Transport barges navigate one of the branches of the Paraná River in Argentina's Santa Fe province. The Paraná, the second longest river in South America, has been turned into a major waterway through which a large part of Paraguay's and Argentina's agricultural exports are shipped out of the region. CREDIT: Fundación Humedales

By Daniel Gutman
BUENOS AIRES, Sep 29 2023 (IPS)

In addition to being a majestic river – the second longest in South America after the Amazon – the Paraná River is the waterway through which a large part of the area’s primary goods are exported. Today, its economic importance has sparked an unexpected diplomatic conflict between Argentina and the countries with which it shares the basin.

Argentina’s decision to charge tolls to vessels on its stretch of the river led to a formal complaint from Paraguay, Brazil, Uruguay and Bolivia, which argue that the river corridor agreement signed by the five countries in 1994 stipulated that no taxes or tariffs could be imposed without the approval of all parties.

The Paraguay-Paraná Waterway River Transport Agreement created an Intergovernmental Committee as the political body that would ensure its operation and maintain it as a motor for the development of the Southern Common Market (Mercosur), established by Argentina, Brazil, Paraguay and Uruguay in 1991 and later joined by Bolivia.

Tension reached unprecedented levels with Paraguay, a landlocked country that owns a gigantic fleet of ships that carry millions of tons of soybeans and beef, the engines of its economy, to the Atlantic Ocean and often return with fuels, essential to supply a nation that produces no oil or gas.

“What is happening is very serious. Paraguay has invested three billion dollars in the last 10 years and has 2,500 transport barges, one of the largest fleets in the world,” Andrea Guadalupe, vice-president in Argentina of the Mercosur-Southeast Asia Chamber of Commerce, which groups export companies from different countries, told IPS.

“It is not wrong for Argentina to charge a toll, because it carries out dredging and beaconing works that allow large ships to pass through the Paraná. But what is wrong is that it has not consulted the other countries and has taken a unilateral decision,” she argued.

Paraguayan Pesident Santiago Peña announced that he would resort to international arbitration, saying that his country’s sovereignty was at stake, and stating: “Paraguay has no future without the free navigability of the rivers.”

Although Peña denied that it was a reprisal, Paraguay announced this September that it would keep half of the electricity from the Yacyretá power plant located on the border between the two countries, on the Paraná River, which has an installed capacity of 3,200 megawatts.

Traditionally, although it is entitled to 40 percent, Paraguay has kept only 15 percent of Yacyretá’s energy and ceded the remaining 85 percent to Argentina, a country with a population of 46 million inhabitants, six times larger than Paraguay’s, which means it obviously consumes more energy.

The Rio de la Plata, seen from Buenos Aires, is at the mouth of the Paraná River and leads to the Atlantic Ocean, allowing the transportation to the export markets of a large part of the agricultural products of one of the most productive areas of South America. CREDIT: Daniel Gutman / IPS

Argentina says it invests between 20 million and 25 million dollars a year in dredging work on the Paraná, which in recent years has become more necessary due to a persistent drop in the water level, which has forced barges to carry less cargo and has increased the companies’ logistical costs.

“The situation is affecting the relationship between two countries that are brothers. Argentina’s attitude is not in line with the agreements, and Paraguay is a landlocked country that needs the river to connect with the world,” Héctor Cristaldo, president of the Union of Production Chambers (UGP), which groups Paraguayan agricultural business chambers, told IPS.

Cristaldo said the main impact for Paraguay is in the supply of fuels used for agriculture and livestock and also for land transportation. “Paraguay has no trains; everything moves on wheels,” he said.

The toll crisis escalated into open friction in early September, when a Paraguayan flagged barge heading north with 30 million liters of fuel was held up for several days by Argentine authorities who released it when it agreed to pay some 27,000 dollars in tolls.

The rate for vessels put into effect in January 2023 is 1.47 dollars per ton transported. It was set by the General Administration of Ports (AGP), the government agency that controls the Argentine section of the waterway.

The new toll drew a statement from the governments of Paraguay, Brazil, Bolivia and Uruguay, which expressed “special concern because it is a restriction on the freedom of transit” and asked Argentina to collaborate “to facilitate commercial transport, favoring the development and efficiency of navigation.”

Paraguayan President Santiago Peña (L) is greeted by his Argentine counterpart Alberto Fernández on Aug. 15, when he took office in Asunción. Relations between the two countries later deteriorated over navigation rights in the Paraná River basin. CREDIT: Presidency of Argentina

From Mato Grosso to the sea

The Paraná River, together with its tributary, the Paraguay River, form a waterway stretching almost 3,500 kilometers from Mato Grosso in west-central Brazil to its mouth in the Río de la Plata, which in turn flows into the Atlantic. The basin covers almost 20 percent of South America’s territory, and has an enormous biodiversity and a remarkable productive capacity.
The lower section, from the central Argentine city of Rosario to the mouth of the river, has been dredged to allow trans-oceanic vessels to pass through, carrying millions of tons of agricultural products for export each year. In total, some 100 million tons of goods are transported through the waterway every year.

The work began in 1995, when Argentina granted its section under concession to a consortium formed by the Belgian maritime infrastructure giant Jan de Nul and the Argentine Grupo Emepa, to be in charge of dredging and signaling. Thus, the river was deepened from its natural 22 feet to 34 feet from Rosario – the country’s main agro-industrial center – to the mouth.

Further north, the waterway is only 12 feet deep, which only allows the navigation of barges, with which Paraguay and Bolivia export a major part of their soybean production, which is transferred to larger ships in Rosario.

The following year, the Argentine Ministry of Agriculture authorized the cultivation of transgenic soybeans, which would lead to a major expansion of the agricultural frontier and great pressure from agribusiness to deepen the dredging of the Paraná, which crosses the most productive area of Argentina, so that larger ships could enter.

Map of the Paraguay-Parana waterway. CREDIT: Afip

Low cost transportation

“The Paraná was transformed into a waterway that began to fulfill a function analogous to the one played by the railroad until the first third of the 20th century: to facilitate the expansion of the productive frontier and to be a low-cost transit route,” wrote geographer Álvaro Álvarez, vice-director of the Geographic Research Center of the public Universidad Nacional del Centro.

Álvarez maintains that the Paraná today is “a key infrastructure in the insertion of the region as a supplier of commodities into the international economy, a process through which industrial agriculture, mega-mining and hydrocarbon exploitation have been degrading ecosystems for decades, expelling populations from territories and affecting the health of communities.”

One of the main questions about the waterway is that there are no studies of the environmental impact generated by the modification of the river and the constant traffic of large vessels.

Last year, the Argentine Association of Environmesntal Lawyers filed an injunction demanding environmental impact assessments, which is now being studied by the Supreme Court of Justice.

“The State presented a 30-year-old environmental impact study in the file. Since then there has been and there continues to be removal of thousands of tons of sediment from the riverbed, which in many areas is contaminated with agro-toxins from industrial agriculture, and it is not known how that impacts the contamination and the dynamics of the river,” Lucas Micheloud, a member of the Association, told IPS.

“It is not a matter of adapting the river to the size of the ships, but of the ships adapting to the river,” said Ariel Ocantos, a graduate in International Relations and member of the Ecologist Workshop of Rosario, one of the environmental organizations demanding greater citizen participation in the interventions carried out in the Paraná River.

“We made several requests for information to the government because we want to know if they are conducting environmental impact studies. There is very little information and we are demanding citizen participation, which is absolutely necessary,” he said.

Texcin, the garment plant built by Brazilian company Riachuelo near the airport in Asunción, under Paraguay’s maquila law, which offers tax exemptions and other incentives for export-oriented production. In the foreground a garment worker in training (“entrenamiento”). Credit: Mario Osava/IPS

By Mario Osava
ASUNCION, Apr 16 2016 (IPS)

“There were cases of people who stopped coming to work after receiving their first wages and then came back a few days later to ask if there was more work,” because they were used to casual work in the informal economy, said Ivonne Ginard.

