The deterioration of the small Mediterranean country's status benefits Hezbollah and its patron saint, Iran.

With four different prime ministers so far this year, it is difficult to escape the vicious circle in which Lebanon finds itself, so that the continuity of the current political system and the severe financial crisis seem inevitable. From this perpetuation emerge some possibilities, almost all of them bleak, for Lebanon's future. Here are some of these scenarios.

State of the port of Beirut after the explosion on 4 August 2020 [Mehr News Agency/Wikipedia].

article / Salvador Sánchez Tapia

To say that the Lebanese political system is dysfunctional is nothing new. development Based on a sectarian balance of power established in 1989 after a long civil war, it perpetuates the existence of clientelistic networks, encourages corruption, hampers the country's economic development and hinders the creation of a transversal Lebanese national identity that transcends religious confessions.

For some time now, Lebanon has been immersed in an economic and social crisis of such magnitude that many analysts are wondering whether we are facing a new case of state failure. In October 2019, the country was rocked by a wave of demonstrations that the government itself considered unprecedented, triggered by the executive's advertisement attempt to tackle the serious economic crisis with several unpopular measures, including a tax on the use of the popular Whatsapp application. The protests, initially focused on this issue, soon incorporated complaints against rampant corruption, the uncontrolled increase in the cost of living, and the lack of employment and opportunities in the country.

Popular pressure forced the resignation of the unity government led by Saad Hariri later that month. The government was replaced in January 2020 by a more technical profile government led by former Education minister Hassan Diab. The new government had little room for reform before the coronavirus pandemic was declared, and soon found itself beset by the same street pressure that had toppled the previous government, with demonstrations continuing despite the restrictions imposed by the pandemic.

The devastating explosion in early August 2020 in the port of Beirut only further plunged the country into the downward spiral in which it was already mired. Despite voices that tried to see the hand of Israel or Hezbollah behind the catastrophe that took the lives of 163 people, the Lebanese population soon realised that this was merely the logical consequence of years of corruption, bureaucratic sloppiness and withdrawal of the national infrastructure. Again there was a crescendo of popular outrage; again the government was forced to resign at plenary session of the Executive Council.

With echoes of the explosion still lingering, at the end of August Mustafa Adib, Lebanon's former ambassador to Germany, was tasked by President Aoun to form a government. Unable to complete the arduous task, not least because of Hezbollah's insistence on controlling the Finance Ministry, Adib resigned on 26 September, leaving the country on the brink of the precipice it still finds itself on.

It is difficult to predict Lebanon's future, beyond predicting that it looks bleak, as a complex dynamic of internal and external forces grips the country. Despite the pressure, at least from urbanised and cosmopolitan Beirut, to end it, it is enormously complex to untangle the tangled web of clientelistic networks that have controlled the country since independence, not only because of the benefits it has generated for a small privileged group , but also because many fear the alternatives to a model that, for all its faults, has avoided a repeat of the savage civil war that took place between 1975 and 1990.

Its geographic status makes it difficult for Lebanon to escape the general climate of instability in the Middle East and the influence exerted on the country by regional and international actors such as Israel, Iran, Syria and France, especially considering that the problems of the Levant are so deep and its national leadership so weak that it does not seem to be able to overcome them on its own.

Lebanon's plight is that its own sectarian division makes it difficult for nations to emerge that are willing to donate on a cross-cutting basis to help bridge the divide that divides the country internally, and that the financial aid it may receive from actors such as Iran or Saudi Arabia only reinforces it. The efforts of French President Emmanuel Macron, self-appointed as the driving force behind Lebanese reconstruction, do not seem, for the moment, to be gaining momentum. At the donors' lecture he convened on 9 July with fifteen heads of state, he secured contributions worth $250 million to revitalise Lebanon's moribund Economics . Meanwhile, Beirut's mayor estimates the reconstruction costs of the August explosion in the capital's port at between $3 billion and $5 billion.

As a mirror image of this difficulty, Lebanese communities, comfortably ensconced in the status quo, reject an undoubtedly necessary financial aid if they feel it might be detrimental to their respective power instructions . Hezbollah, for example, does not accept IMF programmes, complicating the achievement of the necessary national consensus that would facilitate IMF support. It is difficult to escape this vicious circle, so that the continuation of the current political system, and with it the continuation of Lebanon's severe financial crisis, seems inevitable. From this perpetuation come some possibilities, almost all of them bleak, for the Lebanese future. The first is that Lebanon will continue to slide down the inclined plane that is turning it into a failed state, and that this condition will eventually lead to a civil war precipitated by events similar to those that occurred during the Arab Spring in other states in the region. Such an eventuality would resurrect the ghosts of the past, produce regional instability that is difficult to measure but which would undoubtedly provoke intervention by regional and international actors, and could ultimately dismember the country, result which would only sow the seeds of further instability throughout the region.

