When Stephen Harper buttons up his guayabera to join fellow heads of state and government for the sixth Summit of the Americas in Colombia this weekend, he and Canada will notice that something is different: For the first time, we may need Latin America more than it needs us.
Latin America prospered during the 2008-09 financial crisis largely because its house was in order, thanks to reforms put in place during earlier periods of economic turmoil. Countries also benefited from an enormous, continuing Chinese appetite for its exports and the region’s successful adaptation of bits and pieces of Asian policies of resource and economic nationalism where the state and state-owned companies play a bigger role in the economy – a direct rejection of the economic orthodoxy preached by the U.S., Canada and others.
It’s been the relative success of Latin American economic governance models against the failure of U.S. and European models, coupled with the rise of China as an alternative to dependence on the U.S. and Europe for trade and loans, that has Brazil and Mexico poised to become the world’s fourth- and fifth-largest economies in a few decades and Colombia to be a leader of the next group of superstar emerging economies.
As a result, among the countries that matter at the Cartagena summit, Mr. Harper will find little interest in the usual lectures from Canada. In fact, he may get pointed rebukes about our irresponsibility in refusing to adopt what these countries view as common-sense policies on charging royalties for mining and oil projects. There’ll also be questions about our capability to be a serious partner in the region.
Mr. Harper’s announcement five years ago that the Americas were a Canadian priority was noticed in the region. But the footnote, that Canada wouldn’t spend any real money in support of this goal, was largely missed. The same won’t hold this time.
In the past five years, the government has managed some accomplishments in the region by squeezing the few pennies that were spent beyond what seemed possible. But with the severe cuts in the government’s spring budget, even that penny is now gone. It will be hard not to notice these cuts in the region, especially when local government officials and business leaders are asked to bring their own lunch and coffee to meetings at Canadian embassies.
If the government hasn’t adequately funded investment in building relations with Latin America, Canada’s private sector has done worse. It has failed to invest in building broader and stronger relations through support, or even interest, in the types of research, policy and advocacy infrastructure that its competitors are funding to build their national brands in the region and secure future advantage.
All of this combines to make the region wonder whether anyone in Canada is serious.
Weak U.S. growth and potential for negative growth in Europe mean Latin America’s growing economies and growing middle classes in countries such as Mexico and Brazil are more important. As opposed to Asia, the region is also more important as a partner internationally in places and ways that matter to Canada, from Brazil’s running the United Nations mission in Haiti to Mexico’s establishing its own foreign-aid agency.
Canada has several advantages in the region, especially compared with China. But as more of the world looks to Latin America, Canada has to sell these advantages and fight aggressively for markets and influence in a region that now regards us as less important. The question is whether Canada still has the resources and ability to do so.
There are positive signs. Canada’s private sector will be well represented at the CEO Summit also taking place in Cartagena, and the government is set to reaffirm the Americas as a priority. But without adequate funding from the government, it will be up to the private sector to step in and step up.
Carlo Dade is a senior fellow at the University of Ottawa’s School of International Development and Global Studies and former executive director of the Canadian Foundation for the Americas.