Ginard, a human resources manager in the textile firm Texcin, was in charge of hiring the plant’s 353 employees and helping them make the transition from informal labour to working in a factory with set schedules, uniforms, safety measures and medical certificates to justify absences.

Texcin, a garment factory near the Asunción airport, is emblematic of the incipient industrialisation process in Paraguay, which is still an agriculture-based economy, where soy and beef are the main exports and informal employment is predominant in the cities.

The plant is a joint venture between members of the Paraguayan business community and Riachuelo, one of the biggest clothing brands in Brazil, where it has 285 stores and two industrial plants. Riachuelo decided to take advantage of the incentives provided by the law on maquila export plants, in effect in Paraguay since 2000, to produce clothing in this neighbouring South American country instead of importing from Asia.

The aim is to increase the number of workers twofold by the end of 2016 and to continue to expand, since the company has the space to build a new plant.

“Paraguay offers abundant, young, easily trained workers, cheap energy, and tax incentives for maquilas and duty-free zones, which make it possible to import raw materials tariff-free,” said Andrés Guynn, one of the Paraguayan partners, who heads Texcin.

“Our production is competitive with costs similar to those of Asia, with a big advantage in terms of time: it takes 90 days for products to be shipped from China to Brazil, while ours get to (the Brazilian city of) São Paulo in 72 hours, by truck,” he said.

“Under the maquila regime, 108 companies set up shop in Paraguay, 62 of them in the last two years, and 80 percent of them come from Brazil,” the director of the maquila sector in the Ministry of Industry and Trade, Ernesto Paredes, told IPS.

Maquila or maquiladora plants are built by foreign corporations, generally in free trade zones. They import materials and equipment duty-free for assembly or manufacturing for re-export, and enjoy other tax breaks and incentives, as well as more flexible labour conditions.

Texcin human resources manager Ivonne Ginard (right), next to the woman who trains the garment workers, Rosa Prieto. “Texcin changed my life,” said Prieto, who was a self-employed seamstress in the informal sector of the economy for 15 years, before she was hired by the company in January 2015. Credit: Mario Osava/IPS

“The maquiladora industry is dynamic, but it does not accept trade union freedom, it does not allow unions to be organised in its factories, which violates constitutional rights,” the president of the Confederation of the Working Class (CCT) labour federation, Julio López, told IPS.

Auto parts factories are predominant in the industry, in terms of both revenue and jobs generated by maquiladoras in Paraguay, Paredes said. He said the sector uses the “just-in-time” delivery system developed by Japan’s auto industry, which is an inventory strategy employed to boost efficiency and reduce waste by receiving goods only as they are needed in the production process, which cuts inventory costs.

The Japanese company Yasaki and Germany’s Leoni have recently set up plants in Paraguay, employing thousands of people, nearly all of them women, in the production of electrical car cables.

And Paraguay now has its first car assembly plant. A national company, Reimplex, began to assemble J2 cars for Chinese auto maker JAC Motors on the outskirts of Asunción on Mar. 28.

Clothing factories also employ large numbers of women.

In addition, the plastics industry is expanding fast in the eastern department of Alto Paraná, on the border with Brazil, Paredes said.

Cheap local labour, which he said is “low-cost not so much because of the wages paid, but due to the low social charges” and low taxes, are especially attractive for Brazilian companies. To that is added the cost of electricity, which is 63 percent cheaper than in Brazil, according to the head of the maquila sector.

One limitation is transport and energy infrastructure. “Roads, ports, highways, real estate – all of this is lacking, although Paraguay has been investing heavily in airports, hotels, and office buildings,” he said.

One solution would be to widen the two-lane highway between Asunción and Ciudad del Este, the country’s two main economic hubs. However, the plan is not to expand the existing road, but “to build a second highway exclusively for trucks and trade,” as well as a second bridge to Brazil, said Paredes.

Texcin’s textile warehouse seen behind a sign announcing the expansion of the plant which was built by Brazilian company Riachuelo with partners in Paraguay on the outskirts of Asunción. Credit: Mario Osava/IPS

Investment is also needed in another route for the transportation of heavy loads, the Paraguay-Paraná waterway, used to export soy.

“Better signalisation would double its capacity and speed up river traffic,” Gustavo Rojas, a researcher at the Center for Economic Analysis and Dissemination in Paraguay (CADEP), told IPS.

This land-locked country of 6.8 million people has the world’s third-largest river barge fleet, as well as shipyards that build them, which favours an increase in river traffic, Paredes said.

Electricity is, potentially, Paraguay’s biggest comparative advantage, since the country owns half of the energy from two huge hydropower dams: Itaipú, shared with Brazil, and Yacyretá, on the border with Argentina, with the capacity to produce 14,000 and 3,200 MW, respectively.

But it only began to use part of that energy when a power line from Itaipú to Villa Hayes, near Asunción, was completed in October 2013. The power line was financed by a Brazilian fund aimed at narrowing the development gap between countries in the Southern Common Market (Mercosur) trade bloc, made up of Argentina, Brazil, Paraguay, Uruguay and Venezuela.

Without an adequate distribution network, however, the new energy supply did not eliminate problems like the February blackout that left 300,000 homes without power in Greater Asunción.

Achieving a more secure energy supply “is a question of time,” said Guynn, who tried to place his company near the new power line.

The problem is that the national power utility, ANDE, does not have investment capacity, and “distribution is not secure and steady,” said Fernando Masi, founding director of CADEP, which carries out research on public policies and provides graduate studies in economy.

But the broad availability of energy is a new element drawing industries to Paraguay, since the other advantages, such as low labour costs and tax incentives, already existed before.

Cheap energy also tempted the British-Australian multinational metals and mining corporation Rio Tinto, which studied the possibility of producing aluminum in Paraguay, even if it had to ship in the raw material, bauxite, from far away, because electric power is the main cost of the aluminum industry.

But a major public campaign, which collected more than 100,000 signatures, managed to block the project, “which would consume more energy than all of the national industries combined,” while requiring subsidies and employing a relatively small number of people, Mercedes Canese, an engineer who was deputy minister of industry during the government of Fernando Lugo (2008-2012), told IPS.

However, another engineer, Francisco Scorza, who studied the case, said the Rio Tinto project became unviable because “China began to produce very cheap aluminum, at 1,200 dollars a ton, 40 percent less expensive than here, and Paraguay can’t afford to subsidise energy.”

CADEP’s Masi said attracting small and medium-sized industries is better for development and employment, but the maquila sector has limits. The auto parts industry, for example, is limited to producing wiring, “because there is no bilateral agreement with Brazil on the car industry,” he said.

Brazil demands that Paraguay stop imports of used automobiles, “a very high cost for Paraguay to pay,” as it has a large fleet of used Japanese vehicles known as the “Vía Chile” cars because they come into Paraguay through that neighbouring country.

The maquila industry only exported 284 million dollars worth of goods in 2015 – very little in comparison to Paraguay’s overall industrial exports of 3.0 to 3.5 billion dollars, said Masi.

Industrialisation in Paraguay “has taken off, but not at the fast pace that was expected,” he said, adding that improving energy and logistics infrastructure could help.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Chemical engineer Negumi Kosaka has been training for over a year, learning to manage each stage of the production of soybean oil and soymeal in the Angostura Agroindustrial Complex (CAIASA) in the industrial park in Villeta, Paraguay. Her parents, Japanese immigrants, grow soybeans in another region in this country, which is taking steps towards industrialisation with projects like this one. Credit: Mario Osava/IPS

By Mario Osava
VILLETA, Paraguay , Mar 26 2016 (IPS)

“I worked in many companies, in construction, fertilisers, chemicals, but none of them were as good as this one,” said Dario Cardozo, who works in the Angostura Agroindustrial Complex (CAIASA) grain reception facility.