Without going to that extreme, the internal turmoil could break the precarious balance of power on which Lebanese political life is based, to the benefit of one of its sectarian groups. Hezbollah, the undisputed leader of the country's Shia faction, appears here as the most organised and strongest group within the country and, therefore, as the one that stands to gain the most from this breakdown. It should be borne in mind that, in addition to the support of internship all 27 percent of Lebanese Shiites, the militia organisation is viewed favourably by many members of the divided Christian community - some 45 percent of the country's population - who put their desire for an internal Security Service in the country before other considerations. Aware of this, Hezbollah's leader Hasan Nasrallah is sample moderate in his proposals, seeing the Sunni community, supported by Saudi Arabia, as his real rival, and seeking to broaden his power base.

Iran would undoubtedly be the real winner in this scenario, as it seems unrealistic to think of a Hezbollah that, once it has come of age, would have a life of its own outside the ayatollahs' regime. With this new piece, Tehran would complete the Shia arc that connects Iran with Iraq and, through Syria, with the Eastern Mediterranean. The destabilising effects of such a move status, however, cannot be underestimated if one considers that the mere possibility of the Islamic Republic of Iran taking full control of Lebanon constitutes a casus belli for Israel.

In a positive grade , the serious crisis the country is going through and the strong popular pressure, at least in urban areas, may, paradoxically, be a spur to overcome the sectarian system that has contributed so much to generate this status. However, such a transition only stands a chance of progress - however tenuous - with strong external wholesale support.

In this scenario, the role of the international community should not be limited to providing economic resources to prevent the country's collapse. Its involvement must favour the development and sustain civic-political movements with an intersecting base that are capable of replacing those who perpetuate the current system. To this end, in turn, it is imperative that contributing nations lend their financial aid vision, renouncing any attempt to shape a Lebanon to suit their respective national interests, and forcing the elites who control the factions to abdicate the status quo in favour of a true Lebanese identity. The obvious question is: is there any real chance of this happening? The reality, unfortunately, does not allow for much hope.

Armenia and Azerbaijan clash in a conflict that has also involved Turkey and Russia.

Monument to the Armenian capture of the city of Shusha in the war over Nagorno-Karabakh in the 1990s [Wikipedia].

ANALYSIS / Irene Apesteguía

The region of Nagorno-Karabakh, traditionally inhabited by Christian Armenians and Muslim Turks, is internationally recognised as part of Azerbaijan. However, its population is Armenian-majority and pro-independence. In Soviet times it became an autonomous region within the Republic of Azerbaijan and it was in the war of the 1990s that, in addition to leaving some 30,000 dead and around a million people displaced, separatist forces captured additional Azeri territory. Since the collapse of the Soviet Union in 1991, ethnic discrepancies between Azerbaijan and Armenia have deepened. Even a 2015 census of Nagorno-Karabakh reported that no Azeris lived there, whereas in Soviet times Azeris made up more than a fifth of the population. Since the truce between the two former Soviet republics in 1994, there has been a status stalemate, with the failure of several negotiations to reach a permanent peace agreement . The dispute has remained frozen ever since.

On 27 September, the conflict between Armenia and Azerbaijan once again led to a military confrontation. Recent developments go far beyond the usual clashes, with reports of helicopter shoot-downs, use of combat drones and missile attacks. In 2016 there was a violent escalation of the conflict, but Stepanakert, the capital of Nagorno-Karabakh, was not occupied and no martial law was declared. If one thing is clear, it is that the current escalation is a direct consequence of the freezing of the negotiation process. Moreover, this is the first time that armed outbreaks have occurred at such short intervals, the last escalation of the conflict having taken place last July.

Azerbaijan's Defence Minister Zakir Hasanov on 27 September threatened a "big attack" on Stepanakert if the separatists did not stop shelling its settlements. Nagorno-Karabakh declared that it would respond in a "very painful" way. Armenia, for its part, warned that the confrontation could unleash a "full-scale war in the region".

The leaders of both countries hold each other responsible for this new escalation of violence. According to Azerbaijan, the Armenian Armed Forces constantly provoked the country, firing on the army and on crowds of civilians. Moreover, on multiple local Azerbaijani television channels, President Ilham Aliyev has declared that Armenia is preparing for a new war, concentrating all its forces in Karabakh. Even the Azeri authorities have restricted internet use in the country, mainly limiting access to social media.

