Sylvia Lorena Rodrguez

December 2007
LIS Senior Capstone

Regional Integration in Latin America:

A Vision for Peace

and Sustainable Development
For and By Latin Americans

En un escenario caracterizado por siglos de dominacin colonial,

neocolonial e imperialista, irrumpen hoy, con fuerza y
protagonismo crecientes, los movimientos sociales, polticos y
culturales que reivindican la libertad, soberana, unidad e
integracin de los pueblos latinoamericanos.1

From speech by Francisca Rodriguez, President of Anamuri (Agrupacion de Mujeres Rurales e Indigenas) calling for a
Summit of the Peoples. http://www.cumbredelospueblos2007.cl/convocatoria

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Index
INTRODUCTION ........................................................................................................................................................... 3
CHALLENGING CONVENTIONAL WISDOM ........................................................................................................... 4
DEVELOPMENT IN THE HANDS OF GLOBAL RULERS ...................................................................................... 6
THE MILLENNIUM DEVELOPMENT GOALS (MDGS) ......................................................................................... 7
INDIGENOUS PEOPLES, THE UNITED NATIONS AND CORPORATE GLOBALIZATION ........................ 10
FROM GRASSROOTS TO LEADERSHIP. A CASE STUDY: BOLIVIA .............................................................. 12
WATER: A HUMAN RIGHT OR A PRIVATE GOOD? .................................................................................................................... 13
BOLIVIA AFTER THE 2005 ELECTIONS ....................................................................................................................................... 15
DEBT CANCELLATION AND AN ALTERNATIVE TO THE IFIS ...................................................................... 16
DEBT CANCELLATION .................................................................................................................................................................... 17
BANK OF THE SOUTH ..................................................................................................................................................................... 18
ALTERNATIVE INTEGRATION AND DEVELOPMENT MODELS ................................................................... 19
NEW CHALLENGES ................................................................................................................................................... 23
AGROFUELS: A PROBLEM, NOT A SOLUTION .............................................................................................................................. 24
CONCLUSION .............................................................................................................................................................. 27
BIBLIOGRAPHY ......................................................................................................................................................... 29

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Introduction

Latin American contemporary politics and socio-economic struggles are the result of a combination
of external and internal colonialist ventures. Iberian colonialism brought destruction, genocide,
slavery and institutionalized racism, visible today in the struggles across race and class throughout
the Americas. United States imperialism in Latin America has come about through direct
interventions and interventionist policies like proxy wars, financial and military support for military
coups, and the imposition of economic sanctions. After WWII the new world order of powerful
capitalist economies and the founding of International Financial Institutions (IFIs) dominated the
debate over the global economy. During the Cold War while the U.S. fought East-West battles on
Latin American soil to halt the spread of communism throughout the region, the IFIs backed up
corrupt and dictatorial governments with aid for development projects that benefited multinational
corporations and a powerful few in the South. Today, IFIs continue to advance the agendas of the
wealthy and powerful from both North and South and the U.S. government continues to pursue its
own interest, that of corporations, through a national security agenda of free trade, anti-immigration,
anti-drug, and anti-terrorist policies.
In addition to external colonialism, corporate and financial interests from the elite in Latin
America have perpetrated internal colonialism through the support and implementation of neoliberal
policies. Both foreign and internal neocolonialism in Latin America occur when governments
subjugate to the powerful global north (or the West)2 by implementing an agenda modeled on the
image of the U.S. and its interests, and by implementing the dictates of global leaders like the World
Trade Organization and International Financial Institutions (IFIs): mainly the World Bank, the
International Monetary Fund (IMF) and the Inter-American Development Bank (IDB).
The powerful North and its history of domination are challenged today by the birth of
grassroots democracies, which are the result of the very policies that have tried to undermine them.
This backlash is visible in the powerful social movements rejection of free trade and investment

Throughout this paper I use the terms global north and global south as alternatives to Third World, underdeveloped,
developing and developed for three reasons. First, the term Third World is outdated since it was coined during the
Cold War to divide the world in three main camps: whereas the first world promoted development, the second world
opposed it, and the third world were those countries who constituted the object of their exercise. Second, since there is
not a universally agreed upon interpretation of development, the terms underdeveloped and developing tend to be used
along Western standards. And finally, even though global north and global south imply a divide between North and
South, I use these terms purposely to refer to the haves and have-nots, the oppressors and the oppressed, as well as to
create a Hemispheric framework of grassroots solidarity between alternative voices from North and South.

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agreements promoted by the hegemonic North and in the growing demand for alternative paths to
development.
Even though the legacy of internal colonialism prevails in the agenda of some government
leaders and corporate interests throughout Latin America, alternative voices from South and North
are working in solidarity to redefine an agenda for the Hemisphere. Among the new demands are:
regional collaboration, an end to militarization, the cancellation of illegitimate debts, selfdetermination, and a redefinition of progress that is measured by human-centered and human rightsconscious development goals and models. Grassroots human rights, indigenous, peasant, labor, and
environmental movements are challenging the excesses of corporate rights. They are also reframing
the concepts of sustainable development and regional integration with a fundamental emphasis on
social, cultural and economic rights for all people.
This paper explores alternative paths to development that challenge the currently mainstream
neoliberal model. It recognizes successful examples where bottom-up approaches to peace and
sustainable development have gained momentum at both the grassroots and government level, as
well as in solidarity among alternative voices from the Americas. Finally, as a contemporary
example, this paper points at the dangers behind the current boom in the production of agrofuels.
Promoted as a project for sustainable development, agrofuels in fact have the potential to expand a
destructive global corporate agenda and a militarized economy. In this paper I introduce the
opportunity being currently developed for grassroots solidarity between North and South to address
such an important issue.

Challenging Conventional Wisdom

Alternative voices from both North and South are challenging conventional wisdom in the
development discourse, defying the belief that Latin America must look up to the North if it is to
climb the economic ladder, to modernize, and put an end to increasing disparities throughout the
region. However, the notion of progress as defined by industrial capitalism and promoted through
free trade agreements fails to recognize the political, environmental and socio-economic
consequences of pursuing a corporate-driven development agenda. Industrial capitalism constitutes
the means through which the dominant foreign and national interests of a powerful few legitimize
institutionalized racism and discriminatory classism in the Americas and further aggravate the
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unequal distribution of wealth and power. Such has been the case of the Andean country of Bolivia,
a case-study later discussed in this paper where leadership has responded to the demands of the
grassroots by addressing historical injustices.
In recent years a new wave of anti-imperialist, social democratic, populist leaders have been
democratically-elected throughout Latin America. Their election is the result of grassroots pressure
that has exposed the failures of the neoliberals of the 1990s in implementing an economic model
recommended and often imposed by the United States and the global governance of the IFIs. Based
upon modernization theory, governments have been assured that the only path to modernization is
development through the expansion of capitalism. Under such a belief since the 1990s the U.S. has
explained the underdevelopment of Latin America in terms of its success or failure to integrate into
the world market. Modernization theory, also coined as neoliberalism is based on the belief that
trade liberalization, privatization, and financial reforms that integrate countries into the global capital
market as well as reforms that aim at lowering the cost of labor will eventually trickle down to the
global south, resulting in prosperity and growth. But in practice such benefits have been slow to
come, if they happen at all.3
The rise in grassroots democracies and the recent election of populist leaders throughout the
Americas embody the Latin American peoples challenge to the theory of modernization. The
challenge is to question the very concepts of modernization, underdevelopment, and poverty, since
these tend to be measured according to Western industrial standards. The peoples challenge is also
introduced through the criticism of a specific top-down development model: the capitalist model as
the only means through which a country ought to modernize. Finally, the challenge to the
mainstream economic model takes the form of bottom-up development by prioritizing the
historically marginalized peoples voices that demand an end to their experiences of neglect,
displacement, and even the destruction of their livelihoods through the same development assistance
that allegedly comes to their aid.

