Latin America & the Caribbean
Introduction
Europe has age-old links to Latin America. Many of our countrymen have travelled to this part of the world ever since the 16th century, resulting in an entire network of relationships at cultural, political and economic levels. This has led to an affinity that overcomes geographic distances.
We are above all bound by our common socio-cultural and humanistic values, which should actually create a fruitful foundation for cooperation and partnership. This nice-sounding premise has not always corresponded to reality, however, with the result that the continent has had difficulty freeing itself from the grip of ‘caudillismo’, populism and nationalism. During the dark years of the most recent wave of dictatorships, a strong commitment to human rights and democracy was expressed by Belgium and, more generally, by the West. As the overall political situation has improved and the economic environment has evolved accordingly, we have unfortunately been unable to take sufficient advantage of the major opportunities offered by the region. This is not for lack of an ongoing presence in the region - to this day the EU is the second-largest trading partner (and number one in trade in services) and remains the biggest investor (approximately 40%) and largest donor in Latin America and the Caribbean - but we have been unable to shed the paradigm of the funding of development projects and the provision of trade facilities. We are not solely to blame here; Latin American politicians and business leaders have likewise accorded scant recognition to European potential, and all too often they continue to shy away from cooperation at the broader level (witness the difficult negotiation rounds concerning free trade or association agreements).
Yet the Latin American and Caribbean continent is anything but homogeneous. A rather loose confederation of nations now exists for the first time, thanks to the newly-created CELAC (Community of Latin American and Caribbean States), an organisation founded in Caracas in late 2011 in which all countries participate. There are several regional blocs as well (UNASUR, MERCOSUR, SICA, CARICOM, etc.), not a single one of which has developed a well-integrated personality of its own. There exists not even a basis for a common market, neither for portions of the continent nor for the continent as a whole. This quite probably forms the weakest link among efforts to achieve genuine and sound socio-economic progress. Recent decades have witnessed great political and economic strides: the debt crisis was overcome, robust growth has made a comeback, and the middle class has grown visibly. Yet major challenges remain, primary among them the still considerable social inequality, the inadequate educational system and the major gaps in infrastructure.
From the standpoint of both Europe as well as Belgium, there is definitely still room for a more active policy vis-à-vis Latin America and the Caribbean. The Eurozone crisis has given Latinos the impression that we are too self-absorbed. There is room for diversification is in our capital investments; these have on the one hand been heavily directed at services, and have otherwise been channelled towards energy, telecom and to some extent infrastructure. These investments have not always had significant social impact either. The same can be said for our cooperation in the areas of science, technology and innovation - here too there is more that can be done. And last but not least, both Europe and Belgium are looking forward to more investment from Latin America as well as a somewhat less unilateral flow of trade (still too heavily dominated by commodities).
Our diplomatic network in Latin America and the Caribbean includes ten embassies and two consulates-general. In most instances, an embassy’s jurisdiction encompasses more than one country: Mexico City for Mexico and Belize; San José for all six Central American countries; Havana for Cuba; Kingston for the vast majority of the Caribbean; Caracas for Venezuela, Trinidad and Tobago, Guyana, Suriname and the Dutch Caribbean; Bogota for Colombia; Lima for Peru, Ecuador and Bolivia; Santiago for Chile; Brasilia for Brazil; Buenos Aires for Argentina, Paraguay and Uruguay. The two consulates-general are located in Brazil: in Rio de Janeiro and Sao Paulo. Though they are not equally represented throughout the continent, the two regions of Belgium also maintain a presence here: Flanders Investment and Trade, the AWEX (Agence wallonne à l’Exportation et aux Investissements Etrangers/Walloon Export and Foreign Investment Agency) and the BIE (Bureau International des Expositions/International Exhibitions Bureau). The French-speaking Community maintains an office in Chile.
The most significant bilateral contacts over the course of the past decade were without doubt the economic delegations led by Prince Philippe to Brazil (twice in the last five years), Chile (twice in the last ten years), Argentina, Uruguay, Mexico and Panama. The Minister for Foreign Affairs has also visited several countries in the region in recent years.
1. Middle America and the Caribbean
This region consists of as many as 21 nation-states, most ranging in size from small to very small (Caribbean island states).
