Inauguration of the Lasso era and a banana rendezvous – 05/28/2021 – Latinoamérica21

The phrase República das Bananas is part of Latin American history and political imagery. After the product became of interest to the American United Fruit Co. at the turn of the 20th century, bananas were at the center of several military interventions and coups in the region.

Gabriel García Márquez immortalized in a fictional version the banana massacre of 1928 in Aracataca (Colombia) in “One hundred years of solitude”. The workers of the company went on strike for better working conditions, the United States threatened to invade Colombia if the movement was not suppressed.

The Colombian government, with the support of employees of the foreign company, killed its own citizens accusing them of being communists and left wounds that have healed until today.

Mario Vargas Llosa showed in the recent “Rough Times” the role of the same company in the US-sponsored coup in Guatemala in 1954. In this case, with the support of other countries in the region where the company was also operating.

In 2014, the decadent United Fruit Co., which has been operating since the 1970s under the name Chiquita Brands International, was acquired by two Brazilian groups and is now managed from Switzerland. That same year, on August 6, Jair Bolsonaro went to the Chamber of Deputies to accuse a notorious articulation of left-wing political parties of being behind the opening of the Brazilian market for importing bananas.

Banana protectionism

The parliamentarian at the time reacted to a normative instruction from the Brazilian Ministry of Agriculture which authorized the importation of bananas from Ecuador with health certificates issued by that country. In practice, the measure opened up the Brazilian banana market, one of the most closed in the world. Bolsonaro said the idea “certainly came from his colleague Dilma Rousseff because Ecuador is part of the São Paulo Forum”. At the start of the Bolsonaro government, the rule was repealed.

The current president of Brazil spent his childhood in two small towns in Vale do Ribeira, the poorest region of the richest state in Brazil. Most of his family still live in the one region of Brazil where banana production is his main economic activity. He argues that Ecuadorian competition “borders on terrorism” and would lead to scourges that do not exist in Brazil.

On Monday (24), for the first time, Bolsonaro visited a country where bananas are as important as the region where he grew up. The production dynamics of this product in Brazil and Ecuador are however quite different.

Ecuador is the world’s largest exporter of bananas. In 2020, it exported US $ 3.3 billion of the product, while Brazil sold only US $ 25 million, 44% less than it exported in 2010 and less than a hundredth of Ecuadorian sales.

The average banana productivity in Ecuador is 36 tonnes per hectare (t / ha), more than double that of Brazil. In Miracatu (SP), where a brother of Bolsonaro is the mayor’s chief of staff, the productivity is 15 t / ha and in Registro (SP), where the president’s sister is hospitalized due to Covid-19, the same area produces 17 tonnes on average.

Other fruits

In 2000, Brazil exported the same amount of bananas and grapes. In the following years, the banana market remained closed and the grape market was opened. The quality of Brazilian grapes improved more than that of bananas.

Twenty years later, there has been no significant change in the amount of bananas exported and that of grapes has more than tripled. Although Brazil imports far more grapes than bananas, the excess balance of grapes is more than double that of bananas.

When it comes to other fruits, such as mangoes and melons, Brazil’s trade performance is even more evident. In 2000, Brazil did not export mangoes and exported melons worth US $ 25 million. Twenty years later, Brazil exported US $ 247 million of mangoes and US $ 147 million of melons.

Presidential diplomacy

Since 2000, Brazil has led regional integration, making extensive use of presidential diplomacy. The first meeting with the twelve presidents in South American history took place in Brasilia in 2000, bringing together politically antagonistic presidents such as the Peruvian Alberto Fujimori and the Venezuelan Hugo Chávez around a common program.

In the 2000s, there were 12 meetings between representatives of Brazil and Ecuador. During this period, trade flows between the two countries increased from US $ 151 million to over US $ 1 billion. In contrast, in the past 10 years there have only been two bilateral presidential meetings, one in 2013 and the other in 2016. By 2019, the trade flow between Brazil and Ecuador had fallen to 915 million US dollars and in 2020 it fell in the United States. $ 686 million.

15 years ago, it was normal for the Brazilian president to travel accompanied by ministers of the economic zone and businessmen from different sectors. In contrast, in the Brazilian delegation in Quito, ideological deputies such as Eduardo Bolsonaro and Pastor Marcos Feliciano stand out.

Although he participated in the inauguration of Lacalle Pou in Uruguay, Jair Bolsonaro was not at the inauguration ceremony of five other South American presidents in the past two years (Argentina, Bolivia, Guyana, Suriname and Venezuela; in the latter case, re-election).

Brazil-Ecuador Economic Agenda

Bilateral trade between Brazil and Ecuador is marked by strong asymmetry and Brazilian protectionism. Brazil sells to Ecuador eight times than it buys domestically. Brazilian sales to Ecuador, as well as to other South American countries, are diversified and more intensive in industrialized products. Although Ecuador only accounts for 0.5% of Brazil’s total sales, the country buys more than 1% of industrialized products sold by Brazil.

The resumption of bilateral trade and the reduction of Ecuador’s deficit could be possible through improvements in infrastructure and the reduction of non-tariff barriers. Apparently, the Brazilian president’s visit to Ecuador will be purely political and will not advance the economic agenda.

The structuring of the multimodal route between the port of Manta in the Pacific and Manaus or the opening of Brazil to the import of products with which Ecuador is very competitive, such as bananas and shrimp, will be left for another opportunity. .

In recent years, Brazil has unilaterally renounced its two main instruments for promoting exports to the region: BNDES post-shipment finance and ALADI’s reciprocal payment and credit agreement (CCR). By not presenting a trade policy for South America, Brazil sees its industrial exports fall.

Guillermo Lasso

The new Ecuadorian president was elected after securing less than 20% of the vote in the first round and beating newcomer Andrés Arauz in the second round by a narrow margin. Politically right-wing and born in Guayaquil, the main city on the Ecuadorian coast, close to banana and shrimp producing areas, Guillermo Lasso identifies more with other self-proclaimed liberal millionaires who have recently ruled in South America, such as Mauricio Macri or Sebastián Piñera than with Bolsonaro.

What could be a meeting of regional political leaders to resume presidential diplomacy and deepen integration on issues such as public health and economic recovery, it looks like it will be limited to yet another expression of the political fragmentation of the ‘South America.

In the days leading up to the inauguration, the Presidents of Chile, Colombia, Paraguay and Uruguay withdrew from the appearance. The presidents of Argentina, Bolivia and Peru have shown no interest in going to Quito. The president of Venezuela has not even been invited, and Ecuador has little connection with Guyana and Suriname.

Of the eleven South American officials who could surrender in possession of Lasso, only Bolsonaro went to Quito. The presence of the president of the largest country in the region did not attract neighboring representatives, reflecting an unprecedented lack of leadership and isolation. It’s raining in Macondo and they don’t even talk about bananas.

www.latinoamerica21.com, a plural medium engaged in the diffusion of critical and truthful information on Latin America.

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