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At a time when the global financial crisis has cast its shadow in the developed world, South-South cooperation between India and Latin American, Carribean countries needs to be intensified. The rationale for such cooperation is also reinforced by the common challenges we face. Despite varying cultures and backgrounds, our countries face similar developmental problems. We all seek to provide equal and fair opportunity for the poorest of the poor in our countries to fulfill their aspirations. To address these challenges, it is necessary to be unified in our position during the deliberations of the WTO and other such bodies. We must also actively continue to collaborate with each other on issues such as climate change, international terrorism, reform of the United Nations, restructuring of the international financial architecture and other such critical matters.
Big Role
India’s economic and commercial linkages with the Latin American region are on the ascendant. The social political and economic transformation in Latin American countries stimulates India’s interest. The rising participation of people in political process and governance mechanisms and the major business alliances being forged by these countries in global markets, are symbolic of the significant changes sweeping across this region.
The diverse historical legacy, the cultural richness, and the socioeconomic importance of Latin America make it one of the most fascinating areas of the world to study and explore. Latin America produces 47 percent of the world’s soybean crop, 40 percent of copper and 9.3 percent of its crude oil.
The LAC region is destined to play a very important role in the global economy. The LAC region comprises 39 countries including dependent territories in the Caribbean, and accounts for a combined GDP of US$3.44 trillion and a trade turnover of US$1.65 trillion and a population of 562 million people. It also includes five of the world’s most bio-diverse countries — Brazil, Colombia, Ecuador, Mexico, and Peru — as well as the single most biologically diverse area in the world – the eastern slope of the Andes. Similarly, some of the richest mineral centres in the world are located in the LAC region. These countries are significant suppliers of copper, nickel, iron ore, hydrocarbons, bauxite and other important minerals which not only feed industries in developed countries but also in the developing world.
Economic Linkages
Given the economic strengths of these countries, there are excellent opportunities for enhancing this relationship. The process has already begun. Indian Business Conclaves are being held in Latin America by apex Indian chambers of commerce and industry. Trade missions are also being organized and increased participation in trade events is being encouraged. Government of India’s FOCUS LAC programme, which commenced in 1998, has been extended.
In this new era of economic interdependence and globalization, Indian multinationals from the ICT, auto industry, infrastructure, iron & steel, banking, pharma, mining and other industries are fast investing in these markets and setting up active business operations in these countries. India’s bilateral trade with Latin America during April 2007- March 2008 was to the tune of US$11.63 billion [imports- 6.5 billion and exports- US$5.13 billion]. Indian companies, excluding those owned by Non-Resident or Overseas Indians, have either already invested or committed to invest US$9.73 billion in LAC countries.
Trade and investment missions from these countries are also being organized. The trade agreements signed with the MERCOSUR group of countries and individually with Chile are examples of such initiatives. Bilateral Investment Promotion and Protection Agreements and Avoidance of Double Taxation Agreements have been signed with some countries and are being processed with others.
Regional Groupings
For India, the process of regional integration in Latin America is of great interest. In recent years, regional groupings such as the Andean Community, UNASUR, MERCOSUR, CARICOM are increasingly beginning to discuss and coordinate positions on important political and economic matters of mutual concern in international organizations. Of these groupings, the CARICOM countries have already established a common court of justice. The Central American countries, under SICA are also taking active steps to synchronize their developmental efforts. This was clear during my discussions with SICA Foreign Ministers in New Delhi in June 2008. Similarly, the ANDEAN Pact and MERCOSUR countries are also taking various steps for regional cooperation. Their efforts are, we understand, now increasingly being subsumed within the larger UNASUR grouping which was set up in 2004 and is supported by 12 LAC countries. At the Third UNASUR Summit held in Brasilia on 23 May 2008, all participating Heads of Government signed the UNASUR Constitutive Treaty which stipulates establishment of a South American Community, modelled on the European Union and seeks to provide for a common currency, single market, parliament, free movement of people for 90 days, common passport and integrated development of infrastructure and energy. This is an initiative of much significance.
Interaction Mechanisms
At the political level too, India’s interaction with Latin America is proceeding very well. In recent years, India had the privilege of receiving the Presidents of Brazil, Mexico, Chile and Venezuela. The Foreign Minister of Ecuador visited India recently and had fruitful discussions. India is now looking forward to receiving the Presidents of Chile and Argentina in India early next year. Colombian President Alvaro Uribe, and Ecuadorian President Rafael Correa too are expected to visit India in the second half of 2009.
From India, Prime Minister Dr. Manmohan Singh visited Cuba and Brazil in late 2006.
Hon’ble President of India Mrs. Parthibha Patil visited Brazil, Mexico and Chile in April 2008. The External Affairs minister Mr. Pranab Mukherjee visited Brazil in February 2008. Mr. Anand Sharma, Minister of State for External Affairs, has also been visiting LAC countries for holding dialogue with their dignitaries.
On 10 June 2008, India hosted the second India-SICA Foreign Ministers’ Meeting in New Delhi. The Indian Foreign Minister also interacted with his counterparts from these countries on the sidelines of the UNGA meetings in September-October 2008. Interaction with the LAC is also being pursued at other levels, through the mechanism of Joint Commission meetings, Foreign Office Consultations and Joint Working Groups.
South-South Cooperation
India’s commitment to South-South cooperation is reflected in the various capacity-building and development partnership initiatives in these countries. Indian Lines of Credit are being extended to some of these countries for developmental projects. Disaster relief assistance is also periodically extended to them. Under the Indian Technical Economic Cooperation, scholarships are being extended to candidates from these countries for pursuing short-term training courses in various disciplines. Indian experts are also being deputed under ITEC for providing guidance in key sectors. Similarly, the government of India is also funding establishment and running of IT centers in some of these countries.
(The article reflects the main thoughts of a speech delivered by India’s External Affairs minister Mr. Pranab Mukherjee on December 3 at the IGNOU campus while inaugurating the conference on Contemporary Latin America and the Caribbean)
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