The way he is treated by the owners and managers – “very educated people” – the better wages and the good working environment are the advantages stressed by the 32-year-old father of two – a veteran among the young people who work with him receiving and monitoring the trucks that come from the Paraguayan countryside laden with soybeans to be turned into oil and soymeal.

“We’re the face of CAIASA,” he told IPS, describing his job at the entrance to the complex, the biggest soybean crushing plant in Paraguay. Keeping things moving quickly as 500 trucks – the average traffic during harvest season – a day come in to unload their cargo is an important task, he said, because “for truckers, time is gold.”

Hired by the company after the plant began to operate in 2013 in Angostura, he has been able to build a house in a new neighbourhood of Villeta, where the plant is located in the industrial park on the banks of the Paraguay river. The home is modest, and unfinished: it still needs plaster and paint.

“We used to live with my father-in-law, but he died,” said Cardozo’s wife Lourdes Ramírez, who is happy about the health insurance and other benefits offered by CAIASA. “The bus brings my husband to the two-lane avenue” a few hundreds of metres away, “but when it rains they drive him all the way home,” she said, standing in front of her house.

Local shopkeeper Marina Cáceres, the owner of the La Carapegueña 2 Supermarket, told IPS that “My sales have gone up, there’s more money in the city in the past couple of years; in this block alone there are three CAIASA employees.” The La Carapegueña 1 Supermarket, “which belongs to my father-in-law”, is at the entrance to the city, she said.

Villeta, 45 km from Asunción, is still mainly a rural municipality. Half of its estimated 40,000 inhabitants still live in the countryside, Mayor Teodosio Gómez told IPS.

But the arrival of dozens of industrial companies, which have invested a combined total of 800 million dollars here in the last five years, is changing the landscape and living standards in this municipality in Paraguay’s Central department.

Two truck drivers rest while waiting to unload their cargo in the Angostura Agroindustrial Complex (CAIASA) soy crushing plant in Paraguay. Some 2,000 trucks haul soybeans to the plant, which receives an average of 500 trucks a day during the peak harvest season, and where it takes less than a day to unload even during the busiest periods. Credit: Mario Osava/IPS

Besides CAIASA, which is a joint venture between two global agribusiness giants, the U.S. Bunge and France’s Louis Dreyfus, another U.S.-based food corporation, ADM, has also set up an agroindustrial plant in the municipality, which is attractive because of its location where the Paraguay river narrows and deepens enough to handle large barges with a cargo capacity of over 2,000 tons.

The result is “low unemployment and violent crime levels,” said the mayor. Besides creating direct jobs, the industries have generated a market for different services and locally produced foods.

The town, founded in 1714 around a river port, where mainly oranges were shipped out, is now at the centre of a diversified economy which includes stockbreeders and small farmers, and is becoming “the industrial capital of Paraguay,” said Gómez.

A skilled local workforce is taking shape through training, of workers, technicians and managers, to prepare them to work in the new industrial plants.

Megumi Kosaka, a 28-year-old chemical engineer, has been in training for the past 15 months, learning to manage any sector of CAIASA, from the reception of soybeans, quality control, the furnace and water treatment to the production of soymeal, oil, and soybean husk pellets.

She is learning all of this “in theory and in practice,” sometimes filling in for the manager of a section for several days or weeks. “For me it’s great – I see all of the operations, I learn everything, I have the chance to work with a wide range of professionals,” she told IPS.

Her favourite area, however, is production. “The machines are like living things, which with small differences in what we do produce something different, in terms of the quality of the sub-product,” Kosaka said.

“If we dry them too much, the soybeans crack, they don’t produce as much oil as possible; you have to know the exact level of moisture…it’s interesting to see the changes, what works best,” she said.

Villeta Mayor Teodosio Gómez, seen here in his office, says his municipality will be the industrial capital of Paraguay, thanks to its location on the Paraguay river and its flourishing industrial park, just 45 km from Asunción. Credit: Mario Osava/IPS

The daughter of Japanese immigrants, Kosaka already worked in a small soy crushing plant. “In a big one like CAIASA they pay me a better salary to learn more; later I’ll pay them back for what I learned, with my work.”

Her long-term dream is to open a factory in Colonia Iguazú, where her parents and 200 other Japanese families live, in southeast Paraguay, near the border with Brazil. Like 90 percent of the country’s soy producers, farmers there grow soy but do not process it.

A crushing plant would generate skilled jobs and would make it possible for young people who study to stay in the area. Today, with no chance of finding a decent job, “they leave,” Kosaka said.

“The question of human resources is extremely important in Paraguay, and CAIASA made an intelligent decision to train local people, which is a slow process,” said Julio Fleck, head of production in CAIASA, who was in charge of selecting workers and technicians for training, to form a payroll of 200 people.

Workers from other fields, people from the world of business and trade, and some local mechanics and electricians were selected. “We sent them to Argentina for training,” said Fleck, who was involved in the construction of the complex since 2012.

“I come from a different school,” he told IPS, referring to his previous job in the Colonias Unidas Cooperative in southern Paraguay, which is dedicated to diversified agriculture and has a small factory that produces cooking oil from different raw materials.

In CAIASA, he said, he found the “focus” he was seeking, “the big industry where I can learn more in-depth know-how,” to reach maximum productivity. “The good thing in CAIASA is that it offers an opportunity for improvement in a modern, new industry with a high level of mechanisation. But it requires the setting of priorities among the many fronts that must be attended.”

A barge makes its way down the Paraguay river, one of South America’s most important rivers, past the town of Villeta, which has several public and private ports and an industrial park that has become the hub of agroindustry in Paraguay, focused on processing soy, of which this small country is one of the world’s leading exporters. Credit: Mario Osava/IPS

One priority was the fuel to fire the furnace. The fact that there is little demand in Paraguay for soybean husk pellets, a sub-product of soy, and that they are not export quality, helped lead to their choice as a fuel, since the idea was to avoid the use of fossil fuels.

But the excess ashes generated by the burning of the pellets hurt the productivity of the furnace, driving up maintenance costs. For this reason, wood chips continued to be used as well, a sustainable option, since the companies that provide them are certified as deforestation-free.

The challenge is how to boost the productivity of the furnace with these two raw materials, said Fleck, a 44-year-old chemical engineer who described himself as obsessed with competitiveness. Logistics, for example, affects Paraguayan soy and its by-products in terms of competition with neighbouring Argentina, which is closer to the markets abroad.

As Paraguay is surrounded by two giant soybean producers, Argentina and Brazil, the expansion of CAIASA depends on what those competitors do, he said.

The truckers, who make up the biggest group of workers among those linked to CAIASA, say the company brought them better pay in the past, but that this has changed since global soy prices plunged.

“I used to earn between eight and nine million guaranis (between 1,400 and 1600 dollars) a month; now I’m earning just 3,500 (615 dollars),” complained Mario Ortellano in the CAIASA parking lot, while waiting to unload the soybeans in his truck.

But the alternative for this 41-year-old who has driven a truck for 13 years is to return to his hometown of Villa Rica, 160 km from Asunción, and to a job as a machine and forklift operator, earning just the minimum wage, 315 dollars a month.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

Excerpt:

In Uruguay 22,414 people have been displaced by the floods that have affected the countries of the Mercosur trade bloc. Credit: Sistema Nacional de Emergencias (Sinae)

By Fabiana Frayssinet
BUENOS AIRES, Jan 4 2016 (IPS)

The flooding that has affected four South American countries has underscored the need for an integrated approach to addressing the causes and effects of climate change.

Above and beyond joint emergency response plans, global warming poses common problems like deforestation and the management of shared rivers.

