Taiwan leader surrenders powers BBC News
Taiwan's President Chen Shui-bian has ceded some of his powers amid a growing political crisis caused by a corruption scandal implicating a family member. He said he was handing control of the cabinet to the prime minister and would take no part in political campaigning. But Mr Chen's spokesman said he would keep diplomatic and military portfolios and would also oversee ties with China. Mr Chen's announcement comes a week after his son-in-law was detained on suspicion of illegal share trading. The case against Chao Chien-ming had prompted calls by opposition politicians for the president to resign.

'Ignominious retreat'
Mr Chen said he was handing over power for the day-to-day running of the island to Prime Minister Su Tseng-chang.


He said he would no longer intervene in the running of Taiwan's governing Democratic Progressive Party (DPP). The president also promised that his family would not engage in public functions other than charity events. It is an ignominious retreat for a man who has built his political career on cleaning up Taiwan's notoriously corrupt politics, the BBC's Rupert Wingfield-Hayes reports. His party was heavily defeated in recent local elections, and the president's personal popularity is at an all-time low, our correspondent says. But he says Mr Chen is still a clever tactician. There are two years to go until he must step down as president and if his party is to have any chance of winning the next presidential election, Mr Chen knows he must now get out of the way. It is no coincidence that the man tipped to be the DPP's presidential candidate in 2008 is the current premier, our correspondent says.

Darfur peace deal deadline passes BBC News
A deadline for the two remaining rebel groups in Sudan's Darfur region to sign up to a peace agreement has expired. The Justice and Equality Movement and a faction of the Sudan Liberation Army rejected the deal, initial reports say. African Union mediators had been trying to persuade them to sign the 5 May deal before 2100 GMT on Wednesday. The two groups have demanded changes to the text of the agreement aimed at ending three years of conflict, in which least 200,000 people have died. The conflict has forced some two million people to flee their homes, in what aid agencies say is one of the world's worst humanitarian crises. Only the main faction of the Sudan Liberation Army signed the AU-brokered deal with the government in the Sudanese capital, Khartoum.

Sanctions threat
Last-minute talks with the two groups have been continuing both in Khartoum and in Slovenia, where its president is leading negotiations. AU spokesman Noureddine Mezni told AFP news agency that AU commission chief Alpha Oumar Konare Konare would "indicate the next steps to be taken" on Thursday. The AU has warned that the rebels refusing to sign the agreement could face sanctions and that it will urge the UN Security Council to do the same. The two rebel groups say the current deal is unjust and are asking for:

• More political posts in a proposed transitional government
• A say in the disarmament of pro-government militias
• Compensation for victims of the conflict.

The rebels took up arms in February 2003, accusing the government of discriminating against Darfur's black Africans in favour of Arabs. The Sudanese army and the pro-government Janjaweed militia then began attacking civilians in Darfur, driving people from their homes and attacking refugee camps. A lack of money and insecurity means aid workers cannot reach parts of the region. Sudan denies arming the Arab militias and says the problems have been exaggerated.

Japan May Plant a Flag in Students' Backpacks

TOKYO-A bill would mandate that patriotism be taught. Not everyone
salutes the idea. By Bruce Wallace.
http://email.latimes.com/cgi-bin1/DM/y/e3X...Io30G2B0HZ8W0E7

U.S. Troops May Have Fired at Kabul Crowd

KABUL, Afghanistan-Military says an initial inquiry indicates guns
were used in self-defense after an accident in the Afghan capital
that sparked deadly riots. By Paul Watson.
http://email.latimes.com/cgi-bin1/DM/y/e3X...Io30G2B0HZ8X0E8

Java quake death toll increases BBC News
The number of people killed in the earthquake which hit the island of Java on Saturday has increased to more than 6,200, Indonesian authorities say. At least 30,000 people have been injured and more than 105,000 homes destroyed or damaged, leaving hundreds of thousands of people displaced. However, authorities say they expect the figures to rise as further damage assessment is carried out. The UN says aid is now getting through to most areas. But a UN official said hospitals were struggling to cope with the numbers of injured. "Most of the hospitals are functioning, but are overloaded. There is a lack of space in the hospitals," Charlie Higgins, the UN's humanitarian co-ordinator in Yogyakarta, the city worst affected by the disaster, told AFP news agency. "It's getting out the basic medical supplies to the hospitals that is important," he said.