Munck, Ronaldo. Contemporary Latin America. New York.: Palgrave Macmillan, 2003.

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Development in the hands of Global Rulers

The legacy of power and wealth accumulation in the hands of a few can be traced back to around
1980. At that time the IFIs became much more powerful since their creation in 1944, as selfproclaimed their responsibility to design economic policy programs for underdeveloped countries.
It was about that time that neoliberalism became core to the economic doctrine of the IFIs. It was
also about that time that the international debt crisis struck Latin America as a consequence of a
number of factors: excessive borrowing and lending from irresponsible and often corrupt borrowers
and lenders, the oil crisis and a dramatic increase in U.S. interest rates which resulted in the
accumulation

of

an

unpayable

debt.

In addition to helping further debt accumulation, the IMF had started making emergency
loans for borrowing countries that were attached to specific economic policy conditions. In addition,
the World Bank was making loans for large development projects, mainly infrastructure projects that
reinforced IMF conditions. These often turned out disastrous. By the year 1990 IMF conditions,
called Structural Adjustment Programs (SAPs), had been imposed on the great majority of
governments in the global south. Among these were privatization of government-owned enterprises,
privatization of services, cuts in government spending, liberalization of the financial sector and of
the market, and cuts on subsidies to commodities like food and medicines, among others.
While allegedly the goal of SAPs and World Bank loans for development projects was to
restore weak economies and to provide means for the repayment of debt, the real goal was to make
impoverished countries fit into the free market global economy. As a consequence, SAPs failed
tremendously in achieving their goals. In many cases debt levels at the minimum doubled, the gap
between rich and poor widened, standards of living remained the same or worsened, and the
environment was devastated.
In spite of their failure, IFIs continued to demand the adoption of the same policies. Some
would argue it is no coincidence that these institutions are not succeeding in their goals and that in
fact they continue to do so purposely. As 50 Years Is Enough4 states,
The IMF and World Bank are controlled by their wealthiest contributors, the Group of
Seven (G7) countries. The policies the institutions have imposed over the last 25 years have

50 Years is Enough is a nongovernmental organization that advocates for accountability and reform of the IFIs by
pointing at their devastating development projects and imposition of conditionality for debt cancelation. For more
information see <www.50years.org>.

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opened up economies around the world to multinational corporations and banks based in
the G7 countries, allowing them much greater latitude to reap profits from high interest
rates, exploit low-wage workers, extract natural resources, sell in local markets and
vanquish local competitors, maintain a flow of low-cost commodities, and buy up publiclyowned companies and financial institutions. This is the core of corporate globalization,
and the IFIs have been the key to instituting it as the global economic system. The fact that
only a small percentage of the population in Southern countries benefits from these
developments, and that most are thrown into higher-stress lives and often deeper poverty,
is also part of corporate globalization.5
Since mid 1990s, social movements throughout Latin America have converged in their
demand for a people-first alternative to top-down development in the form of harmful economic
policies that have resulted in more social and environmental harm. They are demanding community
participation in decision-making, empowerment of the poor, the ability to be able to determine their
own future, their own priorities and their own criteria for development. The recent success of
indigenous movements in voicing their demands at the international level in the United Nations and
the grassroots movements that achieved government leadership in Bolivia are two great examples.

The Millennium Development Goals (MDGs)

At the global leadership level, the creation of the Millennium Development Goals (MDGs) was
initiated for nations to strive for sustainable development, solutions to world poverty, hunger, and
the combat of deadly and preventable diseases. The MDGs are specific aspirations that the United
Nations General Assembly adopted in an attempt to close the gap between rich and poor by the year
2015 through development programs. The MDGs are: 1) to eradicate extreme poverty and hunger; 2)
achieve universal primary education; 3) promote gender equality and empower women; 4) reduce
child mortality; 5) improve maternal health; 6) combat HIV/AIDS, malaria and other diseases; 7)
ensure environmental sustainability; and 8) develop a global partnership for development. 6
Although there is a general agreement over the goals themselves, by focusing solely on the
goals the UN and many government leaders are ignoring relative poverty and have thus been
5

50 Years Is Enough Network, ed. The IMF, the World Bank, and the Planned Failures of Global Capitalism.
Washington, DC. July 2003.
6
For more information on the Millennium Development Goals see <http://www.un.org/millenniumgoals/>.

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criticized by the very communities and peoples who affected by certain development projects that
allegedly aim at reaching these goals. In regard to relative poverty, there is not one single
interpretation of poverty indicators and the definition of poverty varies greatly across cultures.
Furthermore, many times the MDGs have been perceived as an extension of neocolonialism and as
an excuse to further divide North and South, rich and poor, and the haves and have-nots, in complete
disregard for the demands of the latter. The demands from indigenous peoples at the level of the
United Nations are perhaps the best example.
In her address during the fifth session of the UN Permanent Forum on Indigenous Issues,
Chairperson Victoria Tauli Corpus expressed concern over the obstacles faced by the nearly 370
million indigenous people. Because the majority of them live in poverty they would certainly like to
achieve the MDGs. Those goals, however, take no notice of the different realities of indigenous
peoples livelihoods or of their lack of participation in the development of a framework. As an
example, she pointed at the MDGs Country Reports. In these reports one can point at the invisibility
of the worlds indigenous peoples in the countries national averages, like the Gross National
Product, which measures income per person of the population and thus fails to address the
distribution of national wealth between different groups within the population.
Among the concerns raised by indigenous peoples about the MDGs, is the definition of
poverty which in general measures income and consumption in terms of food expenditures within a
market and cash-based economy. Rarely do indigenous peoples form part of this type of economy. In
addition, the MDGs do not account for the realities of indigenous peoples: they lack voice or power
in political and bureaucratic systems, their collective rights are not recognized, they are often
removed from ancestral lands and they do not have access to basic infrastructure and social
services.7 In order to address these injustices, they demand participation in the development of a
framework for the MDGs. In the indigenous peoples vision of such a framework is the demand for
the recognition of their basic rights to land and resources, the preservation of culture and identity,
and the right to autonomy and self-determination.
The invisibility of indigenous peoples also shows in the result of a study conducted by the
International Labor Organization (ILO) by looking at the Poverty Reduction Strategy Papers
(PRSPs) of 14 countries in Latin America. PRSPs are the World Bank name for SAPs. In order to
7

United Nations. The Millennium Development Goals and Indigenous Peoples: Re-Defining the Millennium
Development Goals. United Nations Permanent Forum on Indigenous Issues. New York. 15 May 2006
<http://www.un.org/esa/socdev/unpfii/en/session_fifth.html>.