Some 180,000 people have been evacuated since the worst flooding in years hit the region over the year-end holidays.

The floods caused when the Paraná, Paraguay and Uruguay rivers overflowed their banks did not respect the borders between the nations of the Mercosur (Southern Common Market) bloc, and have brought them together in a shared environmental catastrophe.

The same scenes of flooded streets, rescue teams and evacuation centres have filled the news from the provinces of northeast Argentina, cities in northern Uruguay and southern Brazil, and riverbank communities near the capital of Paraguay.“There is indifference towards environmental problems in the Mercosur. So much so that a Mercosur summit was held just recently, and this issue, which was a tragedy foretold, was not even addressed.” -- Enrique Viale

“It is difficult to avoid associating the severity of the floods with the modifications that have to do with climate change,” said Jorge Taiana, vice president of Parlasur, the parliamentary institution of the Mercosur bloc, which is made up of Argentina, Bolivia, Brazil, Paraguay, Uruguay and Venezuela.

“A serious joint response by the region is absolutely essential with respect to the two major strategies for confronting climate change, mitigation and adaptation to its effects,” Taiana, a lawmaker from Argentina’s “Front for Victory”, the left-leaning faction of the Justicialista (Peronist) Party, now in the opposition, told IPS.

“There is indifference towards environmental problems in the Mercosur,” Enrique Viale, president of the Argentine Association of Environmentalist Lawyers, told IPS. “So much so that a Mercosur summit was held just recently, and this issue, which was a tragedy foretold, was not even addressed.”

A number of experts have blamed the heavy rainfall on the El Niño-Southern Oscillation (ENSO), a cyclical climate phenomenon that affects weather patterns around the world.

The World Meteorological Organisation (WMO), a specialised United Nations agency, had forecast that its effects would be among the strongest seen since 1950.

On Dec. 24 the U.N. General Assembly urged member states to draw up national and regional strategies to address El Niño’s socioeconomic and environmental impacts, suggesting the implementation of early warning systems and the adoption of prevention, mitigation and damage control measures.

Viale, however, said: “The El Niño phenomenon was announced, but it isn’t the only cause.”

“The four countries (affected by the severe flooding) are the world’s biggest soy producers, along with the United States. It is not just by chance that the map of deforestation caused by soy production coincides with the map of the flooding,” he said.

The U.N. Food and Agriculture Organisation (FAO) reported that Brazil, Paraguay and Argentina were among the 10 countries with the highest levels of deforestation in the last 25 years. Between 1990 and 2015, Argentina lost more than 7.6 million hectares of forest.

In the Misionera or Paranaense jungle, also known as the Mata Atlantica, through which the Uruguay, Paraná and Iguazú rivers run, only seven percent of the original forest cover remains in Argentina, while this ecosystem in Paraguay and Brazil has been almost completely destroyed.

Greenpeace campaign coordinator in Argentina Hernán Giardini said in a statement that “Forests and jungles, besides concentrating considerable biodiversity, play a critical role in climate regulation, maintenance of water sources and flows and soil conservation.

“They are our natural sponge and protective umbrella. When we lose forests we become more vulnerable to heavy rains and run a serious risk of flooding,” the statement by the global environmental watchdog added.

Viale said: “This, added to direct seeding, the method used to plant transgenic soy, has turned the fields into veritable green deserts without any capacity for absorbing water.”

Soy production, which has boomed since 1990, is seen as essential to these South American economies, as soy is one of their chief export products.

As it expanded, soy also replaced other traditional crops, while pushing stockbreeding into marginal areas like jungles and forests.

Argentine environmentalist Jorge Daneri said “The expansion of the agricultural frontier, driven in particular by the expansion of genetically modified soy monoculture, the enormous deforestation of the Paranaense jungle, and the construction of dams on a giant scale by Brazil on the Paraná, Iguazú and Uruguay rivers – with many more under construction or planned – has greatly aggravated the environmental crisis throughout (South America’s) Southern Cone region.”

To address what he described as “regional ecocide,” Daneri, with the Argentine organisation “M´Biguá, Ciudadanía y Justicia Ambiental” (M´Biguá, Citizenship and Environmental Justice), called for the river basin committees of the Paraná, Uruguay and Paraguay rivers to work together.

“There isn’t a single river basin committee that includes the three Argentine provinces in question and the national state, and there is only CARU (the Uruguay River Administrative Commission), which includes Argentina and Uruguay, but not Brazil,” he said.

“This is a serious problem, because of the total lack of coordination,” he said. “We see the river basin committee as the main institution that should be focused on here. It has been clearly demonstrated that Mercosur has failed to play a serious role coordinating proactive, sustainable policies.”

Daneri stressed the urgent need for “a new environmental management and zoning system, and the reestablishment of biological corridors, as well as a system to recuperate riverbank areas through reforestation using native species of trees, and to restore native forests.”

He also proposed a reorganisation of zoning plans in every province, together with the national authorities, as well as environmental assessments of every river basin, at a regional level.

In the short term, Taiana suggested the Parlasur help coordinate contingency plans for those affected by the flooding, and in the longer term, he said local governments should study together construction projects and other initiatives financed by Mercosur.

He pointed out that the bloc has a Structural Convergence Fund to finance projects to improve infrastructure and boost the competitiveness and social development of the member countries.

“The most important aspect of these non-reimbursable funds that facilitate integration is that they acknowledge the asymmetries between member countries,” he said.

Taiana said the fund, of some 100 million dollars a year, could be invested in projects financed in border areas to mitigate or prevent flooding, like dikes or diversion channels.

“It seems to me that there are many common issues that are urgent, where the Mercosur as a whole still has a lot to do,” he said.

Daneri said “The projects needed are not cement works, they are not megadams or megadikes. It’s not about channelising rivers. Only making efforts during an emergency, or for emergencies, is a mistake.”

“Part of meeting this challenge is working towards a transition to leave the current oversimplified model of monoculture behind and moving in the direction of agroecology. The causes need to be addressed,” he added.

“The causes lie in a productive model that does not depend on nature’s cycles but on the cycles of the market, which is devastating for ecosystems,” he said.

A traffic jam in Jaciara, Brazil, caused by repairs to the BR-364 road. Credit: Mario Osava/IPS

By Diana Cariboni
MONTEVIDEO, Oct 2 2014 (IPS)

“We could be the last Latin American and Caribbean generation living together with hunger.”

The assertion, made by Raúl Benítez, a regional officer for the Food and Agriculture Organisation of the United Nations (FAO), shows one side of the coin: only 4.6 percent of the region’s population is undernourished, according to the latest figures.

By 2030, however, most of the countries in the region will face a serious risk situation due to climate change.

With almost 600 million inhabitants, Latin America and the Caribbean has a third of the world’s fresh water and more than a quarter of its medium to high potential farmland, points out a book published this year by the Inter-American Development Bank in partnership with Global Harvest Initiative, a private-sector think-tank.

It is the largest net food-exporting region, while it uses just a fraction of its agricultural potential for both consuming and exporting.

But almost a quarter of the region’s rural people still live on less than two dollars a day, and the region is prone to disasters (earthquakes, hurricanes, floods and droughts), some of them exacerbated by climate change.

Global warming poses serious challenges to the international community’s goal of eradicating poverty and hunger. Changes in rainfall patterns, soils and temperatures are already stressing agricultural systems.

Currently, more than 800 million people worldwide are at risk of hunger. Through its devastating impact on crops and livelihoods, climate change is predicted to increase that number by as much as 20 percent by 2050, according to a recent United Nations report.

Changes in temperature and rainfall patterns could lead to food price rises of between three percent and 84 percent by 2050, thereby feeding a vicious cycle of poverty and inequality.