In its counter-offensive operation, Azerbaijan mobilised staff and tank units with the support of artillery and missile troops, front-line aviation and unmanned aerial vehicles (UAVs), the ministry's press release statement said. Moreover, according to agreement with the Syrian Observatory for Human Rights, a number of Syrians from jihadist groups, from Turkish-backed factions, are fighters in Nagorno-Karabakh. This has been corroborated by Russian and French sources. In any case, it would not be surprising when Turkey sits alongside Azerbaijan.

For its part, Armenia blames Azerbaijan for starting the fighting. Armenian officials announced that the Azerbaijani army had attacked with rocket-propelled grenade launchers and missiles. Armenia has not stopped preparing, as in the weeks leading up to the start of the fighting, multiple shipments of Russian weapons had been detected in the country via heavy transport flights. On the other hand, Armenia's defence minister has accused Turkey of exercising command and control over Azerbaijan's air operations via Boeing 737 Airborne Early Warning & Control aircraft , as Turkey has four of these planes.  

Triggers

Both powers were on alert because of the July fighting. Since then, they have not abandoned military preparedness at the hands of their external allies. The current events cannot therefore be described as coming out of the blue. After the July outbreak, there has been a lingering sense that the armed confrontation had simply been left at Fail.

Hours after the outbreak of fighting, Armenia declared martial law and general mobilisation. Azerbaijan, on the contrary, declared that such action was not necessary, but eventually the parliament decided to impose martial law in some regions of the country. Not only was martial law decreed, but also the Azerbaijani Ministry of Defence declared the liberation of seven villages, the establishment of a curfew in several cities and the recapture of many important heights. It is clear that all occupied territories have crucial strategic value: Azerbaijan has secured visual control of the Vardenis-Aghdara road, which connects to Armenian-occupied Karabakh. The road was completed by Armenia three years ago in order to facilitate rapid military cargo transfers, an indication that this is a strategic position for Armenia.

Drone warfare has also been present in the conflict with Turkish and Israeli drones used by Azerbaijan. Armenia's anti-drone measures are bringing Iran into the picture.

An important factor that may have led to the conflict has been changes in the diplomatic leadership in Baku. Elmar Mammadyarov, Azerbaijan's foreign minister, left his position during the July clashes. He has been replaced by former Education minister Jeyhun Bayramov, who does not have much diplomatic experience. Meanwhile, Hikmet Hajiyev, the Azerbaijani president's foreign policy advisor has seen his role in these areas increase.

But the problem is not so much about new appointments. For the past few years, Mammadyarov was the biggest optimist about the concessions Armenia might be willing to make under Nikol Pashinyan's new government. Indeed, since Armenia's Velvet Revolution, which brought Pashinyan to the post of prime minister in 2018, Azerbaijan had been hopeful that the conflict could be resolved. This hope was shared by many diplomats and experts in the West. Moreover, even within Armenia, Pashinyan's opponents labelled him a traitor because, they claimed, he was selling out Armenia's interests in exchange for Western money. All this hope for Armenia disappeared, as the new Armenian prime minister's position on Nagorno-Karabakh was harsher than ever. He even declared on several occasions that "Karabakh is Armenia". All this led to a strengthening of Azerbaijan's position, which hardened after the July clashes. Baku has never ruled out the use of force to try to solve the problem of its territorial integrity.

In the 2016 conflict there were many efforts to minimise these armed disturbances, mainly by Russian diplomacy. These have been supported by the West, which saw Moscow's mediation as positive. However, negotiations between Armenia and Azerbaijan have not resumed, and the excuse of the coronavirus pandemic has not been very convincing, according to domestic media.

More points have led to the current escalation, such as increased Turkish involvement. After the July clashes, Turkey and Azerbaijan conducted joint military exercises. Ankara's representatives began to talk about the ineffectiveness of the peace process, and Turkish President Recep Tayyip Erdogan, speaking last month at the UN General Assembly, described Armenia as the biggest obstacle to long-term peace deadline in the South Caucasus. This is not to say that Turkey provoked the new escalation, but it certainly helped push Azerbaijan into a more emboldened attitude. The Turkish president stated on Twitter that 'Turkey, as always, stands with all its brothers and sisters in Azerbaijan'. Moreover, last August, Azerbaijan's defence minister said that, with the Turkish army's financial aid , Azerbaijan would fulfil 'its sacred duty', which can be interpreted as the recovery of lost territories.

