Asunción del Paraguay 
International Conference of governments and social movements
"Regional Integration: an opportunity to face the crises”
21 and 22 July 2009
Consejo Nacional del Deporte

On the European model of integration in a global context

Because of systemic constraints in the so called leading nations we cannot wait for the Obamas and even Lulas of the world to show the way for the deep changes we need. Political, cultural and moral initiative that will inspire hope on all continents can and needs to come from many places.
 In the golden age of the Nordic model, the small North European area that I come from, had disproportionate global significance in pro-people politics. Many of us in these countries still work to preserve and take further the Nordic tradition. We must, however, humbly admit that the Nordic identity has weakened in the last 15 years as we have been been overwhelmed by globalisation and EU-integration 
In this spirit I want to join the large number of people on all continents who enthusiastically welcome the recent wave of positive developments in Latin America, including also many smaller countries, such as Bolivia, Ecuador and Paraguay. I recognise the enormous difficulties you are facing, including the current crisis in Honduras. Nevertheless I want to welcome the quality and direction of development in many South and Latin American countries in the last few years and the efforts and the decisive contribution of ordinary people from the struggling classes to them.

A. GLOBAL AND HISTORICAL PREMISES OF REGIONAL COOPERATION  

Regional integration in the context of collapsing neo-liberalism, authoritarian capitalism and the search for cultural alternatives

1. “Neoliberalism died in 2008-2009. ” Is this statement true or false?
	It is true in a limited sense. The state is back in the economy. Simultaneously deregulation, privatisation and trade liberalisation are all on a hold or they are rolled back. George W. Bush goes down in the books as the greatest socialiser of banks and enterprises in world history. Market fundamentalism will not come back easily as an economic orthodoxy. So far so good.
	Nevertheless, as we have seen during the past months the demise of neo-liberalism does not mean the end of capitalism nor does it automatically change the balance of power or fundamental policies. Banks are bailed out and the costs of enterprise failures are carried by tax-payers. In the EU the centralising and liberalising Lissabon treaty is back on track. In India the elections were won by a centre right still pursuing growth through exports, international competitiveness, intensified exploitation of domestic natural resources and deepened integration into global markets. Obama brings the US back on a more Keynesian track and into multilateral cooperation, but his victory was more due to the catastrophic results of Bush’s politics than of a desire for fundamental redirection of US power. Financial regulation remains weak, tax havens still work as usual and even the Tobin tax awaits its implementation. In the global arenas, at WTO, the World Bank or even in the climate negotiations positive news are yet to come. All in all, it is clear by now that radical shifts in power structures, economic distribution or national or international policies are not easily within reach. 
	The main lesson of the past winter is that neo-liberalism was always only a radical fashion, a tip of the iceberg. When it goes away we can see again clearly that the modern state in most countries remains committed to a development model in which a mix of capitalist, growth dependent exploitative economy and consumerist, individualistic, civilisational values remains central. The global trend in the last years and months is not that neo-liberal capitalism is replaced by socialism, a new green politics or even social liberalism but, unfortunately, by authoritarian capitalism. In fact, what we witness on all continents is a colossal lack of political and cultural creativity in the state and corporate sector. Hence, and this is my first point today, people seeking social and ecological justice need to recognise that the shift to politics for sustainable futures that the world so badly needs will not come about just because neo-liberalism goes away.
	The good news is that with neo-liberalism gone, with George Bush down and out and with the states and business sector at a loss both intellectually and morally we can begin to understand our responsibility and define our tasks and challenges more clearly than has been possible during the past ten years. 
	Everywhere people recognise that the ruling elites are failing and at a loss. We need a new internationalism that is not founded on state to state cooperation or market integration. The regional cooperation we are looking for must protect and build upon people-to-people solidarity and conviviality. It must draw its strength from the confidence and creativity of ordinary people who are engaged in a multitude of local struggles and in a plurality of efforts towards decolonisation and civilisational renewal.