Oxfam reports that in the more extreme scenarios, heat and water stress could reduce crop yields by 25 percent between 2030 and 2049.

Climate change is likely to impact mostly small and family farmers, who produce more than half the food in the region and have inadequate resources with which to deal with unpredictable weather.

Despite this looming threat, strategies for sustainability are far from clear. Regional drivers of growth are export-oriented commodities, and while some sectors have advanced in added value, technology and innovation, natural resources exploitation is still the key of the whole regional boom.

By 2011, raw materials and commodities accounted for 60 percent of regional exports, compared to 40 percent in 2000. At the same time, this growth of commodities exports led to a replacement of domestic manufactures by imported goods, affecting manufacturing industries in the region.

In rural areas, conflicting models of small farming and extensive monocultures based on genetically modified seeds compete for the land in a David versus Goliath fight.

In Paraguay, the fourth largest exporter of soybeans in the world, 1.6 percent of owners hold 80 percent of the agricultural land. In Guatemala, eight percent of producers own 82 percent of farmlands, while 80 percent of productive land in Colombia is in the hands of 14 percent of landowners, according to Oxfam.

Agriculture and related deforestation are major sources of greenhouse gasses (GHG) in Latin America, though other sources are growing rapidly. Brazil, for example, is joining the club of big polluters, with the burning of fossil fuels accounting for the majority of its GHG emissions in the last five years.

As the extractive industries grow, they demand more highways, railroads and ports, putting pressure on governments to avoid the so-called logistics blackout.

Energy demand is increasing too, not only from industries, but also from millions of people lifted out of poverty, and thus with larger consumption needs. The region’s energy demand for the period 2010-2017 increases at an annual rate of five percent.

The region is poised to cross a new fossil fuel frontier, when Argentina, Brazil and Mexico overcome their own political, financial and technical challenges to exploit substantial reserves of unconventional hydrocarbons, like the Argentinian Vaca Muerta geological formation or the pre-salt layer located in the Brazilian continental shelf.

It is difficult to argue that a region so rich in natural resources has no right to thrive on the demand and supply of commodities, particularly when the resulting fiscal revenues have allowed impoverished countries like Bolivia to drastically reduce extreme poverty numbers (from 38 percent in 2005 to 20 percent in 2013).

However, experts warn this path is unsustainable and climate change impacts, felt across the region, can undermine any social gain.

In Guatemala, the worst drought in 40 years is putting 1.2 million people at risk of suffering hunger in the next months. Those who suffer the worst impacts of unsustainable development models will ironically be those who contribute the least to global warming.

A recent U.N. document summarising actions for the follow-up to the programme of action adopted at the 1994 International Conference on Population and Development (ICPD) found that only about a “third of the world’s population could be considered as having consumption profiles that contribute to emissions.”

Fewer than one billion of them have a significant impact, while “a smaller minority is responsible for an overwhelming share of the damage,” the report added.

Still, it will be the poorest people who will bear the brunt, and Latin America, dubbed ‘the next global breadbasket’, is in desperate need of strong local and global action towards the goal of achieving sustainable development in the next decade.

Edited by Kanya D’Almeida

Canada has been leading the world in forest loss since 2000, accounting for 21 percent of global forest loss. Credit: Crustmania/ CC by 2.0

By Stephen Leahy
UXBRIDGE, Canada, Sep 5 2014 (IPS)

The world’s last remaining forest wilderness is rapidly being lost – and much of this is taking place in Canada, not in Brazil or Indonesia where deforestation has so far made the headlines.

A new satellite study reveals that since 2000 more than 104 million hectares of forests – an area three times the size of Germany – have been destroyed or degraded.Since 2000 more than 104 million hectares of forests – an area three times the size of Germany – have been destroyed or degraded

“Every four seconds, an area of the size of a football (soccer) field is lost,” said Christoph Thies of Greenpeace International.

The extent of this forest loss, which is clearly visible in satellite images taken in 2000 and 2013, is “absolutely appalling” and has a global impact, Thies told IPS, because forests play a crucial in regulating the climate.

The current level of deforestation is putting more CO₂ into the atmosphere than all the world’s cars, trucks, ships and planes together, he said, adding that “governments must take urgent action” to protect intact forests by creating more protected areas, strengthening the rights of forest communities and other measures, including convincing lumber, furniture manufacturers and others to refuse to use products from virgin forests.

Greenpeace is one of several partners in the Intact Forest Landscapes initiative, along with the University of Maryland, World Resources Institute and WWF-Russia among others, that uses satellite imagery technology to determine the location and extent of the world’s last large undisturbed forests.

The new study found that half of forest loss from deforestation and degradation occurred in just three countries: Canada, Russia and Brazil. These countries are also home to about 65 percent of world’s remaining forest wilderness.

However, despite all the media attention on deforestation in the Amazon forest and the forests of Indonesia, it is Canada that has been leading the world in forest loss since 2000, accounting for 21 percent of global forest loss. By contrast, the much-better known deforestation in Indonesia has accounted for only four percent.

Brazil’s Amazon forest – 2000. Credit: Courtesy of Global Forest Watch

Brazil’s Amazon forest – 2013. Credit: Courtesy of Global Forest Watch

Massive increases in oil sands and shale gas developments, as well as logging and road building, are the major cause of Canada’s forest loss, said Peter Lee of Global Forest Watch Canada, an independent Canadian NGO.

A big increase in forest fires is another cause of forest loss. Climate change has rapidly warmed northern Canada, drying out the boreal forests and bogs and making them more vulnerable to fires.

In Canada’s northern Alberta’s oil sands region, more than 12.5 million hectares of forest have been crisscrossed by roads, pipelines, power transmission lines and other infrastructure, Lee told IPS.

Canada’s oil sands and shale gas developments are expected to double and possibly triple in the next decade and “there’s little interest at the federal or provincial political level in conserving intact forest landscapes,” Lee added.

The world’s last remaining large undisturbed forests are where most of the planet’s remaining wild animals, birds, plants and other species live, Nigel Sizer, Global Director of the Forest Programme at the World Resources Institute, told a press conference.

Animals like Siberian tigers, orangutans and woodland caribou require large areas of forest wilderness, Sizer noted, and “losing these top species leads to a decline of entire forest ecosystems in subtle ways that are hard to measure.”

While forests can re-grow, this takes many decades, and in northern forests more than 100 years. However, if species go extinct or there are too few individuals left, it will take longer for a full forest ecosystem to recover – if ever.

Trees, plants and all the creatures that make up a healthy forest ecosystem provide humanity with a range of vital services including storing and cleaning water, cleaning air, soaking up CO₂ and producing oxygen, as well as being sources of food and wood. These ‘free’ services are often irreplaceable and generally worth far more than the value of lumber or when converted to cattle pasture, said Sizer.

In just 13 years, South America’s Paraguay converted an incredible 78 percent of its remaining forest wilderness mainly into large-scale soybean farms and rough pasture, the study found. Satellite images and maps on the new Global Forest Watch website offer see-it-with-your-own eyes images of Paraguay’s forests vanishing over time.

The images and data collected for the study are accessible via various tools on the website. They reveal that 25 percent of Europe’s largest remaining forest, located 900 km north of Moscow, has been chopped down to feed industrial logging operations. In the Congo, home of the world’s second largest tropical forest, 17 percent has been lost to logging, mining and road building. The Global Forest Watch website also shows details of huge areas of Congo forest licensed for future logging.

Deforestation starts with road building, often linked to logging and extractive industries, said Thies. In some countries, like Brazil and Paraguay, the prime reason is conversion to large-scale agriculture, usually for crops that will be exported.

The new data could help companies with sustainability commitments in determining which areas to avoid when sourcing commodities like timber, palm oil, beef and soy. Market-led efforts need to gain further support given the lax governance and enforcement in many of these forest regions, Thies said.