Aid efforts
As hospitals remain overcrowded and delivery of aid has been hampered by bad weather, some locals have been forced to spend a fifth night without shelter. A field hospital set up by the US in Sewon, south of Yogyakarta, is expected to become fully operational on Thursday. The UN's top humanitarian co-ordinator, Jan Egeland, was optimistic about the aid effort. "Of course there are villages and people who have not yet got assistance because there are hundreds of thousands of severely affected people in a big area and we're less than a week into the emergency." "I think the Indonesia system works. It has been working very well," he said. President Susilo Bambang Yudhoyono, who spent four days in the region, said he had enough confidence in the relief efforts to return to the capital, Jakarta. The 6.3 magnitude quake hit the ancient city of Yogyakarta early on Saturday. The region is close to the volcano Mount Merapi which has been spewing lava and ash for some weeks. The Asian Development Bank has promised $60m (£32m) in aid and loans to help the affected region. The Indonesian government has pledged an initial 12kg of rice per family, and 200,000 rupiah ($21) for each survivor to cover clothing and household goods, and compensation for damaged houses.

Three 'militants' killed in India BBC News
Police in India say they have killed three suspected militants who were planning an attack on the headquarters of a Hindu right-wing organisation. Officials said the militants were targeting the headquarters of the Rashtriya Shyamsevak Sangh (RSS) in western Nagpur city early on Thursday. Police said the attackers belonged to an unspecified Islamic group. The RSS is the ideological fountainhead of various Hindu groups including the main opposition Bharatiya Janata Party. Police officials told the BBC that the police intercepted the militants, who were armed with hand grenades and assault rifles, near the RSS headquarters in Maharashtra state at 0400 on Thursday. Two policemen were also injured in the five-minute-long gun battle.

Potential target
Officials said the men, who were dressed in police uniform, came in a car and fired upon the policemen who stopped them for questioning outside the organisation's headquarters. Nagpur police chief SDS Yadav said that security was tight at the RSS headquarters as it had always been a potential target for militants. Security at all RSS offices in the country has been tightened after the incident, the BBC's Zubair Ahmed reports from Mumbai. "We will be cautious. We have asked RSS offices all over the country to be on guard," RSS spokesman Ram Madhav said. The 81-year-old RSS is India's oldest Hindu nationalist organisation with an estimated 1.3 million members. The organisation came into existence in 1925 in Nagpur with an avowed objective to make India a Hindu nation. Some RSS members take part in military drills and exercises - a guiding principle of the organisation is that India should be Hinduised and militarised. Critics of the organisation say that its hardline ideology is based on intolerance towards religious minorities. Mahatma Gandhi was assassinated in 1948 by a militant Hindu who had once been an RSS member.

N Korea reactor project abandoned BBC News
An international consortium set up to build nuclear power plants for North Korea has abandoned the project. The Kedo group said it decided to act because of Pyongyang's "continued failure" to co-operate with efforts to give up its nuclear weapons programme. It demanded compensation from the state for the millions of dollars already spent on the $4.6bn (£2.5bn) project. The scheme began in 1994 as part of a deal that aimed to prevent Pyongyang developing nuclear weapons. It envisaged the construction of two nuclear plants in North Korea in exchange for UN inspections of the country's atomic sites. Kedo's (Korean Peninsular Energy Development Organisation) executive board includes directors from the US, the European Union, South Korea and Japan.

Stalled talks
"Effective 31 May 2006, Kedo's executive board formally decided to terminate the light-water reactor (LWR) project," the consortium said in a short statement. It said the decision was taken "based on the continued and extended failure" of North Korea to co-operate with international efforts to induce it to give up its nuclear weapons programme. The statement also said that "Kedo requires payment... for financial losses in connection with the LWR project". The project was suspended in 2002 after the US accused North Korea of reneging on its part of the pact by allegedly launching an illegal programme to enrich uranium for weapons' production last year. Last September, Pyongyang agreed to give up its nuclear ambitions in return for aid and security guarantees. But multinational talks about implementing that agreement broke down in November.

http://www.aim.org/media_monitor_print/4610_0_2_0/


Christians Under Siege in Kosovo
By Cliff Kincaid | June 1, 2006
There is no question about the reason for the destruction.

