Latin America makes progress toward regional integration

During this decade, the countries of Latin America and the Caribbean have made important progress in consolidating the regional integration process, CAF President & CEO Enrique García said.

The statement was made during a roundtable held today in the headquarters of the multilateral institution in Caracas, during the XV Annual Meeting of the Latin American Association of Capital Goods Industries and Infrastructure (ALABIC), which groups business leaders from nine countries of the region, whose deliberations will end on March 31.

Other participants in the roundtable were the secretary general of the Andean Community of Nations (CAN), Venezuelan Sebastian Alegrett; vice president of the representation of Brazil on the Mercosur Council of Industries, Luis Eulalio Vidigal; and former president of the Venezuelan Council of Industry (CONINDUSTRIA), Pedro Carmona Estanga, with the presence of the ambassadors of the Mercosur member countries.

Making an evaluation of the process of developing closer relations between CAN and Mercosur, García said it was a fact that Latin America was now aware of the need to strengthen regional integration in view of the challenge of the rapid march toward a globalised world.

He added that, besides uniting capacities to strengthen and compete on better conditions in the world arena, Latin American nations have succeeded in making progress on the basic points of consensus with respect to the development model adopted in a context of good governance and pluralist democracy.

He emphasized the role played by CAF in allocating over 60% of its loans to investment in physical infrastructure, several of which have financed projects with high regional integrationist and strategic content.

In this context, he emphasized the loans approved for construction of the Bolivia-Brazil gas pipeline for US$200 million, and the Venezuela-Brazil electricity interconnection for US$86 million.

"With construction of the gas pipeline, Bolivia will become the major gas distributor in the south of the American continent. In addition, the entry of Bolivian natural gas into Brazil will give that country access to an environmentally clean and safe fuel," he said.

García said the same line of border integration was continued by the electricity interconnection program between Venezuela and Brazil which, in addition to interconnecting the electricity systems of the two countries, will lay the base for future developments toward the other member nations of Mercosur and the Andean Community.

In addition, another integration loan was granted to Brazil for US$86 million to upgrade the BR-174 Highway, strategic road corridor which will connect the northern region of that country with Venezuela and facilitate trade between the countries of Mercosur, the Andean Community, the Caribbean and Central America.

This integrationist panorama also includes a loan granted to Peru for the Ilo-Desaguadero highway, which will give Bolivia access to the Pacific Ocean through the port of Ilo.

García also mentioned the US$60 million loan approved for Paraguay to execute the Paraguay-Bolivia Trans-Chaco Highway Integration Corridor project, which will facilitate trade between these countries, and the other nations of the Andean Community and Mercosur.

Panama was another non-Andean country which received a CAF loan with high integrationist content. The US$60 million credit operation for the Road Infrastructure Program in the Interoceanic Corridor will open routes to other international markets through the Atlantic and Pacific oceans.

"CAF’s integrationist vision – he said – is reflected by the fact that the growth of the institution’s equity composition now almost covers the map of America and the Caribbean."

CAF is formed by the five nations of CAN – Bolivia, Colombia, Ecuador, Peru and Venezuela – together with Brazil, Chile, Jamaica, Mexico, Panama, Paraguay, and Trinidad and Tobago, countries which are members of other integration scheme such as Mercosur, Caricom, FTA and G-3. This breadth of membership reinforces the integrationist objective of CAF, which is to act as bridge between all its members, while diversifying its operations and expanding its radius of action into other markets.

Conversations are ongoing with Argentina and Uruguay on their entry into the share capital of the Corporation.

Commenting on the negotiations which have been going ahead between Mercosur and CAN to create a free-trade zone between the two integration blocks, García said a fundamental element of this process was the position assumed by the presidents of Mercosur at the Montevideo Summit last year, when they affirmed that a future agreement between the two blocks would intensify relations between the two regions and increase the potential for trade between the parties.

The Alabic Annual Meeting ends tomorrow with a cycle of talks and presentations on the privatization plans for the Venezuelan electricity and mining sectors, with the participation of industrialists from the countries of the Andean Community and Mercosur.

The speakers in this cycle of talks are principal director of Petróleos de Venezuela (PDVSA), José Toro Hardy; president of the Industrial Credit Fund, Hector Quinero; director of the National Development Bank of Brazil, Yvonne Saraiva; director of the Inter-American Development Bank, Setzuko Ono; director of Corporación de Fomento de la Produción (CORFO) of Chile, Francisco Troncoso; the secretary general of Alabic, Carlos Huerta; and vice presidents of Alabic, Ricardo Day and Salvador Lluch.