He called on the Forest Stewardship Council (FSC) – a voluntary certification programme that sets standards for forest management – to “also play a stronger role” and to improve those standards in order to better protect wilderness forests.

Without urgent action to curb deforestation, it is doubtful that any large-scale wild forest will remain by the end of this century, concluded Sizer.

(Edited by Phil Harris)

The indigenous hip hop group Bro MC'S from Brazil, during the Todos por Sawhoyamaxa intercultural festival in the Paraguayan capital in December. Credit: Natalia Ruiz Díaz/IPS

By Natalia Ruiz Diaz
ASUNCIÓN, Jan 7 2014 (IPS)

The Sawhoyamaxa indigenous community in Paraguay have spent over 20 years fighting to get back their land, which they were pushed off by cattle ranchers.

They started the new year by collecting signatures to press Congress to pass a bill that would expropriate their ancestral territory from ranchers, in order for the state to comply with a 2006 ruling by the Inter-American Court of Justice ordering the restitution of their land.

“More than 20 years after being expelled from our ancestral land and living [in camps] along the side of the road, watching the cows occupy the place where we used to live, we decided to return because that land is ours,” the Sawhoyamaxa said in a message accompanying the petition drive.

“Che rohenói, eju orendive, aldeia unida, mostra a cara” (I am calling you, come with us, the people united, show your face) thousands of people sang at the “Todos con (everyone with the) Sawhoyamaxa” intercultural festival in Asunción in mid-December.

The event launched the start of their new crusade demanding enforcement of the Inter-American Court sentence, which ruled that they be given back their territory and that they be provided with basic services, such as medical care and clean water.

The “Che rehenói” chorus was heard over and over again in a mix of Guaraní (one of Paraguay’s two official languages, along with Spanish) and Portuguese, sung by the hip hop ban Brô MC’S, whose members belong to the Jaguapirú Bororó indigenous community from Brazil.

The goal set by the Sawhoyamaxa leaders is to gather 20,000 signatures, to pressure Congress to approve the expropriation of the land.

The epicentre of the community’s two-decade struggle is the Santa Elisa settlement, where the largest group of families are camped out along the side of the road 370 km north of Asunción en Paraguay’s semiarid Chaco region.

They are living “in extreme poverty, without any type of services, and waiting for the competent bodies to decide on the land claim they filed,” according to the 2006 Court ruling.

The Sawhoyamaxa form part of the Enxet linguistic family. There are 19 indigenous groups belonging to five language families in Paraguay, spread out in 762 communities mainly in the east of the country and the Chaco region, a vast dry forest area.

According to the 2012 census, 116,000 of Paraguay’s 6.7 million people – or 1.7 percent of the population – are indigenous, with over half of that group belonging to the Guaraní people. However, the overwhelming majority of the population is “mestizo” – people of mixed European (principally Spanish) and native (mainly Guaraní) descent.

The Sawhoyamaxa, who had no title deeds to the land where they had always lived, were displaced from their land, which was taken over by large cattle ranchers.

“They don’t want us to progress in our way of life,” the leader of the community, Carlos Cantero, told IPS. “We want the land to dedicate ourselves to our ancestral activities, like hunting and gathering in the forest.”

He was referring to the powerful cattle industry, which has successfully lobbied to block implementation of the 2006 binding sentence handed down by the Inter-American Court, an autonomous Organisation of American States (OAS) body.

Cantero said it was important for the situation to be resolved immediately because “there is still a little forest left on our land, some swamps and streams; but if the state does not take a stance on this soon, those reserves are going to disappear.”

Cattle ranchers have steadily advanced on Paraguay’s Chaco region, where in November 549 hectares a day were deforested, according to the local environmental organisation Guyra Paraguay.

The Chaco scrub forest and savannah grassland, which covers 60 percent of Paraguay but accounts for just eight percent of the population, makes for good cattle pasture.

Since the 19th century, the worst dispossession of indigenous people of their lands in this landlocked South American country occurred in the Chaco, especially after the 1932-1935 Chaco War with Bolivia, when the government sold off huge tracts of public land to private owners.

Today, less than three percent of the population owns 85 percent of Paraguay’s arable land, making this the Latin American country with the greatest concentration of land ownership.

The Sawhoyamaxa community is fighting for 14,404 hectares of land.

In a largely symbolic move, when the final deadline set by the Inter-American Court expired in March, the native community began to “recover” their land, setting up small camps on the property to which they are waiting to be awarded a collective title.

Their fight for the return of their ancestral lands dates back to the early 1990s. After exhausting all legal recourse available in Paraguay, they took the case to the Inter-American Human Rights Commission in 2001, which referred it to the Court.

The Sawhoyamaxa case is one of three in which the Inter-American Court has handed down rulings against the Paraguayan state in defence of the country’s native people. None of the resolutions has been fully complied with.

After the 2006 sentence, the government attempted to acquire the land in question in order to live up to the resolution and return the property to the native community. But it failed, due to the refusal by the rancher who holds title to the property, Heribert Roedel, whose 60,000-hectare estate includes the land claimed by the Sawhoyamaxa.

“The other route for expropriation is through the legislature, for which a bill was introduced, currently being studied in the Senate,” said Oscar Ayala, a lawyer with Tierraviva, which supports indigenous communities in Paraguay.

This local non-governmental organisation and Amnesty International Paraguay are the main civil society supporters of the cause of the Sawhoyamaxa.

The bill Congress is debating was presented by the government in August for the expropriation of the land, in order to fulfil the Inter-American Court order.

According to Ayala, there is a more positive environment than in the past. “The impression we have is that there is greater openness” for an eventual solution and for justice to be done in the case, he said.

On Dec. 18, the Senate commission for audit and oversight of state finances pronounced itself in favour of expropriation of the land.

“This first favourable ruling is a good indicator; these questions are always complex because caught up in the middle is that deeply rooted economistic view of land, but in this case those issues are no longer in debate,” Ayala said.

The bill will now go to the agrarian reform and finance commissions and then on to the Senate floor, before being sent to the lower house.

Some 120 families – around 600 people, half of them children and adolescents – are living in the Santa Elisa settlement.

The Court also ordered the state to provide food and healthcare assistance to the community. But while the situation in this respect has improved in the new settlements, much more needs to be done.

“We have a health promoter but no health post,” Cantero said. “The worst affected are the children, who are suffering from dehydration because of the bad quality of the water.”

The settlements receive clean water every month, but it is not enough, and they depend on rainwater, which is scarce in the semiarid Chaco.

To find a solution, Sawhoyamaxa men and women have been knocking on doors everywhere, showing people papers that describe the history of their community, their struggle, and the Court ruling, in search of support.

“We won’t stop until we are living on our land; our very survival depends on that,” Cantero said.

The “toilet paper roll” protest in the Plaza de Armas, which kicked off Paraguay’s “indignados” movement. Credit: Natalia Ruíz Díaz/IPS

By Natalia Ruiz Diaz
ASUNCION, Nov 29 2013 (IPS)

A few hours before a human chain was to surround the Paraguayan Congress on Thursday, Senator Víctor Bogado, accused of fraud and misuse of public funds, was stripped of his parliamentary immunity from prosecution.

On Nov. 15, an earlier vote in which 23 of the 45 members of the Senate voted for the ruling Colorado Party lawmaker to keep his immunity triggered the first social media-organised protest against corruption, which ultimately ended up forcing Congress to hold a second vote and reverse the decision.

Under pouring rain, dozens of protesters gathered in front of Congress in the Plaza de Armas Thursday evening to celebrate the first victory of the demonstrations, instead of forming a human chain in protest.

And while the number of demonstrators was smaller than in the previous protests in the plaza because of the torrential rains, the police presence was heavy, with hundreds of officers and anti-riot water cannons. At times there were more police than demonstrators in the downpour.

