MAC: Mines and Communities

Pm's Interest In Latin America Easily Explained

Published by MAC on 2007-07-26

PM's interest in Latin America easily explained


26th July 2007

On the face of it, Stephen Harper's sudden new fascination with Latin America is baffling. Until February, he expressed no interest in the region. Now, after a six-day swing through Colombia, Chile, Barbados and Haiti, he has declared South America a key foreign policy priority.

The Prime Minister explains his newfound interest in terms of geography and good will. Canada, he says, can act as a kind of third-way model for what he calls the "neighbourhood" - a model that, by eschewing both the two-fisted capitalism of the U.S. and the dirigisme of Venezuela, manages to combine free-market economics with progressive social policies.

In fact, the reasons for Harper's sudden infatuation are far less lofty. Canadian business has re-interested itself in South America. Ergo, so has the Canadian government. This is a classic case of the flag following trade. Colombia is perhaps the best example. Harper may be the first Canadian prime minister to visit that country. But that's only because there was no reason to do so before. Now, with the price of oil high and Calgary-based energy companies active in that country, there is.

The Colombian government is handing out oil concessions helter-skelter. Indeed, just a month before Harper's visit, two Canadian firms were awarded additional contracts worth $19.1 million (U.S.) Canada's Enbridge Inc. is operator and part-owner of a major Colombian pipeline. All are taking advantage of a new royalty regime that, as the magazine Canadian Dimension reported recently, the Canadian International Development Agency helped write.

So it's no wonder that Harper's first stop was Colombia. The government of President Alvaro Uribe, accused by Amnesty International of supporting death squads, is deemed so unsavoury that even the U.S. Congress has refused to ink a trade deal with it. Not so Canada. Harper praised Uribe and promised a Canada-Colombia free trade pact. "When we see a country like Colombia, that has decided it has to address its social, political and economic problems in an integrated manner, that wants to embrace economic freedom, that wants to embrace political democracy and human rights and social development, then we say, `We're there to encourage you,'" Harper said.

Then it was on to Chile, where the Canadian mining giant Barrick Gold is involved in a bitter dispute with locals over plans for an open-pit mine high in the Andes. In Santiago, Harper said he thought Barrick was acting responsibly.

Scotiabank president Richard Waugh was also on hand in Chile. The Canadian bank, which has a long history of involvement in South America, is on a big push in the region. About one-third of its 57,000 employees worldwide are Spanish-speaking.

Even poverty-stricken Haiti has business potential. Canadian firms are prospecting for gold there. As a Canadian entrepreneur told Canadian Press, the business environment has improved since the U.S., with the acquiescence of Canada, effectively removed democratically elected president Jean-Bertrand Aristide from power in 2004.

In short, it was a pretty standard prime ministerial trip. Jean Chrétien went to China to boost Canadian business interests. Harper went to South America for the same reason. With assets in Latin America worth $96 billion, Canada is the second-largest investor in the region. The Prime Minister's third-way rhetoric, with its implied criticism of the U.S., may play well at home. But down there, he's just following the money.

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