While the U.S. fights Muslim terrorists in Afghanistan and Iraq, the U.S. and the United Nations are helping allies of Muslim terrorists come to power in Kosovo, a province of Serbia. This is a foreign policy disaster in the making that you should hope and pray gets some immediate attention from the media. To illustrate the dimensions of the problem, Father Keith Roderick of Christian Solidarity International has testified that Albanian Muslims in Kosovo have been systematically destroying Christian churches and other sites in Kosovo and the Serbian Christian population in the province is being "squeezed down to oblivion." The evidence is on display in a new DVD, "Days Made Of Fear," directed, produced and distributed by Ninoslav Randjelovic.

At the same time, Father Roderick also says that hundreds of new Mosques have been built in Kosovo over the last several years, financed mostly by Gulf Arab money.

The excellent DVD consists of 8 different films, but the most explosive is "Notes About the Rock," on the destroyed and vandalized churches and monasteries in Kosovo. Many of the scenes captured on film are considered the only video documentation on this subject available.

There is no question about the reason for the destruction. The churches were targeted by the Kosovo Liberation Army (KLA), also known by the acronym UCK. These initials are visible on the ruins, like a calling card. They openly advertise their anti-Christian Jihad, but our media pay no attention.

Writing for the Byzantine Cultural Project and reviewing the DVD, Theodoros Georgiou Karakostas comments, "The footage of ravaged and destroyed Serbian Churches and Monasteries is appalling. The DVD is a shocking affirmation that the American television Networks such as CNN, FOX, ABC, CBS, NBC, and the others are all lined up with the foreign policy establishment and are active practitioners of official censorship. I cannot recall seeing any of the horrifying footage on this DVD on American television."

He adds, "The same U.S. media which continues to attack the Bush administration for lying about the Iraq war, continues to give Bill Clinton, Madeleine Albright, Richard Holbrooke, Wesley Clark, and Samuel Berger a pass for their destructive war on Yugoslavia. We should remember also that at the last Democratic National Convention in Boston two years ago, one of the top KLA men was an honored guest of John Kerry.

"The same U.S. media which was appalled by the Taliban's destruction of the 2,000-year-old Buddhist statues has nothing to say about the remarkable Serbian Orthodox churches and monasteries which have stood since the period preceding the Ottoman conquests, and which are being systematically destroyed."

Why are the media ignoring what is happening in Kosovo?

One reason, as explained in the book, Media Cleansing: Dirty Reporting, is that the media reported the war wrong and now refuse to report who has really been victimized by it. Another factor is that the much-vilified neoconservatives got Kosovo wrong, too. As I noted in a Media Monitor, "In 1999 the neocons supported the NATO war on Yugoslavia launched by President Clinton. That benefited a Muslim terrorist group, the Kosovo Liberation Army (KLA), with links to Osama bin Laden." The neocons thought they were supporting a tougher and a new NATO.

To compound this tragedy, the Bush Administration has continued the misguided Clinton policy on Kosovo.

Let's remember that Clinton ordered U.S. military intervention in the Balkans against the Christian Serbs on the grounds that "ethnic cleansing" and even "genocide" were being waged against Serbia's neighbors. Most of that was hokum. Serbia, a U.S. ally in World War II, was being ruled by the communist Slobodan Milosevic, who was desperate to hold on to power in the former Yugoslavia, which included Serbia. While Milosevic was a problem, the Clinton "solution" made the problem worse. Clinton gave the green light to military aggression against the Serbs and even ordered the CIA to provide support to the Kosovo Liberation Army, which was allied with Osama bin Laden and radical Islamists. The U.S. bombed Serbia and forced Milosevic, who was later turned over to a U.N. court, to capitulate. Milosevic recently died in a U.N. prison.

