A report prepared by the Senate Standing Committee on Foreign Affairs, Defence and Trade has called for greater Australian participation in the economies of Latin America to take advantage of privatisation and other neo-liberal economic reforms sweeping the region. From Managua, STEPHEN MARKS comments on the report, "Australia and Latin America", issued in June.
Australian business already has a toehold in Latin America, especially in Chile, where Australia is the third largest foreign investor.
BHP has a total of A$1 billion invested in the region. Davis Gelatine Consolidated has major investments in Colombia and contributes 60% of Latin America's gelatine production. MIM Holdings is involved in the mining and refining of non-ferrous metals and, like BHP, has a particular interest in Chilean copper. Western Mining Corporation has significant gold interests in Brazil and Chile. Melbourne-based Ansell markets and produces latex and rubber products from a factory in Juarez, Mexico.
The report states that Australian companies should be good employers "in a manner not significantly at variance with Australian standards", but this is often not the case. The biggest Australian operation is the La Escondida Copper mine in Chile, where BHP claims that the 900 workers have "chosen" not to be unionised. Both BHP and MIM admit they pay wages only at low local levels.
Many Australian investments in Latin America are in partnership, such as at Escondida where BHP is in partnership with RTZ Corporation and the World Bank. BHP claims this arrangement adds "some security from sovereign risk if things in Chile should change adversely" because those responsible would then have to "offend such a wide range of countries and important organisations".
Australia's annual exports to Latin America are currently valued at about $1 billion, or only 1% of Australia's total trade. Brazil is by far Australia's largest Latin American trading partner with two-way trade in 1990-91 of $445 million.
The committee is overwhelmingly positive about Latin America's economic potential. The report claims that "on the whole Latin America's debt burden has improved significantly over the last few years" but also admits that "at the end of 1991, Latin American foreign debt was US$426 billion, about the same as 1990".
While the main thrust is towards trade and investment, the report does advocate stronger links with Latin America across a range of economic, cultural and academic activities.
The report estimates there are 60,000 persons of Latin American origin living in Australia, mainly from Chile, El Salvador and Nicaragua. Spanish is now seventh most widely spoken language in Australia and by the year 2000 it will be second only to Mandarin as the language spoken f people across the world.
The report recommends increased Spanish language training and Latin American studies and research, arguing that business will benefit from this. It is interesting that the committee released the report to coincide with the anniversary of Columbus's "discovery of the New World", a rather insensitive reference given Latin America's cultural heritage.
Creating greater cultural and academic links is also presented as an opportunity to market educational services to fee-paying Latin American students, despite the bad reputation that Australian education for profit is developing in Asia.
The report adopts a peculiar definition of what constitutes Latin America, excluding the Caribbean. In this way the report avoids what could be seen as sensitive topics like the US blockade of Cuba or relations with Haiti.
There is also a rather peculiar view of historical events in the report, which claims that El Salvador was a democracy as early as 1984 and ponders the question of what type of "military dictatorship" the former Sandinista government in Nicaragua represented.
While the report proposes greater trade and investment in Latin America, it does not propose greater foreign aid, which has totalled a paltry $10 million over the past 12 years. This tiny sum is excused by saying Australia gives to the "largest contributor to Latin American development programs", the World Bank.
The Declaration of Managua issued by the parties and movements of Latin America at the Forum of Sao Paulo meeting in July stated that it has been precisely the neo-liberal dictates of the IMF and World Bank that have devastated economies of the region. But the report doesn't quote those submissions to the inquiry which made this point.
Overall, the report concentrates on relations with Argentina, Brazil, Chile, Colombia, Mexico, Peru, Uruguay and Venezuela as the countries with the most investment and trade potential. While most of the 63 recommendations simply relate to business and trade, others such as improvements in travel and transport links, educational exchanges and language promotion are welcome.