International importance

In a brief overview of the allies, it is worth mentioning that the Azeris are a majority ethnic Turkic population, with whom Turkey has close ties, although unlike the Turks, most Azeris are Shia Muslims. As for Armenia, Turkey has no relations with Armenia, as the former is a largely Orthodox Christian country that has historically always relied on Russia.

As soon as the hostilities began, several states and international organisations called for a ceasefire. For example, Russian Foreign Minister Sergei Lavrov, in a telephone conversation with his Armenian counterpart Zohrab Mnatsakanyan, called for an end to the fighting and declared that Moscow would continue its mediation efforts. Meanwhile, as it did after the July clashes, Turkey again expressed through various channels its plenary session of the Executive Council support for Azerbaijan. Turkey's Foreign Ministry assured that Ankara is ready to help Baku in any way it can. The Armenian president, hours before the start of the fire, mentioned that a new conflict could "affect the security and stability not only of the South Caucasus, but also of Europe". US Secretary of State Mike Pompeo expressed serious concerns and called on both sides to stop the fighting.

On the other hand, there is Iran, which is mainly Shia and also has a large ethnic Azeri community in the northwest of the country. However, it has good relations with Russia. Moreover, having borders with both countries, Iran has offered to mediate peace talks. This is the focus of Iran's current problem with the new conflict. Azeri activists called for protests in Iranian Azerbaijan, which is the national territory of Azeris under Iranian sovereignty, against Tehran's support for Armenia. The arrests carried out by the Iranian government have not prevented further protests by this social sector. This response on the streets is an important indicator of the current temperature in northwest Iran.

As for Western countries, France, which has a large Armenian community, called for a ceasefire and the start of dialogue. The US said it had contacted both sides to urge them to "cease hostilities immediately and avoid words and actions of little consequence financial aid".

Russia may have serious concerns about the resumption of full-scale hostilities. It has made it clear on multiple occasions that the important thing is to prevent the conflict from escalating. One reason for this insistence may be that the Kremlin already has open fronts in Ukraine, Syria and Libya, in addition to the current status in Belarus, and the poisoning of Alexei Navalni. Moreover, despite the current attempt by the presidents of Russia and Turkey to show that relations between their countries are going well, the discrepancies between them, such as their views on Syria and Libya, are growing and becoming more diverse. And now Vladimir Putin could not leave Armenia in the hands of Azerbaijan and Turkey.

The Minskgroup of the Organisation for Security and Cooperation in Europe (OSCE) has as its main mission statement mediation of peace negotiations between Armenia and Azerbaijan, and is co-chaired by Russia, France and the United States. In response to the current conflict, it called for a "return to a ceasefire and resumption of substantive negotiations". Earlier this year, Armenia rejected the Madrid Principles, the main conflict resolution mechanism proposed by group in Minsk. Moreover, this initiative has been made increasingly impossible by the Armenian Defence Ministry's concept of a "new war for new territories", as well as Nikol Pashinyan's idea of Armenia-Karabakh unification. All this has infuriated the Azeri government and citizens, who have increasingly criticised the Minsk group . Azerbaijan has also criticised the group 's passivity in the face of what it sees as Armenia's inflammatory actions, such as the relocation of Karabakh's capital to Susa, a city of great cultural importance for Azerbaijanis, or the illegal settlement of Lebanese and Armenians in occupied Azerbaijani territories.  

If any conclusion is to be drawn from this it is that, for many in both Azerbaijan and Armenia, the peace process has been discredited by the past three decades of failed negotiations, prompting increasing warnings that the status quo would lead to a further escalation of the conflict.

There is growing concern among some experts that Western countries do not understand the current status and the consequences that could result from the worst flare-up in the region in years. The director of the South Caucasus Office at the Heinrich Boell Foundation, Stefan Meister, has argued that the fighting between these two regions could go far. In his opinion, "the conflict is underestimated by the EU and the West".

The EU has also taken a stand. It has already order to Armenia and Azerbaijan to de-escalate cross-border tensions, urging them to stop the armed confrontation and to refrain from actions that provoke further tension, and to take steps to prevent further escalation.