Kosovo, like the American southwest, has been deluged by outsiders, who now want political power. In Kosovo they are Albanian Muslims, many of them illegal aliens from neighboring Albania. They want, with U.S. and U.N. support, to turn Kosovo into an independent Muslim state. The Bush Administration should stop-not accelerate-this madness.

If the Albanian Muslims succeed in taking over a province of Serbia, with U.S. and U.N. support, and establishing their own independent and sovereign state, then why should Mexicans balk at taking over the U.S. southwest? They must figure, with good reason, that the U.N. can be counted on to help them.

The cover-up of the persecution of Christians in Kosovo is another scandal for the media. It shows that when they agree with the Bush foreign policy, which in this case involves the establishment of a Muslim state in Europe and is a continuation of the Clinton foreign policy, they will utter NOT one word of criticism.

http://americas.irc-online.org/am/3290




After Bolivia's Gas Nationalization—Toward a New Regional Map
Raúl Zibechi | May 30, 2006

Translated from: “Despues de la nacionalización en Bolivia—Hacia un nuevo mapa regional”
Translated by: Nick Henry, IRC




Americas Program, International Relations Center (IRC) americas.irc-online.org


In a single sweep of the pen, Bolivian President Evo Morales has rearranged the continent's entire geopolitical map. The May 1st decision to nationalize hydrocarbons placed South America's second largest gas reserves under state control. Oil and gas are powerful weapons, capable of reshaping South American alliances, as evidenced by the close relationship between Venezuela and Bolivia—the continent's largest reserve holders in both sectors—who have taken the political initiative and displaced the primary regional powers.

In reality, Evo Morales had little choice. Either he nationalized his country's natural resources, or his administration faced getting caught on a one-way street to serious political crisis—the same path his predecessors Gonzalo Sánchez de Lozada and Carlos Mesa found themselves on before popular pressure forced them both to step down over the issue of nationalization. The people of South America's poorest country understand that it is the last strategic resource for keeping afloat their national project.

The result is that previous alignments have been strained as new power relationships begin to form. Carlos Alvarez, President of the Permanent Commission of Mercosur, notes that it is necessary to analyze the regional map with caution because “it is reformulating.”1 In effect, Mercosur is in crisis, the FTAA cannot break its deadlock, the Andean Community is rupturing, and the South American Community of Nations (SACN) is not advancing.

Amidst the ruins of former integration initiatives, new initiatives have grown that have yet to be fully consolidated. Although many contradictions and regional conflicts have arisen, which is characteristic of periods marked by abrupt change, it seems clear that the new regional map will look very different from past decades, and present a sharp break from the one laid out by the Washington Consensus.

Mar del Plata Initiates the Change
In November of 2005, the failure of the FTAA was sealed during the Presidential Summit at Mar del Plata. At the summit, the four member countries of Mercosur (Argentina, Brazil, Paraguay, and Uruguay) joined by Venezuela acted in unison and rejected the proposal of George W. Bush.

The failure of the FTAA accelerated events that were already unfolding. Mercosur was having difficulty navigating the always-tense relations between Argentina and Brazil, and all indicators pointed to increased difficulties with the incorporation of Venezuela (finalized in 2005) and possibly other countries. At the same time, the South American Community created by Brazil in 2004 offered a potential alternative in the face of the imminent collapse of a Mercosur that seemed unable to accommodate all the nations of the region.

After the Mar del Plata Summit, a series of acts occurred in what became a very dense month of April, replete with reunions and extraordinary events. On the one hand, the United States stepped up its offensive to sign free trade agreements with Andean countries, and as a consequence Colombia and Peru joined the free trade agreement signed by Chile in the 1990s, although their parliaments have yet to approve the measures. The tense electoral process in Peru—the result of which remains uncertain—could complicate the process of finalizing the agreement. In January, Evo Morales assumed the presidency and began a process of reforms that is being closely followed by the region's most powerful countries, in particular Brazil, Argentina, and Venezuela. At the same time, Ecuador's free trade agreement has been stymied by the powerful indigenous uprising in March. The uprising accomplished its main goal—the rejection of the free trade agreement—in a country where the political situation is being managed by a weak transitional government until the next presidential elections.