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qualify for low-interest loans from the IMF and World Bank, a country must prepare a PRSP and
agree to the PRGF (Poverty Reduction Growth Facility), which is the IMFs new name for SAPs. To
shed some light into their identical nature, among the policy conditions listed in PRSPs (also in
SAPs) that countries must fulfill are: deregulation and liberalization through the removal of
government control of services, markets and the private sector; privatization of public utilities and
services; opening up the country to foreign trade and investment; imposing user fees for essential
services such as water, health and education; cutting public subsidies for the poor and vulnerable,
and supporting rapid, export-led economic growth.8 After conducting an ethnic audit of the PRSPs in
these countries with indigenous peoples, the ILO found that there were hardly any references to
them.9
In terms of achievements, an assessment of progress in poverty alleviation conducted by the
World Bank of 5 countries in Latin America (Bolivia, Peru, Ecuador, Guatemala and Mexico)
concluded that after ten years (1994-2004) poverty among indigenous peoples remained severe. By
2004, in Ecuador poverty among indigenous people was about 87 percent and around 96 percent in
the rural highlands. In Bolivia and Guatemala, whereas over half the population was poor, poverty
affected almost three quarters of the indigenous population. According to data from a UNICEF
Study in 2003, in Mexico 80 percent of indigenous people were poor compared to 18 percent of nonindigenous peoples. To explain this disparity, the Strategic Framework on Indigenous Peoples of the
Inter-American Development Bank (IDB) concluded that there was a correlation between ethnicity
and poverty.10 There is clearly an issue of invisibility, unfulfilled promises, and lack of
representation in the development agenda.
Besides being invisible in country reports, indigenous peoples are also invisible in the
development of the MDGs framework and either excluded from the gains of development projects or
harmed by their implementation. Change in the framework of the MDGs is fundamental as a
safeguard from potentially devastating development projects and to repair for the current invisibility
of indigenous peoples in the country reports and in the design of development initiatives.

PRSPs are an example of the ideology of market fundamentalism core to the policies of IFIs. The list of
recommendations is the same (one-size fit all policies) regardless of the regions. The same recommendations appear in
PRSPs of diverse areas: Asia-Pacific, Africa, and Latin American and Caribbean. Focusweb. Whats in a name?: PRSP
and Structural Adjustment. Focus on the global south. Bangkok, Thailand. <www.focusweb.net>.
9
United Nations Permanent Forum on Indigenous Issues
10
United Nations Permanent Forum on Indigenous Issues

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Furthermore, without international protection and guarantees of the rights of indigenous

peoples, there is no system of accountability for the corporate destructive power that often
accompanies development projects. However, the recent success of indigenous peoples at the
international level in the United Nations brings hope for the creation of a more equitable
development model that addresses these injustices.

Indigenous Peoples, the United Nations and Corporate Globalization

The approval of the Declaration on the Rights of Indigenous Peoples by the United Nations General
Assembly earlier this year is a historical success in times of widespread destructive capitalism and
corporate globalization that protect the interests of a powerful few at the expense of the environment
and people. Part of this historical success is that the Declaration recognizes their demand to fully
participate in all matters that concern them; from their right to remain distinct (preserving their own
culture, identity and language) to their right to pursue their own visions of economic and social
development, according to their own needs and aspirations. After over two decades of debate, the
Declaration also recognizes the individual and collective rights of the worlds estimated 370 million
indigenous people and outlaws discrimination against them.
Indigenous peoples experience the most difficult battle against corporate globalization. Their
distrust of development projects is rooted in numerous occasions when such projects and the
economic policies that accompany them have resulted in traumatic experiences.11 Because very often
indigenous peoples inhabit oil-rich fields, and as the World Bank promotes development through
export-led growth, the struggle of indigenous people for the respect of their basic rights has been
termed by the World Bank as conflict resolution. Since the beginning of the 1990s the World
Bank has given loans to oil-rich countries in the region under two main conditions: a reduction in the
role of the state in the oil industry through more privatization, and the promotion of legislation and
policies on the environment and indigenous peoples that place the World Bank as a facilitator of
conflict resolution. As such, the World Bank has placed itself in the position of weighing indigenous
rights against the economic interest of other stakeholders (meaning that of corporations).12

11

Such as in the case of Bolivia, later discussed in this paper.

Human Rights, Oil & Indigenous Communities: the World Bank in the Andean Region. Center for Economic and
Social Rights. Quito, Ecuador.< www.cesr.org>.
12

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It is no surprise that the U.S. was among the four member states that voted against the
Declaration since U.S. national interests and the IFIs drive corporate globalization and constitute the
major threat to the survival of the traditional sustainable livelihoods of indigenous peoples. Despite
the fact that the World Banks mission is to help the poor, it clearly promotes the interests of
multinational corporations and especially the U.S. need oil consumption needs.
While the IMF advocates for economic reform and collects dues from countries foreign
debts, the World Bank funds large-scale projects and settles disputes through an arbitration court,
and the World Trade Organization (WTO) sets the rules for global trade and investment. Together
they function as a world police that defends and secures the rights of multinational corporations.
They dominate the development debate by promoting deregulation of corporate activity and by
making it illegal for nations to protect their natural resources and to set labor, safety and
environmental standards in order to allow the free flow of investment and trade in all countries.13
Through trade and investment agreements supported and promoted by IFIs, indigenous
peoples find themselves at the forefront of the battle to defend the land they inhabit and to protect its
forests, mineral, water and genetic diversity. These battles have often resulted in the displacement of
entire communities and in the invasion of corporate interests on sacred lands. Corporate invasions
take the form of development projects such as dams, mines, pipelines, roads, food production for
export and the more recent boom in the expansion of plantations of biofuel also for export at the
expense of food and the exploitation of natural resources like water, oil, fish, forests, biodiversity
and medicines. 14
Many of these projects have been carried out in indigenous peoples territories, without their
consultation or consent, then violating their basic right to have control over their own territories and
resources. In addition, they have resulted in the displacement of tens of thousands of indigenous
peoples from their own ancestral territories and even in the arrest, torture and killing of activists and
leaders of protests against such projects on many occasions. Development projects financed by IFIs,
rather than alleviate poverty, have worsened social problems.15
Privatization initiatives under SAPs have had devastating consequences for indigenous
peoples as well as for the environment. The privatization of government-run public services is
13

Cavanah, John and Jerry Mander, ed. Alternatives to Economic Globalization. San Francisco, CA. 2004
United Nations adopts Declaration on Rights of Indigenous Peoples. United Nations News Center. 13 Sept. 2007
<http://www.un.org/apps/news/story.asp?NewsID=23794&Cr=indigenous&Cr1>.
15
Mander, Jerry and Victoria Tauli-Corpuz, ed. Paradigm Wars: Indigenous Peoples Resistance to Globalization.
California. October, 2006
14

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intended to address corruption, to run services more efficiently and to generate income that can help
alleviate poverty. However, the reality of SAPs shows that these programs turn into a source of
wealth creation for transnational corporations once these gain control of state agencies. In fact, there
is barely any indication of poverty reduction, environmental protection or service improvement.16
Despite vast indicators of failure of the development projects it finances, the World Bank
refuses to qualify indigenous sustainable practices as efficient sustainable development projects.
According to the Bank, the small-scale subsistence production that characterizes many indigenous
economies does not contribute to economic growth. Instead the Bank argues that developing
economies grow when subsistence lands are converted into large-scale, capital-intensive, exportoriented commercial production. These kinds of projects take the form of huge agricultural
monocrop plantations, commercial mines, and non-sustainable forestry practices, all of which drive
people from their lands by the millions.17
The success of indigenous movements in the international arena through the Declaration
comes at a crucial moment when alternative voices throughout the Americas are demanding
accountability for global rigged rules as well as participation in the creation of a model for
sustainable development that includes and works for everyone. The following case study is an
example of this demand and inspires the region as a story of grassroots success resulting in
leadership initiatives that are challenging corporate rule.

