Lula Rising

There’s a fascinating piece in the Times this morning on how Lula da Silva (the president of Brazil) is eclipsing Hugo Chavez as the continental leader in South America. The broad-brush reasons for this are pretty clear – with Bush fading from view and a new, charismatic, and internationally accommodating leader set to take his place, Chavez’s fiery “Bush is the devil” rhetoric and accompanying critique of the Washington Consensus have become less salient than his Mugabe-esque land reform and naked censorship. But what’s more interesting to me is how Lula is utilizing his newfound stature:

Venezuela’s attempts to assemble an alliance of countries remains limited to its ALBA trade bloc. But Brazil hosted leaders of 12 South American nations in May to create Unasur, a continental bloc modeled on the European Union that unites the region’s two main trading groups, Mercosur and the Andean Community.

Brazil has often publicly lauded Mr. Chávez’s efforts to unify South America, while subtly strengthening institutions that serve as a check on ambitious Venezuelan-backed ventures, like a gas pipeline across the continent or the Bank of the South, a development bank conceived to compete with the World Bank.

The Bank of the South remains little more than a grandiose idea. Last December, just nine days after Mr. Chávez announced the formation of the bank, which Brazil is expected to join, Mr. da Silva attended a low-key event in Uruguay to inaugurate a new branch of Brazil’s development bank, B.N.D.E.S.

The Bank of the South would be hard-pressed to catch up to B.N.D.E.S., which financed $4.2 billion worth of investments worldwide last year, including loans for the expansion of the Caracas metro.

I really like this approach. As globalization spreads, the closer the global economy gets to a traditional, national economy, and the more it, like any economy, needs wealth redistribution and other regulation. There’s only so much of that one can do in the current WTO/bilateral trade framework, and what regulation there is comes from a process lacking any democratic accountability. Things like continental unions modeled after national governments are a much better way of creating a fair global marketplace, especially in regions like Latin America where exploitation, union intimidation, etc. are still at Gilded Age levels. The EU isn’t democratic enough, true, but it has a parliament that’s given more and more power with every treaty revision and which has allowed for cross-Continental concerns to be discussed by non-elites. It’s a direction I wish North American would go in, and Lula’s good for pushing his continent toward it.

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