Natalia Paola Rodríguez, a 35-year-old lawyer and university professor, arrived late “because the torrent almost swept my car away.” But she told IPS she needed to be there “to share the excitement; what we did is really important” for this country of 6.6 million people – the second-poorest country in South America after Bolivia, and one of the most unequal.

Hugo Galeano, a 23-year-old student, also defied the weather, “because the celebration had to be here.”

“Public pressure twisted the arm of one of the branches of government,” a euphoric Galeano told IPS. “This isn’t over, this will become an ongoing thing,” he added, before walking off, chanting along with the rest of the protesters.

Topo Topone R. is the alias used on the social networks by lawyer Alejandro Recalde, one of the people behind Paraguay’s protest movement, which has labelled itself #15Npy, along the lines of Spain’s 15 May (15M) movement of “indignados” or angry protesters.

The movement debuted in the Nov. 15 demonstration in the Plaza de Armas, when hundreds of protesters lobbed toilet paper rolls at the legislature, to “clean up” Congress. The protest, which got heavy media coverage, was followed by others.

Topo, 40, explained to IPS that the aim of the movement is to become a kind of citizen oversight mechanism to keep an eye on the authorities, through constant demonstrations and public participation.

“We will be wherever citizens feel alone because there is no organisation or political party fighting for their demands, until the corrupt political class, which uses the people instead of serving them, is eliminated,” he said.

A taxi driver who did not want to give his name told IPS that “we got tired of the abuses,” before pointing out that “my colleagues contributed a lot to this triumph.” Taxi drivers were the first to refuse to provide service to the 23 senators who defended Bogado in the first vote in Congress. The boycott was then joined by restaurants and other businesses in Asunción.

#15Npy is a movement organised over the social networking sites like Facebook and Twitter, as well as political blogs, one of them created by Topo himself shortly after left-wing president Fernando Lugo was removed from office in June 2012 through a controversial impeachment trial.

José Carlos Rodríguez, a sociologist and political analyst, said the term “popular uprising” was not fitting in this case.

“Paraguay’s ‘indignados’ are an expression of a new middle class, which has moral grievances. They are different from the movements that have emerged in the Arab countries and in Brazil. In the Arab countries, the focus was the dictatorships, and in Brazil the protesters were demanding rights,” he told IPS.

But like the waves of demonstrations in North Africa, Spain or Brazil, the movement in Paraguay has been organised through the social media.

A precedent for #15Npy was the “after office revolucionario” (after-office revolutionary) protests held during the Lugo administration (2008-2012) to back the president’s veto of a scandalous increase in the electoral court’s budget, which had been approved by Congress, dominated by the right-wing Colorado Party and other opposition forces.

Public pressure forced the legislature to backtrack at that time too, and it cancelled the budget hike. That led to the emergence of the new contemptuous slang terms “senarratas” and “dipuchorros”, which mix up the terms “senator”, “deputy”, “rat” and “thief”.

Rodríguez believes the protests will continue. “The people are going to go for more,” he said, adding that the Bogado case is only the tip of an iceberg of impunity enjoyed by the political leadership, which Paraguayans are fed up with.

Politics in Paraguay has historically been infamous for the high levels of corruption, impunity, nepotism and perks. And in the eyes of the citizens, Congress is the biggest culprit.

A broad range of people are participating in #15Npy – from office workers and students to artists, civil servants, taxi drivers, shopkeepers and ordinary people.

Some come from a background of activism in trade unions, social organisations or even political parties. But the great majority form part of the anonymous public, which up to now had been more resigned than participative in the face of realities such as living in one of the most unequal and corrupt countries in South America.

There are no leaders in the movement, only people who serve as reference points in different groups that communicate through Facebook and Twitter. On the networks they have already made it clear that Bogado’s loss of immunity will not bring the protests to a halt.

The next one will be a mid-December march on the courthouse, the seat of justice, “one of the branches of the state where corruption flourishes, and which provides citizens with anything but justice,” Topo said.

Both he and the demonstrators in the plaza stressed that President Horacio Cartes, a business tycoon in office since August, “should also take note” of the protests.

“Either he stops the repression of campesinos [small farmers] and only thinking about privatising and addresses the people’s demands, or we will go after him,” the taxi driver said.

“We are going to work at the grassroots level and go after the three branches of government; our agenda isn’t marked by anyone,” said Professor Rodríguez, who is very active in #15Npy.

Rodríguez the political scientist said these movements “produce a change in consciousness, but they do not directly bring about transformations.” In the case of Paraguay, the analyst said the support that the demonstrations received from the press and sectors of the business community played a key role.

In the Plaza de Armas Thursday evening, the protesters called for the resignation of the 23 senators who defended Bogado. The political scientist said “demands are always maximalist, you have to call for things even if you won’t get them, but basically the big victory is that Congress has changed, and it’s not going to be the same from here on out.”

July will mark the start of a new era for the Common Southern Market (Mercosur), when it will expand to five full members, if the South American bloc manages to overcome the commotion caused by the admission of Venezuela and the suspension of Paraguay.

But Mercosur’s underlying problems will continue to block progress towards integration, experts warn.

There is a “legal vacuum” surrounding Paraguay’s eventual return as a full member of Mercosur – South America’s largest trade bloc – said Tullo Vigévani, a São Paulo State University (UNESP) professor of political science specialising in international relations.

Venezuela’s admission as a fifth full member was approved at the Jun. 29, 2012 summit, when Argentina, Brazil and Uruguay took advantage of the absence of Paraguay, which was suspended at the same meeting because of the Paraguayan legislature’s ouster of then President Fernando Lugo earlier in June.

Lugo was impeached in what was considered a “summary trial” that violated the bloc’s democracy clause.

The Paraguayan Senate, which was blocking Venezuela’s inclusion by refusing to ratify the admission agreement signed in 2006, finally voted against it in August in a vote that was more symbolic than effective.

But a political agreement will likely be reached to sort out the institutional mess after Paraguayan President-elect Horacio Cartes takes office in August, since the bloc’s powerhouses, Argentina and Brazil, will exert strong pressure on Paraguay due to economic interests, Vigévani told IPS.

The new government, which represents the return to power of the rightwing Colorado Party that ruled Paraguay from 1947 to 2008, is expected to get Congress to ratify Venezuela’s admission.

However, Venezuela adds a new element of uncertainty in the bloc because of the opposition’s challenge to President Nicolás Maduro’s Apr. 14 victory, in the wake of Hugo Chávez’s death from cancer on Mar. 5.

But the challenges faced by Mercosur are mainly due to the “conflict-ridden relations” between Argentina and Brazil, which are both experiencing processes of deindustrialisation, according to Vigévani.

Argentina lost a large part of its industries in a lengthy process that began in the 1970s, he pointed out. Privatisation and trade liberalisation policies adopted in different periods, such as the 1976-1983 dictatorship or the administration of Carlos Menem
(1989-1999), led the country to disaster.

The problem is that Argentina is now trying to carry out “old-fashioned reindustrialisation,” protecting non-competitive sectors without the technological innovations that could help create a sustainable future for the country, although the pressure to generate jobs is understandable, Vigévani said.

Disputes between Argentina and Brazil have occurred constantly since Mercosur was created in 1991, such as in the case of attempts to achieve ambitious goals like macroeconomic harmonisation, complementary supply chains, free circulation of goods and services, and a common currency, which have proved elusive.

Trade between South America’s two giants grew 13-fold since the Asunción Treaty, which founded Mercosur, was signed. But it appears to have reached a limit in 2011, when Brazil exported 22.7 billion dollars worth of goods to Argentina and imported 16.9 billion, according to official figures from Brazil.

The imbalance in Argentina’s favour began in 2004. And last year, Brazil’s sales fell 20.75 percent, while Argentina’s only slipped 2.73 percent.

