Colombia – under its first-ever leftist president, ex-guerrilla member Gustavo Petro – revived a longtime far-left hope of creating a unified South American currency to defy the U.S. dollar, the online journal Diario Las Américas reported on Thursday.
Petro and far-left Chilean President Gabriel Boric – Petro’s first head of state visitor as president – reportedly discussed the possibility of replacing their struggling state currencies, two separate peso units, with a unified currency backed by multiple governments on the continent. Boric expressed restrained enthusiasm, calling the process “complex” but not publicly dismissing it.
Socialists in South America have for decades suggested a euro-style South American monetary unit that used the collective economic strength of the continent to replace their weakened units. Some Western Hemisphere currencies have become so weak in light of the global economic decline fueled by Chinese coronavirus lockdowns that countries have sought alternatives. Socialist Venezuela has informally adopted the U.S. dollar, for example; El Salvador has formally adopted both the U.S. dollar and Bitcoin. The U.S. dollar has been the official currency of Ecuador for over 20 years.
Gabriel Boric, Chile’s president, left, and Gustavo Petro, Colombia’s president, hold a joint press conference at the Presidential Palace in Bogota, Colombia, on Monday, Aug. 8, 2022. Petro began his four year term Monday by holding meetings with Chile’s Boric and with representatives of Mexico, Cuba and the United States. Photographer: Nathalia Angarita/Bloomberg
Any attempt to create a South American currency will require more victories in upcoming presidential elections in the region. Socialism is ascendant on the continent after a decade of conservative advances was largely crushed by mismanagement of the Chinese coronavirus crisis. In addition to Petro’s victory in Colombia, making him the first left-wing president in the history of the country, and Boric’s in Chile in late 2021, Peru, Bolivia, Argentina, Venezuela, Cuba, Honduras, Nicaragua, are currently under leftist regimes. In October, Brazilians will head to the polls to choose between incumbent conservative Jair Bolsonaro and far-left socialist Luiz Inácio Lula da Silva, who most recently raised the idea of a unified currency this year.
Discussion of such a currency began in Colombia after the nation’s Senate President Roy Barreras suggested that a “unified coin” would be one of Petro’s presidential projects.
“There is a nation with a disposition to be reborn here so that, hand in hand with other Latin American nations, we decide to share a common destiny, a sole agenda … a Latin American parliament, hopefully one currency, and above all one dignified voice,” Diario Las Américas quoted Barreras as saying.
Colombian President of the Congress Roy Barreras is seen before the inauguration ceremony of Colombia’s president-elect Gustavo Petro at the Bolivar square in Bogota, on August 7, 2022. – Ex-guerrilla and former mayor Gustavo Petro will be sworn in as Colombia’s first-ever leftist president, with plans for profound reforms in a country beset by economic inequality and drug violence. (Photo by JUAN BARRETO / AFP) (Photo by JUAN BARRETO/AFP via Getty Images)
Asked about the currency proposal, Boric offered a positive, but vague, reply.
“To me, every instance and initiative for regional integration that strengthens cooperation between our countries seems to us to point in a good direction,” Boric reportedly said. He nonetheless described the creation of a unified currency as “very complex.”
“In the European case, if I recall correctly, they did away with coal and steel economic unity in 1951 and they established a unified currency in 2002,” Boric said. “So these are long-term processes and we have lot of progress to make beforehand.”
Boric also reportedly celebrated the many leftist presidential victories in the region generally, saying, “I am infinitely contented to see how the Latin American heart begins to beat together.”
In neighboring Brazil, South America’s largest economy, current presidential frontrunner Lula da Silva proposed the creation of a unified currency for the continent called the “sur” in remarks in May. Lula served as president of Brazil for most of the 2000s and was convicted and sentenced to over two decades in prison on charges of misappropriating state funds to buy a luxury beachfront property. The leftist-controlled Supreme Federal Tribunal, the highest court in the country, overturned the conviction, allowing him to run against Bolsonaro.
“We are going to restore our relationship with Latin America. God willing, we will create a Latin American currency,” Lula said in May. “We don’t have to depend on the dollar.”
Lula, a staunch supporter of the leftist Vladimir Putin regime in Russia, appeared to support the departure from dependency on the dollar in the context of American and European sanctions on Russia meant to pressure it out of continuing its eight-year-old invasion of Ukraine.
TOPSHOT – Brazilian presidential pre-candidate for the leftist Workers Party (PT) and former President (2003-2010), Luiz Inacio Lula da Silva (R) and Colombian elected vice-president Francia Marquez gesture during a meeting with other members of the PT at the Fundação Perseu Abramo in Sao Paulo, Brazil, on July 26, 2022. (Photo by Nelson ALMEIDA / AFP) (Photo by NELSON ALMEIDA/AFP via Getty Images)
Fernando Haddad, the socialist Workers’ Party (PT) candidate that lost to Bolsonaro after replacing Lula in the 2018 presidential election, wrote a column shortly before Lula’s pronouncement on the “sur” in the left-wing Folha de Sao Paulo newspaper arguing that sanctions on Russia proved the need for a South American currency.
“The recent conflict between Russia and Ukraine has rekindled old fears that had died down at the end of the Cold War. The possibility of a war involving nuclear powers continues to threaten human existence, and the disrespect for national sovereignty haunts states that do not have the same war power,” Haddad and his fellow author, former president of the Banco Fator Gabriel Galipolo, wrote. “The use of currency power at the international level renews the debate about its relationship with sovereignty and the capacity for self-determination of peoples, especially for countries with currencies considered non-convertible.”
The authors did not address the fact that eliminating national currencies inherently erodes the sovereignty of those countries, as they now depend on other nations for the value of their coin.
“The creation of a South American currency is a strategy to accelerate the process of regional integration,” the column asserted, “it is a fundamental step on the road towards the strengthening of sovereignty and regional governance.”
Diario Las Américas noted that the idea first made its debut within the current socialist South American framework at a summit of the Bolivarian Alliance of the Americas (ALBA), a Venezuela-led alternative to the Organization of American States (OAS), which technically requires its members to be democracies. Under dictator Hugo Chávez, Venezuela and other leftists in the ALBA coalition proposed the “sucre” as a South American currency to replace the U.S. dollar, but the idea never materialized into a useable product.