The conflict in the Caucasus is of great international importance. There are regular clashes and resurgences of tensions in the area. The relevance is that any escalation of violence could destabilise the global Economics , given that the South Caucasus is a corridor for gas pipelines from the Caspian Sea to world markets, and more specifically to Europe. If Armenia decides that Azerbaijan has escalated too far, it could attack Azerbaijan's South Caucasus Pipeline, which sends gas to Turkey's TANAP, and ends with TAP, which supplies Europe. Another strategic aspect is the control of the city of Ghana'a, as controlling it could connect Russia to Karabakh. In addition, control of the site could cut off gas pipeline connectivity between Azerbaijan, Georgia and Turkey. Conflicts already took place at area last July, which is why Azerbaijan is prepared to close the region's airspace as a result of the new conflict.

In bright green, territory of Nagorno-Karabakh agreed in 1994; in soft green, territory controlled by Armenia until this summer [Furfur/Wikipedia].

A new war?

There are several possible outcomes for the current status . The most likely is a battle over small and not particularly important areas, allowing for the symbolic declaration of a "victory". The problem centres on the fact that each opponent may have a very different view of things, so that a new strand of confrontation is inevitable, raising the stakes of the conflict, and leading to less chance of understanding between the parties.

Although unlikely, many analysts do not rule out the possibility that the current escalation is part of the preparations for negotiations and is necessary to shore up diplomatic positions and increase pressure on the opponent before talks resume.

Whatever the reasoning behind the armed clashes, one thing is clear: the importance of military force in the Nagorno-Karabakh peace process is growing by the day. The absence of talks is becoming critical. If the Karabakh pendulum does not swing from generals to diplomats soon, it may become irreparable. And it will be then that the prospects of another regional war breaking out once again will cease to be a mere scenario described by experts.

While Russia continues to insist that there is no other option but a peaceful way forward, the contact line between the two sides in Nagorno-Karabakh has become the most militarised area in Europe. Many experts have repeatedly suggested as a possible scenario that Azerbaijan might decide to launch a military operation to regain its lost territory. source The country, whose main source of income is its Caspian Sea oil wealth, has spent billions of dollars on new weaponry. Moreover, it is Azerbaijan that has replaced Russia as the largest carrier of natural gas to Turkey.

A major consequence of the conflict centres on potential losses for Russia and Iran. A further casualty of the conflict may be Russia's position as Eurasia's leader. Another argument is based on the Turkish committee , which has demanded Armenia's withdrawal from Azerbaijani lands. The problem is that the members of committee, Kazakhstan and Kyrgyzstan, are also members of the Collective Security Treaty Organisation (CSTO), led by Russia together with Armenia. On the other hand, Iran sample also panics over Turkey's total solidarity with Azerbaijan, as more Azeris live in Iranian Azerbaijan than in the Republic of Azerbaijan.

This is one of the many conflicts that exemplify the new and current "style" of warfare, where major powers place themselves at the back of small conflicts. However, the territory of Nagorno-Karabakh may be small in size, but not in importance, as in addition to contributing to the continued destabilisation of the Caucasus area , it may affect neighbouring powers and even Europe. The West should give it the importance it deserves, because if it continues along the same lines, the door is open to a more violent, extensive and prolonged armed conflict.

Three visions

However, the desire to create a cooperative body within the Weimar Triangle is a real challenge challenge, as each country represents, in one way or another, one of three of the foreign policy agendas that divide Europe.

At one end of the spectrum is French Gaullism, which advocates an independent Europe and is wary of a US presence in Europe, remembering that France already has a strong military. Paris abandoned this perspective for an Atlanticist one in 2007 under Sarkozy, but it has been regained by Macron. This means that Macron's rhetoric could lead to clashes with the Americans, while he also seeks to mark profile himself against Moscow and Beijing.

In the middle is German pragmatism: Germany does not want to increase conflict and prefers to focus on its Economics. On the one hand it is negotiating with the Russians to receive gas for its industrial activity, and on the other it wants US troops to remain on its territory, as their departure would force it to increase its security expense . In Europe's plans for recovery from the Covid-19 pandemic, Germany has clearly been more absent, with Macron taking the lead.

Finally, we find Polish Atlanticism. Poland is perhaps the most Atlanticist country in the EU. Even under the Trump Administration there has been a high level of pro-Americanism among the population and the political class . The government has pushed for the hosting of a US base and Defence Minister Mariusz Błaszczak has enthusiastically praised the role of the US as a defender of the free world. This is nothing new, as the 2003 invasion of Iraq was supported by Poland in the face of French and German rejection. Poland continues to see Russia as its greatest threat and the US and NATO as guarantors of protection.

The Triangle returns

Its geographical status explains Poland's position and it will not stop wanting NATO's instructions on its territory. However, it understands that it needs close allies with greater internal stability - hence its rapprochement with Germany and France - than that offered by the Trump Administration, whose international image is badly damaged, or a United Kingdom more occupied with managing Brexit than security issues.

