Brazil & Southern Cone - April 2009 (ISSN 1741-4431)

He waited more than seven months but in late March Paraguay's President Fernando Lugo received his first foreign head of state since his investiture on 15 August last year. Ecuador's President Rafael Correa conducted a two-day visit to Paraguay. He was effusive in his praise of Lugo, who he described as an honorary Ecuadorean for his past work on liberation theology programmes in Ecuador's Andean highlands. Correa will have irked Brazil by expressing his support for Paraguay's demand to revise the terms of its Itaipú hydroelectric dam contract, even speaking for Brazil's President Lula da Silva.

Correa said that Paraguay had every right to seek to change the Itaipú contract with Brazil, one of Lugo's main campaign promises. He added that he had discussed the matter “tangentially" with Lula, who had told him that he was “quite open to all these revisions". The official line from Brasí­lia is that the terms of the contract are not up for discussion.

His indiscreet comments on Itaipú and some token bilateral agreements apart, Correa made clear that the purpose of his visit to Paraguay was to deepen Latin American integration. He discussed the drift leftwards in Latin America and insisted that there had never been a better time to deepen regional integration, “break out of the neoliberal mould and replace it with a new system based on cooperation and social solidarity."

In particular, Correa mentioned the Banco del Sur, a regional bank which has failed to get off the ground two years after its inception, and the (remote) possibility of a regional common currency. Correa has denied that he intends to reverse dollarisation in Ecuador but equally he has made his dissatisfaction with the currency, because it precludes monetary policy changes, very clear.

• Chávez
  Venezuela's President Hugo Chávez will personally appeal to Paraguayan senators to approve Venezuela's entry into Mercosur, according to Paraguay's foreign minister Alejandro Hamed. He did not say whether Chávez intended to visit Paraguay or to phone. “We are losing money leaving Venezuela outside Mercosur," Hamed said, “because it has a huge market for our products." The bill to welcome Venezuela into Mercosur has been mired in congress since August 2007. Indeed, it has not made it beyond the senate foreign relations committee. The opposition Partido Colorado heads a narrow majority in the senate (28 out of 45) which objects strenuously to Venezuela's inclusion on the grounds that Chávez is a “dictator".