Courtesy of Reuters
Since Lula took office as President of Brazil in January of 2023, he’s taken notable action to accomplish his goals. In May, the South America Summit met in Brasilia and brought with it leaders of every South American country except French Guinea. The hope was that the integration of South America into the global stage would be discussed. Lula attended a summit for the Community of Latin American and Caribbean States in place of the World Economic Forum in favor of a trip to Buenos Aires in April, speaking clearly to Brazilians and other Latin Americans that while a global presence is important, he will prioritize helping his community first.
Lula also hopes to reunite MERCOSUR, which he worked hard on during his first two terms. Since then there has been a decline in economic success, but he believes that agreements between MERCOSUR and major economic powers like the European Union and China can put South America on the map.
With a rising political left and Lula’s return, South America has a chance to reunite.
What are UNASUR and MERCOSUR?
UNASUR was first created in 2008 as a union of South American Nations hoping to focus on democracy, education, environment, and unity. At the time of its founding, it boasted 12 members and Panama and Mexico as observers, but this has since changed. Initially, UNASUR fared well with large public support and diplomatic relations between the nations, but the subtle decline of democracy in the region, such as the 2009 coup in Honduras and the impeachment of Fernando Lugo in Paraguay in 2012 began to cause a rift.
After a year and a half without a secretary general and difficulty uniting on political stances, Argentina, Brazil, Chile, Columbia, Paraguay, and Peru left UNASUR in April of 2018, ten years after it had been founded.
MERCOSUR was founded in 1991 as an economic trading block containing Argentina, Brazil, Paraguay, and Uruguay, plus the associate members: Bolivia, Chile, Columbia, Ecuador, Guyana, Peru, and Suriname. The goal was to create a common market similar to the EU, but the vision has struggled to come to life. Economic crashes in Brazil and Argentina stifled progress, and the free movement of goods and services was not enough. Similar to the situation with UNASUR, there was a conflict of politics with the situation in Venezuela, and it was ejected in 2016.
With trade deals under work with China and the EU, MERCOSUR has the potential to create economic growth as it did in its early days. With current economic conditions in South America being at a low point, there is support for the reconstruction of the bloc to be restored.
The people of South America are ready for unity and progress, but they need it to be done well. UNASUR and MERCOSUR are good on paper, but both struggled to achieve their goals due to divisions and tensions in the region that don’t seem to let up.
Ideological Differences and the Everlasting Divisions in South American Politics
Between 1964 and 1990, South America suffered at the hands of military coups followed by dictatorships. The three largest powers were Brazil, Argentina, and Chile. Foreign intervention in the continent came as the result of fear that leftist leaders and communism would spread, causing the opposite and harming tens of thousands of citizens along the way.
In 1990, all dictators had been replaced by democratically elected governments. Pinochet, the Chilean leader, was the last to fall. In the aftermath of the turmoil and revolutionary changes, economic and social damage needed repairing— the “pink tide” had begun. South America had been under strenuous circumstances for 15 years and needed unity and support after the countries individually took strong stances on democracy.
While the “pink tide” may not have been strong enough to limit Maduro, the current ruler of Venezuela, and other right-wing politicians that came to power in the early 2010s, it has made its way back around in the past couple of years to fight dictatorships. Maduro is the only current dictator on the continent, and despite being a left-wing politician, he is met with disapproval. Left-wing, democratically elected leaders have risen in Bolivia, Brazil, Argentina, Columbia, Chile, Honduras, Peru, and Mexico.
These tensions over dictatorships and democracy have not ended. Lula has voiced support for Maduro, the leader of Venezuela, aiming for inclusion and unity; however, the authoritarian nature of Maduro’s rule is creating conflict with other world leaders. Many see Lula’s actions as an act of compliance and unwillingness to speak up for equal rights. Tensions have remained high in the past two decades with a pink wave in the early 2000s, followed by a rise in military dictatorships, and another rise of left-leaning governments now.
An overall decline in democracy in the region in the early 2010s led to challenges between heads of state due to the prior regional consensus on democracy and the willingness to defend it dwindling.
Economic Turmoil
Poor economic management in the 1960s and 70s led to a sharp decline in economic prosperity, subjecting South America to the debt crisis of the 1980s. Per capita, income was the same at the beginning of the decade as it was at the end, with some countries experiencing recessions for three consecutive years. This led to a more outward approach and strength in policies.
While external factors play a large role, much of the economic struggle is unavoidable. Over 70% of the region is located in the tropics, the law system changed from common law to civil law, large-scale plantations, institutional arrangements, and linguistic and cultural barriers. So, while economic turmoil is not the reason that South America struggles to become united, the lack of unity may be the reason behind some economic challenges.
Rising inflation across the world doesn’t discriminate. South America is seeing rapid inflation but hopes to combat it quickly by raising interest earlier in an attempt to get ahead of the curve. Prices for commodities in countries like Brazil and Colombia have skyrocketed and inflation reaches a two-decade high of 10%. Inflation forecasts are high, economic vulnerability is raging, and the health of banking systems that withstood the 2008 financial crisis is being put to the test. The hope is now that the unity the region is searching for will better prepare the region to survive
Brazil as a Leader
Luis Ignacio Lula de Silva, better known to many as Lula, began his third term as president of Brazil on January 1, 2023. Lula boasts progressive ideas born out of the military government in Brazil pre-1980. He assumed office for his first term on January 1, 2003, becoming the first leftist president following the fall of the military dictatorship in Brazil, serving until 2011. Lula used his role to aid in negotiations regarding Venezuela, Columbia, and Ecuador and strengthen MERCOSUR. He befriended both Hugo Chavez and George W. Bush, showing versatility and desire for peaceful relations to create positive change. Economic development and trade increases led Lula to be a pragmatist in the region and use his increased stature in the Southern Hemisphere to boost regional advancement.
Taking office after two right-wing leaders, Lula marks the start of a turning point, however challenging, in Brazil. Mistrust and polarization have increased with fears of his high ambitions, but the peril of democratic loss is no longer immediate. Brazil’s election was clean with many power checks and counterweights to check Bolsonaro’s power after his loss, showing that the government will prioritize the voice of the people. Lula continues to gain traction and foreign influence through a neutral and non-discriminatory tactic that is causing him to play both sides of the aisle— mostly.
Lula hopes to bring back UNASUR to become an economic and political power. He has ideas about a regional currency that could compete with the US dollar and benefit economies all over the continent. These alliances were strong during his first term.
Where Do We Go from Here?
During the COP27 climate summit in Egypt, Lula boasted “Brazil is back!”— and it just might be. The president hopes to end decade-long stagnation to reinstate social programs and overcome differences among leftist leaders and different government styles in South America. He’s attended regional summits and has met with a handful of international leaders already. Turmoil in South America during a time of political instability may limit Lula’s goals, but he has shown to be resilient and successful. It may be time for the power block of UNASUR to reemerge on the world stage, and they may have Lula to thank.