2. Too often only the global and national level are recognized as relevant political arenas. They are important, but should not make us overlook the relevance of the local and regional levels. From the perspective of radical and comprehensive democracy building from below and strengthening the disempowered is essential in all responses to the crisis. Democratising the politics and economy of globalisation is important but difficult. In global efforts large corporations and states still have a relative advantage over other actors. Hence, as long as power structure are not altered, we should not expect too much good to come out from institutions working on global regulation of e.g. finance and climate.
	The experience of the past years has shown clearly the inadequacy of the current structure, instruments and policies of global financial regulation and economic development. The Bretton Woods institutions and the WTO-framwork have been insufficient or even dysfunctional for development, ecological responsibility and economic stability, especially for the global South. This much should now be uncontroversial. It remains open, however, what the implications are for the politics of global governance and the role of regional and national politics. 
	Regional politics needs to be recognised more than before as a relevant arena of political initiative in its own right. The regional arena is too often considered to be only complementary to nation states and global institutional arrangements and global governance. Regional cooperation in the South can provide protection from dysfunctional and failing global institutions. It can also strengthen the bargaining power of the South, especially the smaller countries of the South, in global politics. Thirdly, regional political instruments may play a huge role in achieving at the regional level governance services and functions that are not available at the global level. These can include for instance protection and support of micro and small enterprise as well as of local knowledge systems and forms or democracy, the launch of local and regional currencies with high social and ecological value, and so forth.

3. State borders are becoming more porous than before, people are meeting and mixing more than before. The future belongs, as Indian social philosoper Lohia said fifty years ago, increasingly to “the bastards.” We see every day along the Southern borders of the US and the EU that efforts to keep borders closed and nations clean lead to disaster. Regional cooperation presents major opportunities if the physical and cultural mobility of peoples in the region and between them is enhanced. The opposite politics of regional integration which allows mobility only internally and is closed to the outer world, with exceptions allowed only for selfish reasons or on market premises is a false and dangerous model.
	In societies atomised socially and empoverished culturally by late capitalism and consumerism nation states are often seen as competitors. The sense of competition fosters widely felt anxiety. As we have seen in South Asia, Europe, North America and elsewhere the consequence is often un upsurge of xenophobic identity-politics, increasing militarisation and securitisation and even terror by states and non-state agencies.
	 Regional protection and strategic cooperation should be built with a clear commitment to global solidarity. (More on this below.)
	 In building regionalism for a new internationalism it is essential that we go beyond the current logic of competetive identity politics. In this a people-to-people cooperation and diplomacy, as pursued for instance in the World Social Forum and by a multitude of innovative smaller groups and movements  during the past years, can play an important role. The legitimacy and need for non-state political cooperation is obvious and  in regional cooperation as well tax-payers money and other public resources should not be exclusively spent on state and market driven integration.
	Having said this let me stress that our efforts must complement and give life to, but not undermine the UN centred multilateral system. The G-192 that met in June 2009 for a UN General Assembly on the financial crisis and its impact on development also needs strengthening.

4. Regional cooperation in the South should not only protect the weak today. It should also lead the world out of its multiple crises on the long-term. Globally the political debates seem to be moving from a discussion of separate crises to a discussion of inter-connected crises: of the finance sector, the world economy, political governance, food, water, development and climate. I welcome the synthetic framework of this conference. I only want to add that not only are the different areas of crisis interconnected and systemic. They should all be seen as symptoms of an underlying cultural crisis; a crisis of development models and the fundamental aspirations and ideals of modernization.
	My fourth suggestion is that all political reforms and initiatives now of the short and medium term should be shaped so as not to hamper but rather support a civilisational shift in which the ultimate goals and ideals of development are reconsidered. It is clear that people, states and corporations in Europe and America must be pressed to responsibility and that those of us who belong to the global North must pay for the mess we have caused during five hundred years through exploitation of other continents and mother earth. Nevertheless, for historical, cultural and social reasons the global North cannot be trusted much in the search for new civilisational visions and new socially and ecologically enriching models for progress and development. The global South must take the lead. Regional cooperation in the global South and between increasingly self-reliant but co-operating Southern regional blocs can be essential for gaining economic, political and cultural autonomy from Europe and the US, serving global solidarity and environmental responsibility.
Latin America, with its strong tradition of mass participation in politics, progressive left movements, liberation theology and its great cultural variety should be a strong region in this search. In recent years the increasingly lively alliances throughout the region of indigenous and other emancipatory movements, that has given one country a president coming from the indigenous movements and another country a constitution that recognises Mother Earth is of particular interest for people on all continents who are searching for new political tools, ideas and visions. In decolonising development, articulating new visions of good life (buen vivir) and building radical democracy the movements South America are today a great source of energy and hope for people on all continents. It is important for us all that this political and cultural resurgence is placed at the centre of regional integration here.