From Grassroots to Leadership. A Case Study: Bolivia

Bolivias recently stated plan to withdraw from the World Banks international arbitration court has
come as a surprise for many, and as inspiration for many more. This initiative presents an
opportunity for a case-study of the response from a country from the global south to the failed policy
recommendations and loan conditions of IFIs and countries from the global north. Bolivias
withdrawal from the International Center for the Settlement of Investment Disputes (ICSID) poses a
historical and political challenge within the region and a unique challenge to undemocratic global
trade rules.18
16

Ibid
Ibid
18
Food and Water Watch. Bolivia withdraws from World Bank Investment Court. 21 June 2007.
<http://www.foodandwaterwatch.org/water/right/icsid-letter>.
17

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Bolivias geographic location, natural resources, history of political and economic instability,
disparities, and its role in the drug war put the country in a key position within the context of NorthSouth politics and economic globalization. The grassroots success of the peoples struggle for the
recognition of water as a human right and the nations challenge to the power of IFIs in its sovereign
path to development provide an alternative to the neoliberal economic model and an example of selfdetermination to the region.

Water: a Human Right or a Private Good?

Recent social and political developments in Bolivia are the result of a wave of failed neoliberal
policies that had caused unrest in the population and a weak economy. Bolivias neoliberal economic
policy since the Sanchez administration (1993) was guided by the IFIs and characterized by
widespread privatization. Because Bolivia qualifies under World Bank terms as one of the Heavily
Indebted Poor Countries (HIPC) water privatization becomes a key condition for receiving loans and
as recommended as part of poverty reduction and structural adjustment programs. In fact, the IFIs
pointed at delays in privatizations as the reason for a slow growth and delays in poverty reduction.
Thus as recommended by the IFIs the Bolivian government sold many public enterprises to foreign
investors.19
In 1998, the IMF approved a $138 loan to Bolivia for economic growth and inflation control.
In exchange, it recommended Bolivia to privatize all enterprises that remained under state control at
the time including national oil refineries, the national airline, electric utilities, the national train
service and the local water agency in Cochabamba. It also recommended the government to cut the
subsidies for public services, given that these did not go along IMF and World Banks debt
reduction, inflation-control and foreign investment recipes for success.
In September of 1999, without consulting the people of Cochabamba the government
followed the advice of privatizing the municipal water system and signed a $2.5 billion contract to
sell it to Aguas Del Tunari, a subsidiary of Bechtel Corporation. Bechtel later announced that there
would be an increase of at least 93 percent in the price of water delivery and sewage connection by
the fifth year from the moment the water system was privatized. As residents of Cochabamba saw
their water bills double and triple, they mobilized, protested, went on strike in masses, and the city
19

Public Citizen. Water Privatization Case Study: Cochabamba, Bolivia.

<http://www.citizen.org/documents/Bolivia_(PDF).PDF>.

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was shut down for four days. By February of 2000, as the peaceful protests against nationwide
unemployment and an overall failed economy spread throughout the country, thousands of protesters
confronted violence from the armed troops and the suspension of constitutional rights.
An overwhelming majority of Bolivians in Cochabamba (96 percent) demanded that the
government terminate the contract, an idea the government absolutely refused. President Hugo
Banzer declared a state of siege, there was violence and repression on the streets resulting in many
wounded and one seventeen-year-old protester shot dead. Eventually the government ceded and
signed an agreement assuring Bolivians that Aguas del Tunari would withdraw. The agreement
granted control of Cochabamba's water to La Coordinadora (a grassroots coalition), and promised to
cancel the water privatization legislation, as well as legislation that would have charged peasants for
water drawn from local wells. 20
Aguas Del Tunari decided in November 2001 to appeal to the ICSID by accusing the
Bolivian government for its violation of a bilateral trade agreement when it asked Aguas Del Tunari
to terminate the contract. Aguas Del Tunari and Bechtel demanded $25 million in damages from the
Bolivian government. The impact on the economy would have been devastating, since while in the
year 2000 Bechtels revenues exceeded $14 billion, Bolivia had experienced a budget deficit of
about $500 million in 2004 with expenditures of about $2.8 billion and revenues of only $2.3
billion.21
In solidarity, in August 2002 more than 300 citizen groups from across five continents (41
different countries) filed a petition demanding the World Bank and the ICSID to respect peoples
right to participate in the public matter that affect their communities and nations. They also
demanded the need for public involvement and scrutiny by pointing at the secrecy of the tribunal and
by denouncing the illegitimacy of World Bank/ICSID handing of the case given its lack of
neutrality. As the petition stated,
It is well-documented that it was the World Bank itself which directly forced the government
of Bolivia to privatize the water system of Cochabamba, making that privatization a
condition for both debt relief and funds for water system expansion and thereby setting the
events of this case in motion. Additionally, during the water revolt in Bolivia in April 2000,
World Bank president James Wolfensohn personally made public comments about the case,
justifying water price increases. Further, despite the Bank's role in the history of this case,
20

Sheraz, Sadig. PBS Frontline. Timeline: Cochabamba Water Revolt. June 2002.
<http://www.pbs.org/frontlineworld/stories/bolivia/timeline.html>.
21
Library of Congress: Federal Research Division. Country Profile: Bolivia. January 2006.
<http://lcweb2.loc.gov/frd/cs/profiles/Bolivia.pdf>.

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Mr. Wolfensohn violated one of the most important principles of objectivity when he directly
appointed the President of the arbitration tribunal that will decide the case. These facts have
created strong and well-justified public doubt that ICSID can resolve this dispute fairly. 22
More recently, during a second opportunity the international solidarity with Bolivia that had
previously put pressure on Bechtel to drop its case against the Bolivian government, now circulated
a petition in support of the Bolivian governments decision to withdraw from the World Banks
undemocratic arbitration court. As President Evo Morales of Bolivia stated, Some multinational
companies take over our natural resources, privatize basic services, fail to pay taxes and then, when
they have no arguments in their defense, they go to the so-called ICSID. And then, in that World
Bank tribunal, no country wins against the multinationals. So why do we need an ICSID where only
the multinational companies can win?23 Civil society organizations from around the world
supported Morales by condemning the tribunals grant of excessive powers to multinational
corporations through bi-lateral investment and free trade agreements at the expense of democracy,
the environment and public welfare. 24

