Home' Trinidad and Tobago Guardian : August 13th 2015 Contents AUGUST 13 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
REGIONAL | BG19
At Mitad del Mundo
("Middle of the World"),
a park in an Andean val-
ley outside Quito,
Ecuador s capital, a stone
monument marks the
line of the equator. Only a couple of hun-
dred yards to the south rises a striking
new building clad in silver-and-black glass,
its two cantilevered wings describing a U.
It is the headquarters of the South Amer-
ican Union, or Unasur, opened last year.
The host government of President Rafael
Correa, then flush with oil money, agreed
to finance the planned construction cost
of US$66 million. It is a grand architectural
statement; but it still is half-empty, and
its splendid conference rooms are sparsely
The building poses a question: What is
the point of Unasur?
Formed in 2008, its origins lie in the
South American Community, a Brazilian-
inspired push to merge Mercosur and the
Andean Community, two would-be com-
mon markets, and to develop cross-border
infrastructure linking the countries of
Under the influence of President Hugo
Chávez, Venezuela s socialist strongman,
the group changed both its name and its
purpose. It shed its economic mission in
favor of "political cooperation." The more
or less explicit aim was to displace the
Organisation of American States, whose
members include the United States and
whose headquarters is in Washington.
Unasur has set up ministerial councils
on issues such as defense and health. It
has dispatched a dozen missions of electoral
"accompaniment," which are less intrusive
and rigorous than the observers sent by
the likes of the OAS or the European Union.
It facilitated talks between government
and opposition in Bolivia in 2008 and in
Venezuela last year. It blessed, without
investigation, the narrow victory of Nicolás
Maduro, Chavez s heir, in Venezuela s pres-
idential election of 2013, a result questioned
by the opposition.
Ernesto Samper, a former president of
Colombia who became the organisation s
secretary-general last year, said that Unasur
reflects "a political scenario" in which
most South American leaders are "socialist,
left or progressive." Its job is to promote
three goals: keeping South America a region
of peace, avoiding "democratic ruptures"
and defending human rights, understood
to include "socio-economic rights" and
the fight against poverty and inequality.
Thus the group s "democratic clause"
is not linked to respect for the separation
of powers, but rather to "the real validity
of social rights."
To its critics, that looks like an apology
for the autocratic regimes of the left in
Bolivia, Ecuador and Venezuela, which
have seized control of their countries
courts, electoral authorities and other for-
mally independent institutions.
"None of them is prepared to stand up
to Venezuela," said José Antonio García
Belaunde, a former foreign minister of
The scope for political coordination is
minimal, he adds, because South American
countries agree about so little.
"They don t share a mission or a vision,"
In practice, the seeming left-wing con-
sensus to which Samper refers conceals
big differences of outlook.
Its defenders argue that, by eschewing
public criticism of member states, Unasur
manages to keep open doors that otherwise
would be closed to dialogue. Brazil, for
example, sees Unasur as "a low-cost, low-
maintenance forum" to prevent disputes
in its continent from getting out of hand,
according to Matias Spektor of the Fun-
dação Getulio Vargas, a think tank.
Unasur now faces the biggest test of its
short life. If previously reliable opinion
polls are to be believed, Venezuela s oppo-
sition should easily win a parliamentary
election on December 6. It is not hard to
see why: Thanks to Maduro s misman-
agement, incomes are plunging, many
goods are in short supply and the health
service is collapsing.
Since the regime has jailed some of its
leaders and barred others from running,
the opposition fears that the government
will steal the election. Maduro has refused
an offer by the new OAS secretary-general,
Luis Almagro, to send observers.
Unasur claims credit for persuading the
government to fix a date for the election;
though others, including the United States,
which has been holding sporadic talks with
Venezuelan leaders since April, also pushed
for this. It plans to send a mission of offi-
cials from the continent s electoral author-
ities ahead of the poll. How robust will it
There is still time for Unasur to staff its
mission with people of recognised inde-
pendence and clout. Samper should seize
it. If Unasur ends up whitewashing electoral
fraud, its fate will be to join the long list
of Latin American organisations that eke
out a bureaucratic half-life of irrelevance.
The trouble with "political scenarios,"
after all, is that they can change.
The Inter-American Development Bank (IDB) is
giving Jamaica a US$130 million loan to strengthen
its economic reform programme, with a top official
of the institution confident that the country s econ-
omy is "about to turn the corner and harvest the
results of its efforts".
The IDB said the Jamaica government has been
improving its public finances in recent years in order
to set the stage for stronger economic growth.
Alexandre Meira da Rosa, vice president for Coun-
tries at the IDB, said there was no dissent, from
anyone on the board, when consideration was being
given to the Jamaica loan.
"This is a credit and tribute to the efforts of Jamaica
to carry out the reforms necessary to achieve eco-
nomic and social growth. We believe that Jamaica
is about to turn the corner and harvest the results
of its efforts," he said.
The IDB official said the agreement fulfilled a
commitment that he and the bank s president made
to Minister of Finance Peter Phillips last year "to
walk hand-in-hand with Jamaica on the reform jour-
Minister Phillips said while the government and
the IDB don t always see eye to eye, the bank has
been a consistent partner in Jamaica s economic
reform programme, and it is because of the insti-
tution s support that considerable progress has been
"We don t always agree on everything, but when
we don t, we can discuss and emerge with an even
stronger bond of collaboration and are better off for
having these discussions," he said.
"This approval, on the eve of Jamaica s celebration
of the 53rd anniversary of Independence, is appro-
priately timed as we strive to ensure the unfurling
of all the opportunities that Independence represents,"
Phillips added, thanking the IDB for helping the
Portia Simpson Miller administration to "deliver on
the legitimate expectations of the people in Jamaica
for a better life."
The IDB loan has a 20-year maturity, a 5.5-year
grace period and a 1.2 per cent interest rate.
This is the second operation of a policy-based
loan series, providing budget support for the gov-
ernment s fiscal policy reform.
The first operation was approved in February 2014.
IDB says Jamaica economy
about to turn the corner;
approves US$130M loan
The South American Union:
An edifice in search
of a function
Spain has removed Barbados from its tax haven
blacklist, following protest by the island s Ministry
of International Business.
And International Business Minister Donville Inniss
says he is hoping other countries will follow suit.
Barbados was among Caribbean countries recently
listed by several members of the European Union
(EU) as being non-cooperative tax jurisdictions.
"Barbados currently has 34 double taxation agree-
ments (DTAs) and this, to my mind, adds great value
to our international business sector. Also, we are
expecting a DTA with Italy and, over the next few
weeks, formal negotiations on a tax treaty with Cyprus
will commence in London, England," Inniss said,
adding that he would be leading the team to London
to oversee the negotiations.
The minister said discussions are ongoing with
those EU members which still have Barbados black-
listed, including Bulgaria, Croatia, Estonia, Finland,
Greece, Italy, Latvia, Lithuania, Poland, Portugal and
Inniss disclosed that diplomatic notes have been
dispatched to those nations to ensure they are aware
of the errors in their listing, to formalise tax treaty
relations with them, and to get Barbados off those
Bdos removed from
Spain's tax haven blacklist
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