By December, the crisis in Mercosur had become critical. While Argentina and Brazil continued to tighten their alliance and seek ways to resolve the deep commercial and economic asymmetries between them, the construction of two large paper mills on the eastern coast of the Uruguay River has strained relations between Néstor Kirchner and Tabaré Vázquez. Massive grassroots mobilizations on the Argentine side of the river that block the international bridge and impede traffic have intensified the conflict and further distanced Uruguay from Mercosur.

While relations between Buenos Aires and Brasilia are visibly improving, tension is surfacing with some of the smaller member countries (Paraguay and Uruguay). These nations assert that the regional heavyweights are not giving due consideration to their interests. In this scenario, Hugo Chavez is spearheading his own plans for integration. He proposed the construction of an enormous gas pipeline, called the Southern Gasoduct that would unite Venezuela and Argentina by passing through Brazil. The project would cover over 10,000 kilometers and cost some $23 billion.

The geopolitical landscape until the month of March could be drawn, as Argentina analyst Julio Godio maintains, as two conflicting scenarios: the advance of the free trade agreements, which set up a “situation of balkanization,” and the growing alliance between what he calls “a neo-developmentalist current” composed by Argentina, Brazil, and Venezuela.2

Also during the key month of April, Venezuela's president decided to abandon the Andean Community due to Peru and Colombia's trade alliances with the United States. Chavez then began to actively support the Peruvian nationalist candidate Ollanta Humala in that country's presidential elections—a move that provoked confrontations with President Alejandro Toledo and opposing candidate Alan Garcia.

In this situation, the Venezuelan president made a risky move. On the 19th, he took part in the meeting held in Asuncion with Bolivia, Paraguay, and Uruguay and, at the Uruguayan president's request, proposed an alternative design for the Southern Gasoduct that would bypass Argentina. The fact that Venezuela is an oil exporter and the principal financier of the pipeline gives Chavez great weight. The reaction of Argentina and Brazil was immediate: they convened a meeting for April 26th in San Pablo, at which Luiz Inacio Lula da Silva and Kirchner first met alone, and then with Chavez. Just a few days prior to this meeting, Venezuela, Bolivia, and Cuba had signed the People's Trade Treaty, which sealed the new regional alliance. During the meeting in San Pablo, Lula and Kirchner reproached Chavez for his interference in the affairs of the Southern Cone, the former claiming that he was inciting Bolivia against the Brazilian oil company Petrobras, and the latter arguing that he should not support the demands of the smaller countries against the larger ones. The meeting ended with an important advance in the construction schedule of the Southern Gasoduct, and everyone went home satisfied.

After the May 1st decree to nationalize Bolivian gas, Lula met with Kirchner, Chavez, and Morales on May 4th in Puerto Iguazu, Argentina to discuss energy security in South America.

Consequences of Evo's Decision
The larger countries of the region have some serious energy problems. Argentina was, until recently, a self-sufficient country and exporter of oil and gas. However, the privatization of the state-owned energy company during the early 1990s led to a drop in oil and gas prospecting so that reserves declined dramatically. In 1989, when privatization of the sector began, reserves were estimated at 14 years for oil and 37 for natural gas. By 2004, they had fallen to nine and ten respectively, and 25% of the annual extraction of oil and 15% of natural gas is still exported.3 The result is that Argentina will have to begin importing its hydrocarbons in the near future, thus passing from a state of self-sufficiency to one of dependence.

Brazil recently accomplished oil self-sufficiency, but it imports half of its natural gas from Bolivia. A major portion of that goes toward powering industry in San Pablo—the economic and political heart of the country, where 40% of the GDP is concentrated. But oil self-sufficiency is no guarantee: neoliberalism privatized a good portion of the state-owned energy company to the point that 60% of the shares of Petrobras no longer belong to the state but to private capital from the United States or their front organizations.4 In Brazil, an intense debate is taking place over whether the country should continue selling bids on oil reserves to foreign companies that export it, or “save” it for the hard times to come, as the United States and China are doing.5

In a way, the large countries in the region depend on poor countries like Bolivia and middle countries like Venezuela to meet their energy needs. The flip side of the partial privatization of Petrobras is that the company has embarked on a race to acquire the continent's hydrocarbon reserves, with special attention to Bolivia (where it controls 20% of the GDP), Argentina (where it controls 15% of the fuel market), and Ecuador (where it faces serious problems with the indigenous communities). Petrobras's actions have created complications for Brazil across the region and worked against regional integration by promoting competition instead of collaboration between countries.