Bolivia after the 2005 elections

Social movements in Bolivia have resulted in a power shift that has put the nation at the forefront of
the regional battle to address and correct historical injustices. As a result of massive mobilizations
and the democratic election of Evo Morales in 2005, the political and socio-economic landscape in
Bolivia has undergone dramatic changes. Morales is an Aymara Indian and the first indigenous
president elected in Bolivia. He is also a coca union leader and activist who ran his election
campaign under the banner of nationalization of the oil and gas industry, land reform to address its
very unequal distribution and the proposal of a controversial reform to the Constitution. 25
His decisions have been welcomed by the majority of the Bolivian people, and yet have received
harsh criticism by the Bolivian elite and the global corporate and foreign investment sector. In
support of his decisions former World Bank Senior Vice President and Chief Economist Joseph
22

See Petition on the Democracy Center site:

<http://www.democracyctr.org/bolivia/investigations/water/international_petition.htm>.
23
Observatorio de Derechos Economicos, Sociales y Culuturales, CIADI/Telecom Italia: hands off Bolivia! 07
December 2007 <http://www.desc.org.bo/noticia.php?cod_noticia=NO20071207164131>.
24
Food and Water Watch. Bolivia withdraws from World Bank Investment Court. 21 June 2007.
<http://www.foodandwaterwatch.org/water/right/icsid-letter>.
25 Monte and Mufson. Washington Post. Bolivian President Seizes Gas Industry. 2 May 2006.
<http://www.washingtonpost.com/wp-dyn/content/article/2006/05/01/AR2006050100583.html>.

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Stiglitz defended Morales plan to nationalize the countrys gas and oil industry by pointing at the
unfair and maybe even illegal nature of the contracts signed by previous administrations. Bolivia
received only 18% of the proceeds! Bolivians wonder why investments of some $3 billion should
entitle foreign investors to 82% of the countrys vast gas reserves, now estimated to be worth $250
billion.26 It is clear to both President Morales and Economist Stiglitz that in order to correct this
injustice it was necessary to revise investment agreements.
The Morales administration is now in the process of restoring the failed state-owned oil
company as well as nationalizing a great part of gas production, transportation, refining and other
industries. The government also plans to increase its control over other sectors, such as mining,
electricity, telecommunications, transportation and forestry.27
When Morales assumed power he found obstacles that did not allow him to fulfill his
promises due to bilateral investment agreements that previous governments had signed. These
agreements provided foreign investors with the right to file lawsuits through international tribunals.
He then considered the renegotiation of contracts with foreign investors in order to increase revenues
to the government. Due to the ICSIDs bias as an arm of the World Bank ruling against governments
and in favor of multinational corporations, the Bolivian government withdrew from the court.
International mobilization in solidarity with Bolivias poor, from both North and South once again
supported the Bolivian peoples initiative to amend corporate injustice by condemning the case and
succeeding pursuing its withdrawal from the Court.

Debt Cancellation and an Alternative to the IFIs

In a world of tightening global economic rules, most written to favor corporations just like Bechtel,
ICSID has become a major policeman.28 But as Bolivia takes the lead, a backlash to excessive
power granted to the rights of multinational corporations has begun to spread throughout Latin
America. President Morales decision to pull out of the ICSID is not the only challenge to
neoliberalism and the hegemonic power of the World Bank and other IFIs. Following the steps of
26 Stiglitz, Joseph. Economists View. Nationalization of Bolivias Energy Resources Driven by Commendable
Democratic Progress. 5 July 2006.< http://www.project-syndicate.org/commentary/stiglitz71.>.
27
CIA, the World Factbook: Bolivia <https://www.cia.gov/cia/publications/factbook/geos/bl.html>. There is currently a
dispute over Telecom Italias investment at the ICSID even though it was after Bolivia had already withdrawn.
28
The Democracy Center. Bolivia Pulls Out of World Bank Trade Court. 3 May 2007.
<http://www.democracyctr.org/blog/2007/05/bolivia-pulls-out-of-world-bank-trade.html>.

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Bolivian President Evo Morales, leaders from Venezuela and Nicaragua have announced their plans
to end their participation in the ICSID.
Venezuela, Nicaragua, Ecuador and Argentina have also taken the initiative of addressing
historical injustices. Venezuela has paid off its debt far in advance, pulled out of the IMF and the
World Bank and proposed the Bank of the South to substitute for international lenders backed by
Washington. Nicaraguan President Duarte is expecting the IMF to write off the countrys debt and to
also withdraw from IMF entirely. President Correa, from Ecuador, has paid its debt and asked the
IMF to leave. President Kirchner from Argentina has paid off the nations debt as well and together
with President Hugo Chavez from Venezuela, announced earlier this year that both governments
would establish a Bank of the South.

Debt Cancellation
The grassroots from North and South have been collaborating in their demand for justice by urging
the cancellation, audit and citizen control of debt as well as accountability of both borrowers and
creditors. The movement also urges a radical change in the hegemonic neoliberal model: change in
trade patterns and in the architecture and mechanisms of IFIs through their removal of harmful
economic policy conditions like the liberalization of trade, investment and the free flow of capital.
The cancellation of debt is not only necessary to reach the MDGs, but it is also a legitimate
means to correct historical injustices and to achieve genuine economic development. The grassroots
from North and South are holding their governments and the IFIs accountable for odious debt, a
legal concept that applies to situations when borrowing governments used the funding for personal
purposes or to oppress the people. Creditors are charged with the commitment of hostile acts against
the people in cases when they funded governments knowing that they acted against the interest of the
people.
Due to the limits of the legality behind the term odious debt, the movement often refers to
illegitimate debt to imply the debt burden on countries from the global south based on historical
injustices backed by the global north. Among these injustices are the environmental and social
damage from a debt burden that has had a greater impact on the most vulnerable peoples and
communities.

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Jubilee South, the global south grassroots of the debt cancellation movement, claims debt
illegitimate by pointing at the fact that creditors were fully aware that the loans granted were stolen
by the borrowing corrupt government officials to fund huge projects with devastating effects for
entire communities and to purchase arms that committed gross human rights violations.
Accountability of creditors and borrowers is growing throughout the region with the proposal
of a South American audit, the result of an Ecuadorian leadership initiative.29 For this unprecedented
government-backed audit proposal a commission was created to investigate potential irregularities in
loan contracts, unfairness in the amount of interests on loans and the social and environmental
impacts of the projects financed by those loans.
In addition, throughout Latin America bottom-up alternatives are emerging as a consequence
of the frustration with unmet demands to reform the IFIs. Given that core to the debt problem is the
global neoliberal economic system, reform in the institutions that perpetrate this injustice is not
enough for a lasting solution but instead, change in the whole system. Within this framework two
main bottom-up initiatives are being developed: new sources of financing and loans that do not
dictate or advance the agenda of corporate globalization but address the social and environmental
needs in the South and alternative regional agreements based on cooperation and solidarity among
the peoples of the South.

Bank of the South

The most recent initiative as an alternative to the global hegemony of Northern countries and the
IFIs is the creation of the Bank of the South. This initiative has been supported by the governments
of Venezuela, Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay, and Uruguay. It has the
potential to become an opportunity not just for South America but also for Latin America, the
Caribbean and other regions of the global south. The proposal is born within the context of a history
of struggle against dictatorships throughout the continent and constitutes a space for participation in
the design of its architecture and therefore for really representative and participatory democracy.
Fundamental to this initiative is for the Bank to build mechanisms that provide an incentive
for solidarity among the peoples of the South in order to cut with Latin American dependency on the
traditional mechanisms of the IFIs. Among the objectives for the creation of the bank is a vision for:
29

Jubilee Debt Campaign. Ecuador instigates debt audit. 26 September 2007.