5. Nuclear proliferation, the totalisation of war through the war on terror and anti-hegemonic insurgency with little or no dependence on states, and the largely uncalculable threats of new military technologies combining e.g. new IT, nano-technology and genetic engineering make 21st century questions of war and peace more intractable than before. For this reason pro-people regional cooperation should systematically promote cultures of sustainability and peace.
	Peace-politics cannot imply thoughtless pacifism. We can still draw insight and inspiration from the Gandhian notion of and experiments with truth-force (“satyagraha”). This year 100 years have passed since Gandhi wrote his definitive statement, the pivotal pamphlet Hind Swaraj or Indian Home Rule on board a ship between Britain and South  Africa. The new politics of global security that we need, must, as Gandhi and others have clearly seen long back, be linked to the construction of pro-people and environmentally sound development models. These can emerge on the basis of the variety of sustainable life-styles, democracies and civilisational values existing today especially in the global South.
 	The industrial growth centred development model that first emerged in Europe and North America in the 18th to 20th century needs to be seriously reconsidered. The global record seems to be that industrial growth economies are not capable of overcoming poverty and deprivation everywhere. Without a commitment to peaceful cooperation and civilisational alternatives zero-sum competition for growth and unsustainable life-styles among nations and regions is likely to dominate global politics in the 21st century. Then, regions are more than likely to develop into competing, protectionist blocs forming strategic alliances. Even under the condition of functional interdependence globally of the competing blocs, climate change, development failures and resource depletion combined with nuclear proliferation and the evolution of new military technologies may easily lead to completely new types of wars with planetary consequences. Hence, regional cooperation in Latin America, in other Southern regions and between them needs to be globally oriented towards cooperation and solidarity, not competition. It may be helpful in this regard to think of the global North in a new way: not as the developed regions that have made it, but as regions suffering from serious development failures. Even quite conservative new models for measuring overall success in development, such as the so called Happy Planet Index, indicate that life-conditions in the US, Sweden, Germany and other similar countries reached an all-time high in the 1970s and haved steadily deteriorated since then.

B. LESSONS FROM EUROPE

Since the early 1950s the emergence of the European Economic Community, the EEC, and its sequel, the European Union, these organisations have been the dynamic centre of European  integration. The EU is now the most advanced model of regional integration globally. It has the largest internal market, the most ambitious common political instruments and the tightest juridical integration. 

European integration has gained popular support and political legitimacy from two great promises. It has been seen, first, as a peace project and, secondly, increasingly in later years, as a project for benign, political governance of corporate driven globalisation. Without these impressive ideas European integration could not have been brought to its present level. Both ideas are now in a crisis.

I wish to bring out some lessons for regional integration from the fifty years of building the European Union:  

(1) Peace ambitions may undermine democracy: 
Since its inception in the 1950s the EU has been seen as a device to overcome the belligerent tendencies of nation-states. Drawing on analysis and inspiration coming from the 18th century German enlightenment philosopher Immanuel Kant and others, the idea has been to promote peace through functional integration of the national economies in the region.
The dark side of this idea was that EU integration has worked top-down. The people have been seen as prone to aggressive sentiment. Integration has proceeded on the initiative and under the leadership of bureaucratic elites. Economic integration has intentionally been built as a device that will promote political and other integration later, behind the backs of the reluctant citizens. This top-down heritage has contributed to the creation of the so called democratic deficit of the European Union. In recent years this deficit in Europe has become obvious to all. The repeated side-stepping of the outcome of national referenda on EU-issues, such as the French and Dutch rejection of the EU constitution and the Irish rejection of the Lisbon Treaty is rapidly leading Europe to a very serious and deep crisis in democratic legitimacy and participation.
The deficit is structural: decision-making in the EU is so undemocratic that, ironically, the EU, if it would be a nation, would hardly qualify for membership in the EU.  Because of the post-war technocratic logic of EU-integration the democratic crisis in Europe is also very deep-seated. It will take time to overcome it. At the moment, the effort by EU-leaders to enforce the Lisbon treaty show that so far the EU is on the wrong track in this regard.
The lesson to be learnt is that regional cooperation must, much more than has been the case in Europe, be built democratically, with explicit consent and support by the citizens.

