region and the constitution of expertise in Industry 4.0 and Artificial Intelligence.

In addition to accelerating Latin America's economic development, it would be an advanced political action for the unity of the Global South and the affirmation of multilateralism. Arrighi (2008) points out that China becomes the center of a new cycle of accumulation without seeking military domination of the world, but inaugurating a “new Bandung” (union of countries not aligned with any of the imperialist blocs) that could “mobilize and use the global market as an instrument for equalizing power relations between North and South”.

 

CELAC, UNASUR, MERCOSUR: practical institutional unit

For Arrighi, the capacity of a State to appropriate the benefits of the world division of labor is mainly determined by the political direction of the State by its position, not in a network of exchanges, but in the dispute to initiate and control productive and innovation processes or to protect them. from the negative effects of innovation processes initiated and controlled by others.

The Latin American unity that is being directed by President Lula is not only declarative, but is built around a program and political practice and, above all, Lula proposes, institutionalization. This modern practical institutional arrangement in South America is recent, it is just over 20 years old, interrupted by right-wing governments, most of them submissive and fundamentalist to the interests of the United States to the detriment of their own peoples.

On May 30, Brazilian President Luiz Inacio Lula da Silva held a meeting with all South American heads of state in Brasilia. The objective of this summit was to carry out “the economic and political integration of South America, Latin America and the Caribbean and create a multilateral institution capable of giving organic density to our relations with other economic blocs”, said President Lula in his opening speech. .

Present were the presidents of the Argentina, Alberto Fernández, from Bolívia, Luis Arce. Chile, Gabriel boric, from Colombia, Gustavo Petro. Equador, William Lasso, from Guyana, Irfaan Ali, from Paraguay, Mario Abdo Benítez, from Suriname, Chan Santokhi, from Uruguay, Luis Lacalle Pou, and Venezuela, Nicolás Maduro. The exception was the president of Peru, Dina Boluarte, who for constitutional reasons and the instability of the Peruvian government sent the president of the Council of Ministers, Alberto Otárola, to the country.

By receiving the President of the Bolivarian Republic of Venezuela, Nicolás Maduro, with head of state honors and re-establishing diplomatic, political and economic ties with this neighboring country, he has definitely raised Brazil's foreign relations to a high level.

In defense of the sovereignty of South America, Latin America and the Caribbean, President Lula affirmed, paraphrasing the intellectual and leader of the Workers' Party, Marco Aurélio Garcia, who died in 2017, that: “politics is not destiny, but human construction based on given historical conditions. Integration will be done with respect for difference, because there is no longer any room for the homogeneity of submission”. And he pointed out, quoting the former ambassador and former secretary general of the Itamaraty Samuel Pinheiro Guimarães that “we need to refuse to spend another five hundred on the periphery”.

 President Lula, in his speech at the meeting with the presidents, gave a class on how a statesman acts, on diplomacy, on understanding the function of the national State and on World Political Economy. He reported that it was only at the end of the XNUMXth century that a series of initiatives emerged aimed at articulating actions at the sub-regional level; Andean Community of Nations, the Amazon Cooperation Treaty and Mercosur.

Lula described that it was President Fernando Henrique Cardoso in 2000 who convened the first Summit of Presidents launched which resulted in the Integration of South American Regional Infrastructure (IIRSA) for the convergence between Mercosur and the Andean Community. Chile, Guyana and Suriname have also engaged in this effort.

Lula pointed out that the decisive impulse was the formation of the South American Community of Nations (CASA), the result of the meeting of leaders in Cusco, Peru, in 2004. Consequently, several annual meetings of heads of state were held, among other milestones, those of Brasilia (2005) and Cochabamba (2006). CASA was just a forum, with no permanent structure. After a new Summit, in Isla Marguerita, Venezuela, an organization was formed with its own legal personality, headquarters and secretariat.

Fifteen years ago, on May 15, 28, the Union of South American Nations (Unasur) was established at the Itamaraty Palace in Brazil and progress was made in institutionalizing our relationship with bodies such as the Summit of Presidents, the Council of Chancellors and Parliament South American and 2008 sector councils. Currently, Unasur comprises Brazil, Argentina, Guyana, Suriname and Venezuela. Colombian President Gustavo Petro announced on May 12 that he had decided to integrate his country into Unasur through a bill sent to Congress.

At the meeting in Brasilia, questions from some South American presidents about the maintenance of Unasur or its current format were listed. There is doubt about keeping the name or about the need to create a new institution. The president of Colombia, for example, proposes the name of Unasur for the Association of South American Nations "to guarantee pluralism and permanence in time". President Lula has explained that Unasur is for the South American countries to act as a bloc in order to have more strength in international trade relations without interfering in the interior of the national States' policies.

As a follow-up, the presidents' meeting deliberated on the creation of a high-level group composed of specialist personal representatives and chancellors of each President to elaborate on the format and functioning of the forum that would allow for fluid and regular discussions and guide the actions of our countries towards the strengthening of South American integration in several of its dimensions. This group was given 120 days (from May 30th) to present an institutional proposal for the integration of South America.

Although this integration process has been interrupted for a short time and has already demonstrated objective results, it is necessary to advance, for example, with the institution of regional trade with a common currency or with national currencies, because currency is part of national sovereignty. “If we have our currency together with other countries to discuss our trade relationship, it's a good thing and it won't hurt the US because they will continue with the dollar. The difference is that we will not be hostage to a currency that only the US has the machine and can produce, we will have a currency that we can issue by other Mints'”, declared President Lula.

*Marlon D'Souza, journalist, is a master's student in world political economy at UFABC.

References

AMIN, S. (2003). Imperialism, Past and Present. Time, no.18.

ARRIGHI, G. (1997). The Illusion of Development. Petropolis: Voices.

MARTI, Jose. Our America. Translation by Maria Angélica de Almeida Triber. São Paulo: HUCITEC, 1983.254p. p:194-201. (Original text from 1891)

Lecture by economist Pedro Silva Barros, at the XXVI Foro de São Paulo, Brasília, 2023.


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