<http://www.jubileedebtcampaign.org.uk/?lid=3635>.

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the promotion of development initiatives generated by the people with the fundamental mission of
respect for the peoples sovereignty over their territories; solidarity; sustainability and ecological
justice through the responsible self-determination of economic, social and environmental policies;
and the all-inclusive objective of human and social development.
In contrast to the IFIs and their expansion of corporate globalization the Bank of the South
advocates for human-centered and human-rights conscious development by promoting the creation
of jobs with dignity, guaranteeing access to nutritious food, health, shelter and universal free basic
education, the distribution of wealth to address gender and ethnic inequalities and the reduction of
greenhouse gases.
In contrast to the World Banks secrecy, which does not disclose documents of its structural
adjustment initiatives, transparency and equality must be core to the Banks functioning and
architecture by granting one vote per member and with a public system of accountability. In order to
avoid this bottom-up initiative to become yet another bureaucratic institution that advances the selfinterest of a few government officials and elites, it is necessary to guarantee the participation of and
consultation to civil society.
For the Bank of the South to be a truly bottom-up alternative it is crucial that governments
work along civil society organizations and social movements not just during the development of its
architecture but also on decision-making, the implementation of projects, and accountability for
funds and loans. Moreover, for its policies to be human-centered the Bank should prioritize
economic justice and solidarity as core values in trade agreements by meeting the needs of family
and small farms and businesses, the cooperative sector, traditional and indigenous communities,
women-started organizations, among others. It should finance investment projects for local
development such as those that promote food and energy sovereignty. 30

Alternative Integration and Development Models

Other initiatives are emerging that accompany the mission of the Bank of the South with the
common goal of building sustainable communities, regional integration and models of collaboration
for and by Latin Americans. The building of strategic partnerships among peoples throughout the
30

Observatorio de Derechos Econmicos, Sociales y Culturales. Carta abierta por un Banco del Sur orientado a una
matriz soberana, solidaria, sustentable e integradora para el desarrollo del continente. 5 December 2007.
<http://www.desc.org.bo/noticia.php?cod_noticia=NO20071205113247>.

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Hemisphere is responding to growing awareness of the need for an alternative development model
that is democratic and truly representative of the peoples of the Americas. The Bolivarian
Alternative for the Americas (ALBA in Spanish: Alternativa Bolivariana para las Amricas) and the
Peoples Trade Agreement (TCP in Spanish: Tratado de Comercio para los Pueblos) are two
examples of proposed human-centered models of regional integration as opposed to the Free Trade
Area of the Americas (FTAA).31
The FTAA was proposed in 1994 with an initial implementation deadline by the year 2005 as
an expansion of the North American Free Trade Agreement (NAFTA) to Central America, South
America and the Caribbean. The grassroots mobilization from North and South opposed it on the
grounds that it constituted a means to the global race-to-the-bottom that threatens peoples
livelihoods, the environment and democracy by putting commercial interests and corporate profits
over human rights. Four years ago the negotiations to create the FTAA came to an end and a number
of governments that opposed it began to develop regional alternatives.
The development of alternatives has focused on the criticism of the architecture and values
fundamental to the FTAA. The FTAA was written without input or participation from citizens and
has been thus criticized for the non-democratic development of trade policy. The proposal
undermines labor rights and advances a race-to-the-bottom in which multinationals are able to
exploit workers without any sort of government interference. Under the FTAA when workers
unionize and demand their rights by advocating for standards in their working conditions foreign
companies threaten to transfer production somewhere else. The government is legally bound to offer
no protection for the people but for corporate rights. The proposed FTAA would also exacerbate
environmental destruction as demonstrated by the export-led growth and industrialization model
promoted by both the U.S. and the IFIs. It would also hurt family farmers by favoring big U.S.
agribusiness over traditional, local and sustainable production. Finally, the agreement would have
spread the use of GMOs favored by the patent rights system under the WTO rules.32
In response to an emerging regionalism in opposition to the FTAA the United States began
to push for the signing of bilateral trade and investment agreements with countries throughout the

31

Bilaterals.org TCP: for a just trade between peoples. 13 April 2006

<http://www.bilaterals.org/article.php3?id_article=4585>.
32

Global Exchange, Top ten reasons to oppose the Free Trade Area of the Americas.
<http://www.futureoftheunion.com/docs/Top10NoFTAA.pdf>.

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Hemisphere by exerting diplomatic pressure through aid and with the support of the neoliberal
recommendations of the IFIs.
With the Central American Free Trade Agreement (CAFTA) the U.S. has managed to begin
to dominate the Central American region by pushing its national security agenda through antiterrorism policies, the dumping of subsidized commodities and the exploitation of their natural and
human resources by securing corporate rights over the rights of communities and workers.
As part of this bilateral strategy the U.S. has tried to start bilateral negotiations with Ecuador,
Bolivia, Colombia and Peru, which are strategically significant to isolate Venezuela from the rest of
the Andean Community. However, since the election of democratically-elected progressive leaders
in Ecuador and Bolivia these latter have joined the movement for regional integration instead. On the
other hand, the U.S. government recently signed an FTA with Peru and there is one pending in
Congress with Colombia.33
In 2005 Venezuela and Cuba began to implement their vision for integration in the region
through an alternative group of values: solidarity, complementarity and cooperation rather than
competition and free trade (deregulation, liberalization and free flow of capital). ALBA and TCP
seek to counter the FTAA and FTAs where these traditional economic models failed. Fundamental
to the development of ALBA and TCP are then: complementarity among countries, a healthy and
respectful relationship with nature rather than its exploitation, the improvement of living standards,
the defense of public and social property rather than extensive privatization, the promotion of
cultural diversity rather than the homogenization of culture through the expansion of a culture of
consumption, individual wealth accumulation and competition, and the sustainable, democratic and
equitable development that results from citizens participation in the proposal of solutions to
problems that affect them. 34
The TCP was proposed first by President Evo Morales of Bolivia as an alternative to the Free
Trade model. It strictly opposes the neoliberal model through which a few powerful Northern
nations impose their vision of development in the South. Instead, the Treaty gives the opportunity
for nations to focus on their internal needs and to address social ills that have resulted from previous
bilateral investment and trade agreements.

33

James, Deborah. Global Exchange Strategies from the South: The alliances and alternatives that aim to defeat

corporate-driven trade. 01 June 2004 <http://www.globalexchange.org/campaigns/ftaa/2914.html>.