(2) Peace ambitions regionally may be counterproductive for peace globally:

In the aftermath of the second world war the sound ambition of the architects of European integration was to prevent the outbreak of war between European nations. Less attention has, for understandable reasons, been paid to the contribution of Europe to global security. The consequence is that wars between the leading countries of Europe has become highly unlikely. Simultaneously the integration between them runs the risk of becoming, or has perhaps already become, counter-productive for global security. In the great wars of the Bush regime – on Iraq and Afghanistan – a new obscene division of labour is emerging between the trans-Atlantic forces. The USA carries the main burden of classical warfare, the EU steps in economically and logistically in the aftermath of the war, taking care of crisis management. This, it may be argued, is the new logic of Western, imperial military hegemony.
	If other regions follow the EU model and turn to regional integration of foreign policy, security policy and trade policy as instruments for selfish and hegemonic ambitions the ensuing world order may easily end up repeating the calamities of what we in Europe call the westphalian order of competing, sovereign nation states, at a new, higher level.

(3) Regional cooperation for global governance needs to be built democratically from below. Special care must be taken at every step to keep economic policies within democratic control and to avoid spill-over from economic policies on social protection, environmental protection and other vital policy areas:

Since the 1980s the main left and centre argument in favour of deepening European integration has no longer been the argument from peace. The new argument has been the argument from globalization. The main ideas are familiar to all by now. Technological changes have made possible deep changes in the economy. Deepening economic interdependence between nations and regions, the increasing importance of a globalised capital market and the increasing size and power of transnational corporations have overburdened the steering and regulating capacity of nation states. For these reasons new instruments for political regulations are called for. The European Union has been seen by many as a much needed instrument for improved global governance of the economy at first, and now increasingly also of climate change, migration etc.
	For this and other reasons the primacy of economic policy instruments is a deep-seated feature of European integration. The creation of a common internal market and of common external economic policies, especially as regards trade, has been a priority in European integration.
	In this tradition markets and trade have often been given politically very expansive interpretations: in the EU (as in the WTO) liberalisation of trade in goods has not been enough. Free movement of capital, labour and services have been seen as equally natural parts of economic integration on liberal premises. In consequence, the more the economic instruments have developed the more they have dominated over other policy areas in which decision-making has been more confined to the national level. Social policy, workers rights, health and education, environment have all suffered from a subordination to common economic policies. The strong efforts by trade unions, left governments, environmentalists, women’s movements and others to change the balance of forces in Europe have so far met with, at best, half-success. Recent key developments, such as the text and ratification process of the Lisbon Treaty, the formation of Europe’s new global economic policy, and the struggles over the working time, services and chemical legislation at the European level, show that corporate interests and narrowly defined economic goals still tend to dominate EU-policies.
	The lesson for other regions is again negative. It is extremely dangerous for democracy, ecology and social justice to make economic cooperation the heart of regional integration.

(4) Regional integration is possible but needs to be democratic:
	
Let me close on a more positive note with some recommendations drawn from the European experience:

(i) Regional integration needs to be built democratically. Economic integration should be subservient to social justice and radical democracy.
To this end, there are four  fundamental conditions:
	One: the fundamental principle of democracy, that all state power and all power of regional authorities belongs to the people, must always be recognized formally. (In the EU this is still not the case!)
	Two: It is imperative that the juridical hierarchy, including the effective control of constitutional rights and freedoms of people and nature, is never subordinated to economic policies or juridical agreements regulating the economy. In the European Union the primacy of economic rights and freedoms at the level of the common regional market and in trade agreements infringes more and more on the human rights achievements. This is not only a concern at the international level where bilateral and multilateral free trade agreements are known to undermine human rights. Also internally in Europe social rights achievements have some times been undermined by the economic logic of integration. 
	Three: the peoples must always have effective control, before the fact and after the fact, of the balance of powers between regional and national authorities. In practice, referenda about the division of power between the regional and the national level is an important instrument. It could be complemented by the power of national parliaments to question and interfere in the formation of this balance by.
	Four: the political logic of democratic regionalism by the people and for the people should be pluralistic and decentred. When the peoples are in effective control of the balance of powers different countries will participate in different ways in regional cooperation, taking exceptions as they see fit and forming sub-units of tighter cooperation as they see fit. This should not be seen as a problem. The example of the European Union shows that even when integration is rigidly designed to create a Union of just one kind of members the end-result is unlikely to conform with the plan. In actual fact different European countries have different between them quite different kinds of membership in the EU both politically and juridically. 