The reaction of Brazil and Argentina to the Bolivian gas nationalization demonstrated their dependence on this source. In the short term, the price they pay for gas will go up. Argentina is assured natural gas supply from Bolivia, but now at a higher price. Argentina also urgently needs the Southern Gasoduct to diminish its oil dependency.

Brazil's situation is different. Petrobras will lose control of reserves in the Andean country. The powerful business community of San Pablo has balked at paying more for Bolivian gas, and Petrobras's shareholders stand to lose out if the business is forced to absorb rising costs , as Lula announced it would.6 Bolivia sells between 27 and 30 million cubic meters of natural gas a day to Brazil at a price of $3.2 to $3.4 per million BTUs (British Thermal Units), and between 4.5 and 7 million cubic meters of natural gas a day to Argentina at a price of $3.18 per million BTUs, whereas the multinational corporation British Gas sells natural gas to Chile at a price of $7 per million BTUs. If Bolivia raises its price by one dollar, it stands to gain $300 million.

The most heavily affected country, Brazil, has looked on with discomfort as Hugo Chavez has carved out a leadership role in the region. Lula did not hide his displeasure with Chavez and Minister of Foreign Affairs Celso Amorim issued warnings that Chavez's attitude endangered the Southern Gasoduct project and regional integration.7 As one analyst points out, Chavez “becomes the key, predominant figure of political affairs in Bolivia.”8 For the Venezuelan government, the situation has been win-win: Chavez consolidated a new ally in the region, affirmed his political initiative, and placed Brazil in the difficult position of having to take backstage to Evo Morales in the international arena while at home the media and public opinion have hounded the government to take a harder line on its position with Bolivia.

Moreover, the Bolivian president fiercely attacked Petrobras when he claimed the company has operated “illegally” and is now “blackmailing” his country.9 For its part, Petrobras feels the necessity to protect the interests of its private investors, and has threatened to take the case to New York courts and stop investing in Bolivia.

All of this serves to aggravate the conflicts of interest between countries that have been working side by side for regional integration to create a common front in the face of the FTAA. On that point, Petrobras is in the eye of the storm. It's the second most important company in the region and generates huge revenues: in the first trimester of this year it registered a liquid profit of $3 billion, 33% higher than in 2005.10 The company behaves as any other transnational oil company would. Since the Brazilian state only has partial control over decisions, major conflicts crop up between the interests of Petrobras (ultimately defined on the New York Stock Exchange) and the interests of the Brazilian state.

An Uncertain Landscape
In the context of the huge changes taking place, it is difficult to predict the path the region will take. The free trade agreements with the United States are making headway, but they also face serious difficulties. A good example is what is taking place with Bolivian soy producers. Bolivia exports half a million tons of soy beans to Colombia, for $160 million annually. By signing on to a free trade agreement, Colombia must now import all of its soy from the United States, where farmers receive substantial government subsidies.11 Logically, Bolivian producers have strengthened alliances with opponents of the free trade agreements, like President Evo Morales, which has facilitated the formation of large fronts in opposition to the policies of Washington. “The wave of conflicts in Ecuador, Peru, and Colombia due to the free trade agreements with the United States, the closure of the Bolivian soy market, and the ensuing crisis of the South American Community, are the first economic and social impacts to be felt as a result of the trade agreement between the Andean countries and the United States, whose consequences in the medium-term are still hard to predict.”12

Opponents of this type of vertical integration, namely those who attended the Mar del Plata alternative summit to bring down the FTAA, do not have a unified project; rather, they are aligning themselves in two separate—some might even say opposing—camps. On the government side, there is a new alignment between Bolivia, Cuba, and Venezuela, based on coinciding ideologies, including rejection of U.S. policies, as well as various proposals like Hugo Chavez's Bolivarian Alternative (ALBA, by its Spanish initials), which has failed thus far to win over the main countries of the continent.

