A role reversal as former colonies meet former colonists at Ibero-American summit
Spain and Portugal, once the heavy hitters in the annual meeting of Iberian and Latin American nations, are now looking to their one-time colonies for help amid their debt crisis.
Spain and Portugal, once the heavy hitters in the annual meeting of Iberian and Latin American nations, are now looking to their one-time colonies for help amid their debt crisis.
On Friday聽in the historic Spanish port city of C谩diz, the leaders of Spain, Portugal, and Latin American nations gathered for the 22nd annual Ibero-American summit. But unlike past meetings, the European nations are no longer running the show: now the former colonists are seeking help from their empowered cousins.
The tables have turned since the 2007 edition, when King Juan Carlos infamously said 鈥淲hy don鈥檛 you be quiet鈥� to Venezuelan President Hugo Ch谩vez in a moment which came to represent Spain鈥檚 arrogance and Latin American muscle flexing. Today, Spain and Portugal are in dire economic shape and will remain crippled for at least another couple of years, if not more.
In contrast, Latin America is consolidating its political and economic transition toward stability, despite strong headwind from the global slowdown. Eighteen heads of state will attend, including economic powerhouses Brazil and Mexico, as well as the rising emerging powers Chile, Colombia, and Peru.
The main goal of the summit is to 鈥減ropel renewed relations,鈥� Prince Felipe, Spanish heir to the throne, said recently, echoing the message pushed by organizers. Relations can be transformed by strengthening ties already in place and by 鈥渙pening new frontiers that are good in this juncture that Spain and Portugal are living,鈥� said Enrique Iglesias, the Ibero-American secretary general, in a Q&A published in Spanish media this week.
Spanish press described it more succinctly as the country seeking a 鈥渓ifejacket鈥� from Latin America.
The economic imperative
Spain鈥檚 economy has been free-falling since the crisis began in 2007, only managing to pull off discreet growth in 2011. Record unemployment tops 25 percent and continues to rise, and most forecasts expect further acute economic contraction in 2012 and 2013, with only modest recovery thereafter.
Portugal is in worse shape, and its finances are already being supervised by the European Union and International Monetary Fund after requesting a bailout.
But Spain鈥檚 economy is much larger and its downturn reverberates much more globally. Spain鈥檚 biggest banks and companies are already making most of their profit in Latin America rather than at home; its government is seeking, not offering, foreign investment; and perhaps most telling of all, Spaniards are increasingly migrating to Latin America, not the other way around.
Indeed, that is actually one of Spain鈥檚 best arguments for greater cooperation with Latin America, Mr. Iglesias said. 鈥淣ow there is emigration to Latin America of qualified human capital鈥� that the region can profit from. Additionally, 鈥渘ow there is capital in Latin American that can be mobilized鈥� as investment to Spain and Portugal.
The main goal of the summit, organizers say, is to reach an agreement on how to increase multilateral cooperation of small- and medium-sized companies, which account for 95 percent of the companies on both sides of the Atlantic and for 60 percent of the labor force.
Latin America, with a population of 550 million, has made impressive strides to reduce poverty聽this century, down from 50 percent to around 30 percent, while middle classes have increased around 50 percent聽and continue to swell, according to the World Bank. Meanwhile, poverty is increasing in Spain and Portugal.
But then again, few 鈥� not even Spaniards 鈥� have high hopes of a breakthrough during the summit. The gathering is 鈥渟ymbolic,鈥� said Ecuadorian President Rafael Correa on arriving.
鈥淭hat鈥檚 one of the things us country leaders have to think about, that our people get tired of us attending so many summits, while they are facing so many abysses.鈥�
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No shows
Argentina and Venezuela, along with Cuba, Uruguay, Guatemala, and Paraguay will be no shows.聽
Cuba鈥檚 Raul Castro and Mr. Ch谩vez declined the invitation, as they have for years, in Ch谩vez鈥檚 case since his faceoff with the king. Argentina, Uruguay, and Guatemala excused themselves for health reasons, although relations with Buenos Aires have been frosty ever since Argentina's expropriation of the majority stake in its biggest oil producer, YPF, owned by Spain鈥檚 Repsol.
Paraguay was politely asked not to come after South American countries, including Brazil, had threaten to boycott the summit otherwise. Most Latin American countries do not recognize Paraguay鈥檚 ruling regime after a dubious impeachment in the country that forced the former elected leader to resign.