34
Foro Mundial de Alternativas. ALBA-TCP. 2005. <http://www.forumdesalternatives.org/albatcp.php>.

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21

Born as a response to the well-known failures of Free Trade Agreements (FTAs) signed with
the United States like the North American Free Trade Agreement (NAFTA), the Treaty is concerned
with the death of the countryside and the resulting inequalities from those models. As a consequence
of the implementation of NAFTA Mexico has dealt with the destruction of the small and mediumsized industries and the privatization of large-scale industrial sectors as imposed by the neoliberal
panacea of export-led growth. As a consequence, farmers were displaced from their land and the
market as a consequence of the illegal dumping of crops at below the cost of production by
multinational agribusinesses. Mexico went from being self-sufficient and an exporter of basic foods
to importing 40% of the cereals and oil-based products for domestic consumption. 35 By the year
2006 Mexico had lost over two million jobs from the agricultural sector and forced up to 1.7 million
small farmers from their land and into urban areas in Mexico or up North to the United States.
Meanwhile, the U.S. responded by militarizing the border, resulting in the death of about 3000
migrants after trying to cross the border since 1995.
A more recent example of failed FTAs is the one signed with Peru. The case of Peru is
almost identical to Mexicos in terms of its agricultural sector. A large segment of Peru lives in rural
areas and the country is heavily dependent on small-scale farmers for the production of staple crops.
The consequences will be also devastating. Farmers will see themselves forced to leave their land
since the agreement requires Peru to remove the tariffs that protect it from the dumping of U.S.
agribusinesses. They will migrate to urban areas in search for jobs and also to the North to encounter
the militarized response of the border with the United States.36
The TCP, on the other hand, addresses the countrysides death by protecting small-scale
farmers through the promotion of food sovereignty, the rights of the people to define their own
agricultural and food policies and the protection of peoples rights and privileges above the rights of
agro-industries. The Treaty emphasizes trade integration through cooperation, solidarity,
complementarity, reciprocity, prosperity and respect for the diverse countries sovereignty. It also
addresses the long term goals of responsible poverty reduction, the preservation of indigenous

35

Bilateral.org. TCP: For a Just Trade between Peoples. 13 April 2006.

<http://www.bilaterals.org/article.php3?id_article=4585>.
36
Olson, Dennis R. Institute for Agriculture and Trade Policy, Trade deals ignore agricultural impacts on immigration.
03 December 2007. <http://www.iatp.org/iatp/commentaries.cfm?refID=100988>.

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communities traditional livelihoods and the respect for the environment. Thus trade and investment
become, rather than an end in itself, a means toward development.37
As an alternative to the FTAs secrecy, lack of transparency and undemocratic character, the
TCP promotes a sustainable economic model that aims at the improvement of human development
and full participation of the people through collective decision-making. In addition, the TCP differs
from FTAs in that the former promotes integration of the peoples under agreements that limit and
regulate the rights of foreign investors and multinationals so that they serve the purpose of national
productive development. Rather than masters, countries and corporations in the agreement become
peoples partners. Another factor that defines the difference between the TCP and FTAs is that the
former puts an end to unfair competition with powerful multinationals by prioritizing national
companies, especially those from historically marginalized groups: ethnic groups, women,
cooperatives and community-based companies.
Finally, TCP promotes an indigenous vision of development as opposite to the expansion of a
system that is based on a culture of consumption and waste and the unrestrained exploitation of
natural resources, people, and the environment. Such an indigenous vision presents an opportunity to
address the threat of global warming as a human-caused disaster by placing at the forefront of the
TCP indigenous communities who have lived in harmony with nature for millennia and the
relationships between human beings as a model based on co-existence among people and with nature
rather than individualism.
Despite the increase in the development of local and regional bottom-up alternatives and
partnerships to the very irresponsible hegemonic capitalist system there is a boom in the demand of
false solutions that rather than mitigate, further the global problem of climate change. One growingly
popular false solution is countries production of biofuels; a threat to advances in economic, social
and environmental justice throughout the Southern Hemisphere.

New Challenges
In spite of the collaborative work of the grassroots from the global north and South and in spite of
the election of progressive leaders throughout Latin America, the common global threat of the

37

Criticism of the TCP from the grassroots points at its focus on trade as a development model, which barely
differentiates it from traditional FTAs.

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23

devastating effects of climate change is dividing North and South in the development of solutions.
Rather than a threat to the improvements in the socio-political environment of the Americas, the
mitigation of climate change should be an opportunity for collaboration. Leadership in Latin
America should be representative of the peoples thus focusing on initiatives that protect food
sovereignty and promote energy sovereignty locally, nationally and regionally.
Unfortunately, the majority of the leaders in the region that could be playing a role in the
development of truly green, sustainable and human rights-conscious initiatives are instead
advocating for the interest of multinational corporations from the big agro-industry. Some
government leaders have taken advantage of a concerned civil society that is demanding a rapid
response to a global problem with the proposal of false solutions. On the other hand, social
movements throughout the Hemisphere are calling for true representation by criticizing the current
boom on agrofuels (generally known as biofuels38).
Agrofuels are being promoted as a panacea for the mitigation of climate change, as green
energy that can substitute oil and as a development opportunity for the rural poor in developing
countries. However, the boom in agrofuels that is responding to the growing demand for green and
clean energy does not address the social and environmental disasters behind it.

Agrofuels: a problem, not a solution

The Special Rapporteur to the United Nations General Assembly, charged by the Commission on
Human Rights with the task of identifying emerging issues related to the right to food worldwide,
recognized the potential of biofuels for a grave negative impact. There is concern that agrofuels will
bring hunger as nations rush to convert food into fuel thus creating a battleground where the
competition between food and fuel results in rising prices of food, land and water. The Rapporteur
states that unless biofuels contribute to the development of small-scale peasant and family farming,
their production is a recipe for disaster.39

38

Biofuels as a general term are clearly distinct from agrofuels. Agrofuels imply the production of fuel from crops like
soy, sugar cane, palm oil and other food crops and these are not biofuels per se. Using the term agrofuels highlights
how the interests of the agro-industrial monopolies will dominate over the interests of the worlds poor and hungry,
especially in the global south.
39
Officer of the High Commissioner for Human Rights. Special Rapporteur on the right to food. August 2007.
<http://www.unhchr.ch/html/menu2/7/b/mfood.htm>.

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There a number of myths around the promotion of agrofuels as a clean and green source of
energy and as a development project for the rural poor in the global south. In fact, many have hurried
to point at the role of agrofuels in Latin America in the transformation of region into the next Persian
Gulf given its potential to become the energy supply for wealthy countries in the global north.40
First of all, in order to promote agrofuels as a source for clean and green energy their full life
cycle must be considered. The saving of greenhouse gas emissions when fuel crops substitute fossil
fuels are minimum when considering the negative impacts of industrial monoculture production on
the environment, people and climate. The assessment of the life-cycle of fuel crops suggests that
these actually increase carbon emissions through: massive land clearing in deforestation, burning,
the degradation of peatlands, depletion and erosion of soil, contamination of waterways, and the
increase in the use of toxic chemicals and petroleum-based fertilizers with high nitrogen emissions
and toxic agrichemicals. The clearing of tropical forests for the production of sugarcane ethanol for
example, emits 50 percent more greenhouse gases than the production and use of the same amount
of gasoline. In addition, the production of agrofuels in industrial agriculture uses petroleum-based
fertilizers. The use of these fertilizers contributes to the emissions of nitrous oxide, which is a
greenhouse gas 300 times more potent than carbon dioxide. As explained by Eric Holt-Gimenez
from Food First,
To produce a liter of ethanol takes three to five liters of irrigation water and
produces up to 13 liters of waste water. It takes the energy equivalent of 113 liters of
natural gas to treat this waste, increasing the likelihood that it will simply be released
into the environment to pollute streams, rivers and groundwater. Intensive cultivation
of fuel crops also leads to high rates of erosion, particularly in soy productionfrom
6.5 tons/hectare in the U.S. to up to 12 tons/hectare in Brazil and Argentina.
The promotion of agrofuels as beneficial for the rural poor in Latin America must also take in
consideration the negative impacts of monoculture production. In Latin America, monocultures of
soy and sugar cane have led to massive deforestation, the often violent displacement of indigenous
people, and food insecurity as the use of land diverts from the production of food for local
consumption to the production of agrofuels for export to wealthy countries with excessively high
energy consumption patterns. In addition, abuses of workers in sugar cane and soy plantations grow
as the demand for their production increases in the north and government officials hide them behind
their own self-interest and that of their agribusiness allies.
40

Sanchez, Marcela. Washington Post. Latin America: The Persian Gulf of biofuels? 23 February 2007.
<http://www.washingtonpost.com/wp-dyn/content/article/2007/02/22/AR2007022201361.html>.