Bilateral relations have also suffered because large Brazilian investors have pulled out of Argentina.

Brazil’s state oil company Petrobras is selling its assets in Argentina, where it had a string of service stations, while Brazilian mining giant Vale, privatised in 1997, suspended a potassium mining project in Rio Colorado, drawing an angry reaction from Buenos Aires.

But Brazil is also caught up in its own process of deindustrialisation, although less dramatic and more recent than the one Argentina experienced in the past.

For that reason, it is trying to defend some industries with measures such as tariff hikes, minimum national content rules for government purchases, tax cuts, and reductions in energy prices, in order to sustain the near full-employment achieved thanks to the fast expansion of the services, agriculture and construction industries.

The industries that the Brazilian government is trying to shore up are, however, “backwards,” such as the metallurgical industry, while sectors with greater technological innovation, like electronics and chemistry, are not as strong, said Julio de Almeida, an economist with the Institute for Studies on Industrial Development (IEDI).

With China’s boom in the world economy, industrial output has shrunk as a proportion of Brazil’s GDP and exports.

In fact, this problem is faced by Mercosur as a whole, which has increasingly become an exporter of primary products and an importer of manufactured goods.

The challenge faced by the entire bloc is to develop “policies that strengthen members’ processes of innovation and training, to boost competitiveness in production that incorporates new technologies,” said Vigévani.

This view is more and more widely expressed by analysts. But no viable short-term solutions are in sight.

Venezuela’s incorporation as a full member of Mercosur doesn’t improve the outlook in this sense. With its growing trade imbalance and heavy dependence on oil exports and on imports for just about all other products, Venezuela is already a major importer of food and manufactured goods from Argentina and Brazil.

For example, Brazil exported 5.06 billion dollars worth of goods to Venezuela last year and only imported 997 million dollars, according to statistics from Brazil.

Brazil’s investment in Venezuela is also sliding, with several companies pulling out of the country.

Brazilian companies have only made four investments in that country in the last five years, compared to 20 in Colombia, 19 in Chile and eight in Peru, according to the Centre for Integration and Development Studies (CINDES) in Rio de Janeiro

The economic slowdown forecast for Venezuela – from last year’s 5.6 percent to 2.5 percent this year, according to the United Nations report World Economic Situation and Prospects 2013 – and a 20 percent inflation rate exacerbate the uncertainty of what Venezuela’s admission will mean for the bloc.

Nor does the negotiation of a trade agreement with the European Union, which is back on the table, promise many benefits, because it is basically a question of opening up that market to Mercosur’s farm products, as a counterpart to increased access by European industrial goods and services to South America’s two largest economies, which would merely aggravate the bloc’s problems.

In addition, the severe economic crisis facing the EU further limits the ambitions of the trade talks between the two blocs.

The leaders of South America’s Mercosur trade bloc decided to set up a committee to facilitate the incorporation of new members, adopt a mechanism to defend democracy in case of a coup, and ban vessels from the Malvinas/Falkland Islands from docking in member countries’ ports.

Mercosur leaders express solidarity with Argentina's historic claim to the Malvinas/Falkland Islands. Credit: Office of the Uruguayan president

At Tuesday’s summit, the presidents of Argentina, Brazil, Paraguay and Uruguay also signed a free trade agreement with Palestine, seen as mainly symbolic, and expanded the list of products from outside the bloc that will pay import tariffs.

In their speeches, the Mercosur (Southern Common Market) leaders acknowledged the contradictions and hurdles faced by the region’s largest trade bloc, while stressing the need to continue to forge ahead with the process of integration.

At the bloc’s headquarters in Montevideo, host President José Mujica met Cristina Fernández of Argentina, Dilma Rousseff of Brazil and Fernando Lugo of Paraguay, as well as Hugo Chávez of Venezuela and Rafael Correa of Ecuador, whose countries are in the process of joining as full members.

“Our path is full of contradictions and difficulties,” Mujica said. “Woe to us if the contradictions disillusion us and we abandon this project. We would soon become a leaf in the wind, in this world of colossal forces.”

The Uruguayan president emphasised that the bloc represents not only economic, but political, integration. “Without politics, there will be no Mercosur in the long run, and there will be no convergence, because this is not only an economic equation.

“Alas for us if we fail to understand that the underlying issue is a question of power, and that this question makes it necessary to move towards convergence,” he said.

Mujica also confirmed the creation of a high-level committee to analyse the admission of Venezuela and Ecuador as full members.

Venezuela, whose admission process began in 2006, is only awaiting approval by the Paraguayan Congress, where legislators opposed to the left-leaning Lugo hold a majority. For its part, Ecuador formally requested full membership on Tuesday.

Chávez said the incorporation of his country as a fifth full member has been blocked “by just five lawmakers” in Paraguay.

“These people who have been opposing (Venezuela’s admission) for five years, I don’t know if they are aware of the harm they are causing, not to Venezuela, but to everyone, to the Paraguayan people themselves,” he said. “There are only five people who don’t want it. I think that behind them there must be a very powerful hand, moving who knows what mechanisms of pressure,” he maintained.

Chávez underlined that Venezuela’s incorporation would mean “opening Mercosur to the Pacific.

“We are members of OPEC (Organisation of Petroleum Exporting Companies), we have gas and energy reserves, we have things to contribute,” he added. “We have to expedite this, spurred on by the global crisis that is threatening us.”

Lugo also referred to the case of Venezuela and the resistance put up by a handful of legislators in his country.

“This government of Paraguay is respectful of its institutions, but it is making an effort to strengthen integration. The incorporation of Ecuador and Venezuela would work in favour of our bloc,” he said.

Rousseff, meanwhile, highlighted the agreement reached at the summit “to expand the list of products included in the common foreign tariff” applied to imports from outside Mercosur, and to adopt various mechanisms to foment intra-bloc trade.

Correa, for his part, stressed the signing of the “Montevideo Protocol”, a mechanism providing for a mutual response in defence of democratic institutions in case of a coup d’etat in any of the member countries.

The summit agenda, which was to include public ceremonies, such as the signing of the agreement with Palestine – signed in private in the end – was interrupted by the tragic news of the death of Argentina’s deputy trade secretary, 33-year-old Iván Heyn. The newly appointed official was found hanged in his room in the Montevideo hotel where most of the Argentine delegation was staying. The police said his death appeared to be a suicide, but that the investigation continued.

When Fernández was notified, she was so upset that her private doctor was called to attend to her.

Malvinas/Falklands

The summit also approved a resolution to close the bloc’s ports to vessels flying the Falkland Islands flag. The islands, known as the Malvinas in Argentina, have been held by Britain since the 1830s, and were the subject of a brief war between the two countries in 1982, when Argentina sought to assert its sovereignty over them.

In a column posted on the Uruguayan president’s web site Tuesday, Mujica explained his decision to ban the boats from docking in Uruguay, arguing that his country’s foreign policy has always been based on national interests, but also on the principle of solidarity with the region.

Mujica said solidarity with Buenos Aires also benefited Montevideo. “Uruguay’s political history shows that every time relations with Argentina have soured, the economy and labour have been enormously impaired,” he wrote.

Fernández expressed her appreciation for the member countries’ decision to block boats from the Malvinas.

The Malvinas “are not just an Argentine cause, but a global cause, because (the British) are taking oil and fishing resources, and when they need more resources, whoever is the strongest will go to find them whenever and however,” she said, as Rousseff nodded.

“When they sign something involving the Malvinas, they are doing so as if the Malvinas belonged to them. There are many countries here with great natural wealth, and this wealth must be defended. Let’s be smart enough to understand that, by taking care of each other, we are taking care of ourselves,” she added.

At the end of the summit, Mujica handed over the rotating six-month presidency of the bloc to Fernández.