In that sense, the recent Bolivian initiative of the People's Trade Treaty signed in Havana is a novelty. It is based on a proposal by Evo Morales to design an alternative form of trade that assures a market for small producers, artisans, microbusiness-owners, cooperatives, and community-run businesses. Once in place, however, the project will—apart from its good intentions—have little impact on the regional situation.

On the other hand, Bolivia's nationalization of hydrocarbons could influence other countries in the region like Ecuador, where elections will be held in October and the government recently canceled its contract with the U.S. oil company OXY. Ecuador has been exporting oil for decades but has no refineries of its own, and consequently must import its gasoline and diesel fuel. The Bolivian project to industrialize gas could serve as a model for the region, and other countries may follow suit.

In any case, this sector's strongest agenda has been to promote the construction of the Southern Gasoduct, which faces a difficult road since it is more a political than economic initiative. The Bolivian Secretary of Hydrocarbons, Andres Soliz Rada, made it known he aims to build the pipeline with state-owned companies: “Here there is a problem for Brazil, since Petrobras gave up 60% of its shares to the private sector. The State has shares with special privileges, but the transnationals also hold weight with Petrobras. In order for the process to take place, we need Petrobras to be transparent about its relationship with foreign companies. We conceive of the Southern Gasoduct as an alliance just between state businesses.”13

This is precisely the key aspect of integration and the new regional map that is being drawn out. If things were left purely to the momentum of economic forces—the so-called logic of the market that is nothing more than the logic of the transnationals—the result would be a type of integration that would continue producing marginalization and poverty in every country and accentuating the inequalities between rich countries and poor countries. The key is the attitude Brazil adopts. If Lula gets reelected in the October elections, new possibilities arise to initiate a process in which political considerations take precedence over economic ones. Something like this is already taking place in Europe where, in order to make viable the formation of the European Union, powerful countries like Germany and France “help” the poorer countries offset asymmetries by specializing in the production of capital goods while opening their markets up to the consumer goods and raw materials of other members. As long as the powerful countries continue to scam the poorer countries and major inequalities persist, there can be no democratic integration.

With that in mind, during the neoliberal decade of the ‘90s “Petrobras embarked on a race to obtain as many reserves as possible and diversify its activities, thus positioning itself for the future.”14 If energy integration becomes the driving force behind redesigning the regional map, the logic of the market, which disdains the sovereignty of the state, will not take root. For this reason, the continent's large countries responsible for leading the process must look beyond the narrow scope of national ambitions. Thus far, Brazil has leaned on Mercosur in the South American region as a way to become a global player. It is an understandable goal, perhaps even beneficial since it has strengthened multilateralism, but limited because it causes conflicts in a region that feels used and disrespected, as evidenced by the tension it has with various countries.

In the coming months, the new regional map is bound to take a more definite shape as elections results come in for Peru and Ecuador, but also Nicaragua and Mexico. Stopping the FTAA was a tremendous feat, accomplished in part by governments and in part by social movements. But it is not enough. To prevent free trade agreements from advancing, it is indispensable to design and launch forms of integration that come from the people and not the markets. Perhaps the first test, following Bolivia's gas nationalization, will be the course of the Southern Gasoduct. If successfully constructed, it will serve as a good thermometer for measuring what type of integration lies ahead.

Endnotes
Página 12, May 12, 2006.
Julio Godio, “Las tensiones en el Mercosur y el rediseño del mapa sudamericano,” May 20, 2006, at www.alainet.org.
Félix Herrero, “Sed de petróleo y gas en el futuro inmediato,” Le Monde Diplomatique, Buenos Aires, April 2006.
According to a recent report by O Globo, Petrobras's share capital is composed as follows: common shares (the only ones with a right to vote): federal government 55.7%, National Economic and Social Bank (BNDES) 1.9%, foreign-owned 30.3%, FGTS (a worker-social fund) 4.6%, others 5.5%. The total capital (sum of the shares with and without a vote): federal government 32.2%, BNDES 7.6%, foreign-owed 39.8%, FGTS 2.7%, others 17.7%
Carlos Lessa, “Petrobrás, soberanía e geopolítica,” Valor Económico, Rio de Janeiro, May 10