Unification of Latin America Follows European Lead

President of Brazil, Luis Inasiu Lula da Silva promised a single Central Bank and a single currency for the whole continent while commenting on the creation of the Union of South American Nations. Similar processes are in the works for Arab countries, Africa, and the Pacific Ocean region.

Latin America united on May 23, when twelve South American countries signed the Constituent Agreement of the Union of South American Nations (Union de Naciones Suramericanas, UNASUR). A very important step has been made towards unification of countries in the region.

The Union was initiated in December of 2004, at the meeting of the Heads of States in a Peruvian town Kusko. The first meeting of the leaders of forming Union passed in September of 2005, in Brasilia, while the second occurred in a Bolivian town Kochabamba. At the same time, the temporary president of the Union, Evo Morales, was elected. The third meeting was supposed to take place in Columbian Cartagena at the end of the March of this year. However, it was postponed until May and was carried out in Brasilia because of international conflict caused by Columbia’s armed invasion in Ecuador.

Brazil – the most economically developed country of the region – was the driving force for the creation of the Union of South American Nations. The headquarters of the new alliance will be located in Ecuador, while the united Parliament and Bank will be in Bolivia and Columbia correspondingly. The President of Chili, Michel Bachelet, was elected as President of the Union. The idea of this Union is to combine the resources of various countries: Brazil’s high technologies, Venezuelan and Bolivian oil, and human resources from poorer countries. The Union will use a single currency and is to become a hard currency at the world market and, as a whole, make the economy of the Latin America Union stronger.

Leaders of the participant countries are expected to meet annually, while meetings with Ministers will take place every three months. UNASUR will intensively develop long-term projects in the strategic spheres like financial and energetic independence of countries in the region. Brazil initiated the creation of the regional Defense Council.

President of Chili Michel Bachelet who was elected a temporary president of the UNASAMUR called the signed Constituent Agreement a “historical step in the correct direction.” She believes that new regional Union will enforce the position of Latin America in the 21^st century because in just 30 (thirty) years, more than 60% of the world economy will be concentrated in the “developing countries” and Latin American countries will be among the leading ones.

Brazilian President Luis Inasio Lula da Silva believes that in the course of the time the UNASUR can attract all the countries of Latin America as it has taken the tested principle of the European Union as the basis of its unification. Lula believes that the unification of South American Nations can change the power balance not only in the Western Hemisphere but in the whole world as well.

UNASUR – Union of South American Nations – includes Argentina, Brazil, Bolivia, Venezuela, Guyana, Columbia, Paraguay, Peru, Surinam, Uruguay, Ecuador, and Chili. The Union covers 17.7million square kilometers, which contains more than 30% of the world fresh water supplies. The population comes to 380 million people. Of all the territories of the continent, only French Guiana did not sign the agreement. This territory belongs to France and is already a member of the European Union. The Nearby Falkland Islands that are governed by Britain are also European Union members.

The idea of a South American Union is two centuries old. Napoleonic wars that brought to ruin the whole Europe indirectly helped South America. Spain and Portugal, who colonized nearly all the countries in South America, were distracted from their overseas affairs. The rebellion took place in Venezuela in 1810. It was headed by Simon Bolivar, who became one of the heroes of the Latin America fight for its independence. Bolivar managed to liberate Venezuela, New Grenada (today Panama and Columbia) and Kito Province (today Ecuador) from Spanish rule. From 1819 to 1830, he was the President of Great Columbia, created on the territories of all these countries. In 1824 Bolivar liberated Peru. Owing to him, Upper Peru Province got its independence and was named Bolivia.

However, one person’s efforts supported by a handful of enthusiasts were not enough to secure the benefits of their victory. Congress of Representative of Spanish-American States took place in Panama in 1826. Bolivar suggested creating Confederation following the USA example.

However, leaders of the new Spain-free States did not want to unite in the time of peace. Thus, the Agreement was not signed. It took until 2008 for the leaders of twelve South American States finally signed an agreement to unite.

Similar processes are taking place in Arab countries, Africa, and in the Pacific region. In the early 1990-s the idea of a single currency was discussed by seven countries of the Persian Gulf region, including Arab Emirates, Kuwait and Saudi Arabia. Money called “Kaliji” was planned to be introduced not later than 2010. However, inflation and dollar devaluation interfered with this plan.

The Finance Ministers of China, Japan and South Korea were discussing using a single currency for the three countries at the meeting of the Asian Bank of Reconstruction in 2006. They wanted to call it ACU (Asian Currency Unit). In the same year, Australia and New Zealand declared the possibility of creating a single currency.

South African countries, like South-African Republic, Botswana, Lesotho, Swaziland and Namibia, are also exploring the possibility of introducing a single currency. World analysts believe that when there will be only four or five currency units left in the world, rates will be stabilized and the economy will improve.