On the other hand, Macron wants to avoid Poland replacing the UK as the representative of US policy in Europe, so he has changed his strategy to avoid alienating it by criticising its judicial reforms. Macron did not mention them in his visit to Warsaw in February this year and only encouraged 'respect for European values'. Somehow Macron understands that after Brexit he will need Poland to advance his European foreign policy plans, and that is why it is important to bring it to the conference room helm. Macron went so far as to say in Warsaw that Poland, Germany and France should lead the Union post-Brexit. He also announced the dispatch of 600 more men to Poland, which will bring the number of French soldiers in the country to 5,100.

At meeting, both leaders agreed to meet with German Chancellor Angela Merkel, although the limitations imposed by the coronavirus pandemic have slowed down some contacts, while also waiting for Economics to begin to recover. The newly inaugurated German presidency of committee , moreover, discourages Berlin from appearing overly aligned with a certain European vector. The Weimar Triangle may therefore hibernate temporarily; in any case, although this is a risky formula, if coordinated with the Parliament and the Commission, its consolidation could represent a step forward in European cohesion and governance.

Pandemic reinforces value of production centres in the same sub-regions

Free trade zones in Central America and the Caribbean have been an important engine for the region's economies. Favoured by the increasing globalisation of recent decades, they could now be boosted by a phenomenon in the opposite direction: "glocalisation", the desirability of having production centres in the same sub-region, close to major markets, in order to avoid the problems in distant supply chains seen during this Covid-19 crisis that has affected transport and communications so much. The two leading Latin American free trade zone countries, the Dominican Republic and Costa Rica, offer affordable and sufficiently skilled labour at the doorstep of the United States.

One of the free trade zones of the Dominican Republic [CNZFE] ▲ One of the free trade zones of the Dominican Republic [CNZFE].

article / Paola Rosenberg

The so-called free trade zones, also known in some countries as free zones, are strategic areas within a national territory that have certain tax and customs benefits. In these zones, commercial and industrial activities are carried out under special export and import rules. It is a way of boosting investment and employment, as well as production and exports, thus achieving the economic development of a part of the country or of the country as a whole.

Free trade zones are important in Latin America, and in the case of the smaller economies they are the main production and export hubs. According to agreement with the association of Free Trade Zones of the Americas (AZFA), there are some 3,500 free trade zones in the world, of which 400 are in Latin America, representing 11.4% of the total. Within this region, they are particularly important in the countries of Central America and the rest of the Caribbean basin. They are particularly important in the Dominican Republic and Costa Rica, as well as in Nicaragua, El Salvador, Colombia and Uruguay (also in Puerto Rico).

These countries benefit from having abundant (especially trained in the Costa Rican case) and low-cost labour (especially in the Nicaraguan case), and this close to the United States. For manufacturers wishing to enter the US market, it may be interesting to invest in these free trade zones, taking advantage of tax benefits and labour conditions, while their production will be geographically very close to their destination.

The latter is gaining ground in a post-Covid-19 world. The trend towards sub-regionalisation, in the face of the fractured dynamics of globalisation, has been highlighted for other areas of the American continent, as in the case of the Andean Community, but it also makes a great deal of sense for greater integration between the United States and the Greater Caribbean. Insofar as the US moves towards a certain decoupling from China, the free trade zones of this geographic area may also become more relevant.

Reproduced from report graphic of the association Free Trade Zones of the Americas (AZFA), 2018

Export processing zones

Free zones can be export-oriented (external market), import substitution-oriented (internal market) or both. The former may have a high industrial component, either seeking diversification or relying on maquilas, or emphasising logistics services (in the case of Panama's free zones).

Free zones for exporting products have been particularly successful in the Dominican Republic and Costa Rica. As the AZFA indicates, of the 31,208 million dollars exported from Latin American free zones in 2018, the first place went to the Dominican Republic, with 5,695 million, and the second to Costa Rica, with 4,729 million (the third place went to Puerto Rico, with 3,000 million). Exports from the Dominican Republic's free trade zones accounted for 56% of all exports from that country; in the case of Costa Rica it was 48% (third in the ranking was Nicaragua, with 44%).

The Dominican Republic is the country with the largest issue number of free zones (71 multi-company zones) and its 665 companies generated the largest number of direct jobs (165,724). Costa Rica has 48 free zones (in third position, after Nicaragua), and its 343 companies generated 93,496 direct work jobs (in fifth position).