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There is also a myth behind the promotion of agrofuels as an opportunity for the rural poor
and there needs to be accountability for the real number of jobs created and to the real winners.
While in the tropics 35 jobs are generated by family farming per 100 hectares, only 10 jobs are
generated from the production of sugarcane, 2 from eucalyptus, and only one half-job with the
production of soybeans. It is the coalition of the powerful oil, grain and genetic engineering big
corporations that benefit from the growing boom. In the meantime, in the area named as the
Republic of Soy that covers over 50 million hectares from southern Brazil, northern Argentina,
Paraguay and eastern Bolivia, the consequence has been the displacement of hundreds of thousands
by soybean plantations.
In the case of Brazil for example there are more issues to ethanol production than the mere
leadership position in the world as an exporter and its thirty years of experience in the biofuel
industry. Brazil is the main exporter of ethanol to the United States, the reason why President Lula
and President Bush want to launch an energy partnership that supposedly puts biofuels as a great
point of convergence for the Americas as stated by the president of the Inter-American
Development Bank (IDB) Alberto Moreno.41
The Brazil-U.S. energy partnership in 2006 resulted in Brazil exporting over 100 million
gallons of fuel-grade ethanol to the United States.42 What the IDB and both government leaders do
not mention in this partnership is the impact of the sugarcane industry on Brazils working poor.
Brazils sugarcane plantations are well known for their use of child labor and for the poor worker
health conditions that result from the burning of cane fields. In addition, a decline in the income of
sugarcane plantation workers by half over the past twenty years uncovers the myth of poverty
reduction in this development initiative.43
Solidarity throughout the Americas is challenging the promotion of agrofuels as a means for
poverty reduction in developing countries by recognizing that it actually benefits corporate industrial
agriculture at the expense of the people and the environment. The grassroots in the United States has

41

Sanchez, <http://www.washingtonpost.com/wp-dyn/content/article/2007/02/22/AR2007022201361.html>.
Ethanol import data based on United States International Trade Commission data http://dataweb.usitc.gov..
43
Rodrigues, Delcio and Lucia Ortiz. Case Study Sugar Can Ethanol from Brazil: Sustainability of ethanol from brazil
in the context of demanded biofuels imports by the Netherlands.
<http://www.saveourenvironment.org/factsheets/biofuel_imports_in_the_senate_energy_bill-friends_of_the_earth.pdf >.
42

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written a moratorium against US incentives on agrofuels, agroenergy monocultures and global trade
in agrofuels in solidarity with the concerns from the global south.44

Conclusion
Economic growth and modernization along Western standards are not a viable option given the
devastating consequences we observe today. Industrialized capitalism is not a development model
that ought to be pursued by the global south given its impact on climate change. Today, the concept
of environmental justice is pointing at the disparities in the effect of a changing climate on the world
population. Even though it is the wealthiest nations who have played a greater role in greenhouse gas
pollution, it is the poorest and most vulnerable that will suffer the most adverse effects of climate
change. Neither the current American lifestyle of excessive energy consumption nor the
aggressive industrialization of developing countries can sustain themselves. Today, both the global
north and south are working together in the creation and adoption of initiatives in an effort to
develop prevention strategies.
For alternative models of development to succeed in addressing todays social and
environmental harms these must address the broader industrial complex where the problem of
human-caused rapid change in climate is rooted. Cultural, social and economic rights must be core to
the policy agenda of governments and international institutions. Decisions must be made with
special consideration of current disparities, of the lack of fair political representation, and in order to
favor equal access to nutritious and healthy food, drinkable water, housing, basic education and
health care. Regional integration, solidarity throughout the Americas, and economic, social and
environmental justice are fundamental in the proposal of alternative development models.
There is an emergence of new obstacles that offer both a challenge and an opportunity for
collaboration: the displacement of peoples throughout the region, the rise in unrecognized economic
and climate change refugees, the growing loss of cultural and ecological diversity, the threat to food
sovereignty and security, and an agenda of militarization in the region for the protection and control
of scarce resources that the developed world needs in order to meet its excessive energy
consumption.

44

Rainforest Action Network. Call for an immediate moratorium on US incentives for agrofuels, US agroenergy
monocultures and global trade in agrofuels,< http://ga3.org/campaign/agrofuelsmoratorium>.

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Even though the forces of globalization seem to imply the hegemony of the world market, the
challenge from grassroots in both North and South is gaining momentum. After the Cold War and
the apparent repudiation of the socialist and communist models, powerful nations and institutions set
the agenda for developing economies in an attempt to advance global capitalism. As social
movements emerged in response to growing disparities and exploitation, dictatorships and repressive
regimes took over. In many cases, these were supported and even backed by the United States.
International lenders such as IFIs and other developed countries turned a blind eye to the human
rights abuse and corruption and took the opportunity to further their agenda by lending huge
amounts of money for devastating development projects. Once these dictatorships came to an end,
like in the cases of Argentina and Nicaragua, weak and fake democracies were put in place that
agreed with the modernization theory and thus followed the Western ideal of integration to the
global market.
Awareness of a history of exploitation, interventions, the shadow of dictatorships, and the
disregard for socioeconomic rights, remain as key to the future of relations between Latin America
and the United States. Many Latin Americans have seen no peace, not only in the presence of war
and conflict, but also in the absence of respect for human dignity and basic rights. Whereas some
regimes have come to an end, sham democracies have often replaced them, amnesty has been
granted to powerful crime perpetrators, and mass graves, serious killings and disappearances kept
secret. In the meantime, political, economic and military power kept accumulating in just a few
hands, benefiting large landowners, banana tycoons, US-friendly corporate cronies, and a business
elite that favors a vision for development on the basis of economic growth through rapid
industrialization, destructive capitalism and the institutionalization of a consumerist culture that
threatens the rich and diverse number of identities, values and traditions.
Latin America has paid a high price in being obedient to the agenda of the IFIs and its
economic and militarily powerful neighboring country, but the region is reaching a turning point of
realization that its very survival and progress lie in its own grassroots, in the unity of its voices, and
in the growing strength of its social movements. Despite the challenges and threats of a globalized
corporate economy, there is hope in the force that also globalizes values of economic and social
justice, builds relationships and partnerships across borders, and foments solidarity among peoples
that fight the same fundamental battles and strive for the respect of the same fundamental rights.

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