Economics - International - Panafrica - Trade
Africa and South America: A new world order confirmed
Several African leaders were on the Island of Margarita in northern Venezuela over the weekend for the second Africa-South America summit. Among them: Muammar Gaddafi (Libya), Jacob Zuma (South Africa) Robert Mugabe (Zimbabwe), Abdelaziz Bouteflika (Algeria). The most influential presidents of the continent, according to the Ministry of Communication and Information of Venezuela, met to find a "strategic link" between the two regions as well as solutions to the energy crisis, food security and the financial crisis. "Only united will we be free," announced Hugo Chavez as he opened the summit. Among his proposals was the enhancement of economic coordination between the Union of South American nations and African states, which according to Brazilian leader, Lula de Silva has reaped enormous benefits. The cooperation is expected to boost the economies of the two continents.

"We agree that this summit should not be just another summit. This will be a successful summit, not just speeches and a final declaration that goes unnoticed. We are working to integrate South America and Africa,” Venezuelan president Hugo Chavez said early September, during a visit to Tripoli. This statement speaks volumes about the consideration the leader has given to South-South relations.

At the summit, the leaders agreed to launch a new development bank for South America, the Banco del Sur, with an initial start up investment of $20bn. Jean-Jacques Seymour, journalist and writer, elaborating on the reasons for the summit indicated that the creation of a bank for Latin America and Africa will be "an alternative to the International Monetary Fund and World Bank for Southern countries,” while the implementation of a common currency to replace the FCFA will represent a “win-win” commercial exchange. A change in financial and commercial structures is necessary if this partnership has to work. "All the energy infrastructure, both in South America and in Africa, was designed and developed to meet the energy requirements of the industrial powers that our countries were satellites of," said Venezuelan minister of energy and petroleum, Rafael Ramirez.

Africa, the Caribbean and Latin America, "a coloured essence"

The matter of interest for the Venezuelan president is the creation of a cooperation concept in line with a similar one initiated with the Caribbean in April 2005 by the Bolivarian Association for the Americas (ALBA). This social, economic and political organisation was created by virtue of the initiative of Havana and Caracas to promote cooperation between the two socialist countries. For Hugo Chavez, the African continent, the Caribbean and Latin America represent "a coloured essence”. "We have more to do along with our sister continent, Mother Africa, after having set our eyes on the Western capitalist world. Caracas has to become a bridge to all kinds of cultural Economic cooperation between Africa and Latin America," he said during a tribute to the Late Burkinabe president, Thomas Sankara ahead of the South-South summit themed "Closing the gap, opening up opportunities".

It is in this light that Hugo Chavez has since 2005 multiplied deals with Africa. For example, Venezuela is cooperating with Mali in various sectors: telecommunications, agriculture, mining, health and education. Latin American countries are counting on their oil resources to encourage African states to move closer to ALBA. Venezuela is among the countries with the largest hydrocarbon reserves and already supplies crude at preferential rates to 17 countries in Central America and the Caribbean since 2005. This is viewed as major asset for highly dependent countries.

Hugo Chavez has moved to adopt a partnership strategy in relation to African countries with oil resources. During his African tour in September, the Venezuelan leader met with his Algerian counterpart Abdelaziz Bouteflika and proposed a partnership between Venezuelan companies and the Algerian oil company, Sonatrach, to outdo the U.S., which, according to Hugo Chavez, "is plundering Africa’s wealth." "The 21st century will not be a bipolar world, it will not be unipolar. It will be multipolar. Africa will be an important geographic, economic and social pole. And South America will be too." Hugo chavez said Saturday in his opening address at the two day summit. "This is the beginning of the salvation of our people," he continued. The Venezuelan leader has promised his country’s support towards the construction of an oil refinery in Mauritania to process about 40,000 barrels of oil per day which could help supply fuel to Gambia, Mali and Niger.

This anti-imperialist approach aims at "a Southern integration to free itself from the trusteeship of wealthy countries," said Francois Polet, a researcher at the Tricontinental Center (CETRI). The ideology was borrowed from the “Liberator” Simon Bolivar who wanted to liberate oppressed peoples from the grips of dominant powers. According to Muammar Gaddafi, current president of the African Union, "The world isn’t the five countries on the UN Security Council (…) The world’s powers want to continue to hold on to their power. When they had the chance to help us, they treated us like animals, destroyed our land. Now we have to fight to build our own power."

Brazil, Venezuela and Africa

But this anti-American stands has so far not succeeded in dethroning Brazil as Africa’s preferred trade partner. "Since coming to power in 2003, Brazilian President Lula da Silva has made the African continent, especially South Africa, one of his economic priorities. Besides, he has created an India-Brazil-South Africa alliance (IBSA) to change geography, loosen unequal ties with the Triad (North America, Western Europe and Asia Pacific) and establish balanced partnerships" says Jean-Jacques Kourliandsky, a researcher at the Institute of International and Strategic Relations (IRIS). One of IBSA’s aims in Africa is to promote the production of biofuels, such as ethanol, a renewable energy produced from sugar cane, produced in large quantities in Brazil and India, to create jobs.

And Africa is benefiting from these partnerships. "Coveted by Brazil, Venezuela, China, the United States and Europe, the African continent has a lot to gain from the competition. It has at its disposal a range of rich countries," analyses François Polet. "Southern countries have a competitive advantage over the North. First, because they pose fewer conditions (human rights for example) during trade agreements than the United States and Europe, and secondly because their economic structure in terms of agriculture is closer to the African model," he concludes. Addressing the South-South summit, Mr. Lula da Silva said that bilateral commercial exchanges had increased from 6 billion dollars to over 36 billion dollars in only six years, an indication of the success of South-South cooperation.

The timing this year of the South-South summit, which comes three years after the first was held in Abuja, the Nigerian capital, that is, immediately after the U.N. General Assembly in New York and G-20 economic summit in Pittsburgh, “suggests it may turn out to be a forum for many non-G-20 nations to respond and focus on their concerns about the way the global financial crisis is being handled,” hints the Associated Press.


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