By far the largest country in this region is Mexico. With more than 100 million inhabitants in Mexico, the Belgian presence here dates back to the 16th century (education reformer Pedro de Gante). Several Belgian firms have operations here, it is home to a modest-sized Belgian community, and we are Mexico’s seventh-largest trading partner among EU Member States. These two countries maintain active cultural (regular exhibitions) and scientific ties (there is an institute for Mexican studies at the University of Antwerp). The area comprising the Central American countries - with more than 50 million inhabitants and almost a thousand countrymen - makes for a small and rather lopsided trading partner (Belgian machinery versus agricultural products, with a trade deficit). Panama is our largest trading partner in the region, accounting for 37% of export trade volume. Belgian companies are primarily engaged in infrastructure works (including the upgrading of the Panama Canal, to be completed by 2014). These countries are among the poorest on the continent and also suffer greatly from the effects of violent drug-related crime. Belgian development cooperation remains in place through the presence of several Belgian NGOs. Further economic stimulus is anticipated for this region, stemming from the association agreement between Central America and the EU that will go into effect on a provisional basis in July 2012 (the trade component).
The Caribbean
Though it is not a focus country for development cooperation, Haiti has become a focus country for assistance in the wake of the destructive earthquake in January 2010 (more than €10 million in emergency relief and about €20 million in short-term reconstruction aid). We are also contributing to the UN’s MINUSTAH mission. Cuba is a traditional partner country of NGOs and of our federated entities. As the last communist country in the Western hemisphere, it plays a political role that is by no means insignificant while ‘gradually’ adjusting to a set of altered geopolitical realities. Belgium is taking a constructive lead on this issue within the EU. Jamaica (the seat of our Caribbean embassy) maintains unquestionable economic significance (transport, Jonckheere buses) and potential for infrastructure works, while Trinidad and Tobago offers prospects for renewable energy.
2. South America
This continent is comprised of 12 nations.
Under President Chavez, Venezuela is the most problematic country in the region when it comes to bilateral relations. The president remains relatively popular, but his lingering health problems combined with the presence of an opposition unity candidate have cast doubt on the outcome of the October 2012 presidential election. Autocratic populism - detrimental to democracy and human rights - may have provided a ‘social safety net’ thanks to oil revenues, but has inflicted grave harm to trade and investment. The Andean Countries. Three of the four (Peru, Bolivia and Ecuador) are focus countries, and development cooperation is therefore the main driving force behind our bilateral relationships. Poverty is on the decline in absolute terms, with these three countries all showing good growth numbers, especially Peru. Ecuador and Bolivia both have regimes engaging in a high degree of state intervention. Peru and Columbia take a more liberal approach, with both ready to sign a ‘multi-party’ free trade agreement with the EU in the Fall of 2012. Colombia has the most attractive business climate, but continues to be plagued by an internal armed conflict that has lasted for more than 50 years (which over time has led to crime gaining the upper hand over ideology). Combating the drug trade and fighting crime remains at the top of the political agenda. Chile is our third-largest trade and investment partner in the region (the country also invests in Belgium) and enjoys an open business climate. It has had an association agreement with the EU since 2005.
We maintain good relations with the two smaller MERCOSUR countries, Paraguay and Uruguay. Uruguay in particular stands out as a model of economic cooperation: logistics (Katoen Natie) and infrastructure. Relations with the much larger Argentina have more recently been complicated by increasing protectionism there. There has been less protectionism in the region’s largest country, Brazil, though it has still been unable to genuinely tap its potential thanks to the custo Brasil - the various obstacles to doing business there. This Latin giant, with almost 200 million inhabitants and the most significant Belgian community in Latin America, is host to more than 50 Belgian firms and reports strong trade figures with Belgium (€4.5 billion in bilateral trade in 2011). Belgium maintains a solid presence in Brazil, all the more given that we are the third-largest investor here at the global level. The Belgian presence is best typified by the large infrastructure works (with additional opportunities springing from football’s World Cup and the Olympic Games), port facilities, waterways, the realm of aviation and space travel, and energy (both nuclear and green). But we must also not forget our scientific and technological cooperation. Recent agreements between Brazilian and French-speaking/Flemish higher education authorities will provide thousands of young Brazilians with the chance to study and train in Belgium in coming years. Negotiations on an association agreement are being carried out between MERCOSUR and the EU, though progress has been rather difficult.