In terms of the profitability for the country of this economic modality , for every dollar exempted between 2010 and 2015, Costa Rica's free trade zones generated an average of 6.2 dollars and those of the Dominican Republic 5 dollars (El Salvador ranked second with 6 dollars).

As regards Costa Rica specifically, a late 2019report by the Costa Rican foreign trade promotion agency, Procomer, put the contribution of free trade zones at 7.9% of GDP, generating a total of 172,602 jobs work, both direct and indirect, with an annual growth of issue jobs averaging 10% per year between 2014 and 2018. These areas account for 12% of the country's formal private sector employment . An important fact about the contribution to development of the local Economics is that 47% of the purchases made by firms located in free trade zones were from national companies. An important social dimension is that the zones contributed 508 million dollars to the Costa Rican Social Security Fund in 2018.

The Dominican Republic's free trade zone regime is particularly applauded by the World Bank, which describes the country as a pioneer in this subject instrument of productive and commercial promotion, presenting it as "the best known success story in the western hemisphere". agreement According to the statistics of the committee National Free Trade Zones Export Zones (CNZFE), these have contributed 3.3% of GDP in recent years, thereby contributing to the significant growth of the country's Economics in recent years (one of the highest fees in the region, with an average of over 6% until the onset of the current global crisis). The geographical proximity to the United States makes its free trade zones ideal for US companies (almost 40% of investment comes from the US) or for companies from other countries that want to export to the large North American market (34% of exports go to the US).

The finding of a "significant" amount of oil in offshore wells puts the former Dutch colony in the footsteps of neighbouring Guyana.

The intuition has proved to be correct, and explorations carried out under Suriname's territorial waters, together with the successful hydrocarbon reserves that are being exploited in Guyana's maritime borders, have found abundant oil. The finding could be a decisive boost for the development of what is, after Guyana, the second poorest country in South America, but it could also be an opportunity, as with its neighbour, to accentuate the economic and political corruption that has been hindering the progress of the population.

Suriname's presidential palace in the country's capital, Paramaribo [Ian Mackenzie].

article / Álvaro de Lecea

So far this year, drilling in two offshore fields in Suriname has been positive result , confirming the existence of "significant" oil in block 58, operated by France's Total, in partnership with US-based Apache. Everything indicates that the same success could be obtained in block 52, operated by the also American ExxonMobil and the Malaysian Petronas, which were pioneers in prospecting in Surinamese waters with operations since 2016.

Both blocks adjoin the fields under the waters of neighbouring Guyana, where it is currently estimated that there are some 3.2 billion barrels of extractable oil. In the case of Suriname, exploration in the first viable field, Maka Central-1, discovered in January 2020, indicates 300 million barrels, but estimates from Sapakara West-1, discovered in April, and subsequent planned exploration, have yet to be added. It is estimated that some 15 billion barrels of oil reserves may exist in the Guyana-Suriname basin.

Until this new oil era in the Guianas (the former British and Dutch Guianas; the French Guianas remains an overseas dependency of France), Suriname was considered to have reserves of 99 million barrels, which at the current rate of exploitation left two decades to deplete. In 2016, the country produced just 16,400 barrels per day.

status political, economic and social

With just under 600,000 inhabitants, Suriname is the least populated country in South America. Its Economics is heavily dependent on the export of metals and minerals, especially bauxite. The fall in commodity prices since 2014 has particularly affected the country's accounts. GDP contracted by 3.4% in 2015 and by 5.6% in 2016. Although the trend then turned positive again, the IMF forecasts a 4.9% drop in GDP for 2020, as a result of the global crisis caused by Covid-19.

Since gaining independence from the Netherlands in 1975, its weak democracy has suffered three coups d'état. Two of them were led by the same person: Desi Bouterse, the country's president until this July. Bouterse staged a coup in 1980 and remained in power indirectly until 1988. During those years, he kept Suriname under a dictatorship. In 1990 he staged another coup d'état, although this time he resigned the presidency. He was accused of the 1982 murder of 15 political opponents, in a long judicial process that finally ended in December 2019 with a twenty-year prison sentence, which is now being appealed by Bouterse. He has also been convicted of drug trafficking in the Netherlands, for which the resulting international arrest warrant prevents him from leaving Suriname. His son Dino has also been convicted of drug and arms trafficking and is in prison in the United States. Bouterse's Suriname has come to be presented as the paradigm of the mafia state.