(ii) Economic policies of regions should learn from the failures of the neo-liberal experiments in the EU and elsewhere:
	
+ A Latin American Central Bank issuing a common currency that may in the long run function as a reserve currency should work under democratic political guidance and may then pursue socially and ecologically responsible monetary policies;
+  The political weight and influence of large corporations tends to be relatively greater on regional than on national and local levels of political decision-making. In order to curb excess corporate influence strong measures must be taken at all times. They need to include very tight transparency regulation and, as I believe, innovative, radical anti-trust regulation. One possibility is legal regulation of the maximum size of private corporations and another is sealings on individual ownership and other engagement in corporate activity.

(iii) Regional cooperation may have democratizing effects on the relations between big and small countries. For this, effective, almost excessive formal veto powers by smaller members states in the regional organisations are needed to counter the effective and lasting, greater political weight of larger members. 

(iv) Regional, elected parliaments can play an important role in a new regionalism. The elected parliament should not be subordinate to regional non-elected bodies, but the extent of its powers needs to be controlled from lower levels.

(v) The world has seen the emergence of many special economic zones lately. In a new kind of regionalism special zones for people's power from below can be created, where people and nature are protected against corporations and states. In Bolivia there seems to be encouraging experiments along this line that could serve as a model for further work.

(vi) The European experience shows that regional cooperation can be effective in enhancing the power and  economic and social status of oppressed minorities and underprivileged regions. The mechanisms to achieve this need careful attention.

(vii) If we manage to correct the imbalances mentioned the European Union shows that cultural and social solidarity between peoples with a long negative record of wars is possible and can be promoted through regional cooperation. 

(viii) Lastly, as compared with Europe, Latin America (as well as e.g. South Asia) has four distinct advantages as compared with Europe in its effort to build pro-people, ecologically sustainable regional cooperation to the benefit of the global community.
	+ The first is a commonality of cultural values and identity. I do not want to under underestimate the cultural diversity of the Americas. But it seems to me as an outside observer that the experience of more than 500 years of colonialism and imperialism serves as a source of solidarity between the peoples in Latin America.
	+ The second is common languages: Spanish and Portuguese are closely related. Again I hope that I do not offend the many people with other languages as their first language if I say that the conditions for a common public space, and hence for radical regional democracy, is more happy in Latin America than in some other regions. In view of recent experiences elsewhere this is likely to be more important for post-national democracy than computer-intensity.
	+ The third is common interest. Again, I do not want to overstate the case, but it appears to me that all countries in Latin America could gain in economic and cultural terns from deepened cooperation between them and also with other Southern regions, even if it has to happen at the cost of laxer links to Europe and North America.
	+ The fourth is the mere fact that Latin American efforts towards regional integration can learn from the European experience, positively and negatively. For instance, it appears to me that it can be advantageous to build relatively more on existing sub-regional organizations than has been done in the European context where Benelux, Nordic and other sub-regional cooperation structures have been eroded by European institutions when a better policy could have been to sustain and strengthen them as parts of a multilayered regional cooperation structure.

Latin American regional cooperation may also benefit from solidarity and cooperation with regional cooperation in other regions of the South. Together the cooperating regions may make historic contributions to a post-colonial and post-imperial, pluricentric and peaceful world order.

With these remarks I wish Paraguay and all countries in Mercosur and South and Latin America at large determination and democratic energy for regional cooperation that will enhance a new internationalism and civilisational renewal world-wide.

Thank you for your attention.

Thomas Wallgren
E-mail:  thomas.wallgren@helsinki.fi