Tuesday, 31 July 2012

Venezuela in Mercosur

Today Venezuela gets into Mercosur. Is it good for Venezuela? No, it isn't. Mercosur stopped a long time ago being what it was intended to be, a vehicle for economic integration. It is now mostly a playground for Brazil and a political pet project for the military in Venezuela. 

Argentina's economic policies are so bad that in spite of record commodity prices the country is becoming less competitive by the day in any else. Brazil is the   big winner because it is employing very aggressive expansionist policies and no ideological rubbish in order to do business. The territorial expansion Brazil undertook in the XIX century is now being complemented by the business expansion - based on governmental support for Brazilian entrepreneurs, on some planning, on nothing special and yet huge compared to the absolute disarray most Spanish American countries have offered in the last years.

Below you see the trade balance between Venezuela on one side and Brazil, Colombia and Argentina on the other. Colombia is not part of Mercosur but most of its businessmen are also very happy Venezuela has Chávez in power. Chávez has kept an overvalued currency, introduced all kinds of hindrances for exporters and private producers in general - absolutely afraid that anyone can take some power away from him. Chávez has expropriated thousands of companies and has declared Venezuelan businessmen are intrinsically evil. 

My country is now like a swimmer who has to compete against professional swimmers while his hands are tied up and a bag of lead is attached to his feet. This is no integration. This is a disaster.
Balance Venezuela-Argentina

Balance comercial de Venezuela-Colombia

Balance comercial de Venezuela-Brasil

Some sources
ArgentinaArgentina (with data from 1998, even if I didn't have time to plot that on the chart)


  1. I think it is only natural that Brazil wants to expand its economy and bring more money into the country for more modern commodities. They will have to if they want to impress the world in 2016 for the Olympics. But at what cost will this come for the other members of Mercosur?

    1. Obviously, they don't care about the other countries. To be honest, no nation has cared about the others when it comes to its own expansion.
      I believe Spanish Latin American countries need to speed up their integration before they go on opening up for Brazil...but it is probably now too late. Brazil has a weight in South America, proportionately speaking, that is much larger than Germany's in the EU.
      There is going to be a lot of tension in the next decades...but then most Latin American politicians think based on the next election.


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