In 2010 Desi Bouterse won the elections as candidate of the National Democratic Party (NDP); in 2015 he was re-elected for another five years. In the 25 May elections, despite some controversial measures to limit the options of the civil service examination, he lost to Chan Santokhi, leader of the Progressive Reform Party (VHP). He tried to delay the counting and validation of votes, citing the health emergency caused by the coronavirus, but the new National Assembly was finally constituted at the end of June and is due to appoint the country's new president in July.

Total's operations in Surinamese and Guyanese waters [Total].

Relationship with Venezuela

Suriname intends to use the prospect of the oil bonanza to strengthen Staatsolie, the state oil company. In January, before the Covid-19 crisis became widespread, it announced purpose to expand its presence in the bond market in 2020 and also, conditions permitting, to list its shares in London or New York. This would serve to raise up to $2 billion to finance the national oil company's exploration campaign over the next few years.

On the other hand, Venezuela's territorial claims against Guyana, which affect the Essequibo - the western half of the former British colony - and which are being studied by the International Court of Justice, include part of the maritime space in which Guyana is extracting oil, but do not affect the case of Suriname, whose delimitations are outside the scope of this long-standing dispute.

Venezuela and Suriname have maintained special relations during Chavismo and while Desi Bouterse has been in power. On occasions, a certain connection has been made between drug trafficking under the protection of the Chavista authorities and that attributed to Bouterse. The offer made by Bouterse's son to Hezbollah to have training camps in Suriname, for which he was arrested in 2015 in Panama at the request of the United States and tried in New York, can be understood in light of the relationship between Chavism and Hezbollah, to whose operatives Caracas has provided passports to facilitate their movements. Suriname has supported Venezuela in regional forums at times of international pressure against the regime of Nicolás Maduro. In addition, the country has increasingly strengthened its relations with Russia and China, from which in December 2019 it secured the commitment of a new credit .

With the political change of the last elections, Maduro's Venezuela has in principle lost a close ally, while gaining an oil competitor (at least as long as Venezuelan oil exploitation remains at a low level).

High incidence of Covid-19 in the country contrasts with the government's swiftness in implementing measures

Peru has been an example in the Covid-19 crisis for its speed in applying containment measures and for approve one of the largest economic stimulus packages in the world, close to 17% of GDP. However, the high incidence of the pandemic, which has made Peru the second Latin American country in terms of cases of the coronavirus and the third in terms of deaths, has made it necessary to prolong the restrictions on activity longer than expected. This and lower external demand, weaker than initially predicted, have "more than eclipsed" the government's significant economic support, according to the IMF, which forecasts a 13.9% drop in GDP for Peru in 2020, the largest of the region's main economies.

lecture of the Peruvian President, Martín Vizcarra (r), in the presence of the head of Economics, María Antonieta Alva (l) [Gov. of Peru].

ARTICLE / Gabriela Pajuelo

International media such as Bloomberg y The Wall Street Journal have shown admiration for Peru's young minister of Economics , María Antonieta Alva. At 35, with a master's degree from Harvard and some experience in Peru's own administration, Alva designed one of the most ambitious economic stimulus plans in all of South America at the beginning of the crisis.

"From a Latin perspective, Peru is a clear leader in terms of macro response; I could have imagined a very different result if Toni wasn't there," he said. Ricardo HausmannAlva's Harvard professor, who is leading a team of experts advising Peru and ten other countries on how to mitigate the effects of the coronavirus. The minister has also become one of the best-known faces of President Martin Vizcarra's government among the working classes.

Peru was one of the first countries in Latin America to apply a state of emergency, limiting the freedom of meeting and transit in Peruvian territory and restricting economic activity. To prevent mass infection with the virus, the government decreed the closure of borders, restrictions on interprovincial movement, a daily curfew and a mandatory period of national isolation, which has been extended several times and has become one of the longest in the world.

This prolongation, agreed in the face of the high incidence of the pandemic, has damaged the economic outlook more than expected. Moreover, the prolongation of the emergency in countries to which Peru's exports are destined has weakened their demand for raw materials and damaged the resurgence of Peru's Economics . This is the IMF's estimate, which between its April forecast and the one updated in June has added nine more points to the fall in Peru's GDP for 2020. The IMF now considers that Peru's Economics will fall by 13.9% this year, the largest among the region's major countries. Although the ambitious stimulus package will not have prevented this decline, it will boost the recovery, with GDP rising by 6.5% in 2021, the strongest rebound among the largest Latin American economies. With regard to the latter forecast, the IMF specifies that, nevertheless, "there are significant risks to leave , linked to national and global challenges to control the epidemic".

A socio-economic context that does not financial aid to containment

Despite restrictive social distancing measures, the pandemic has had a high incidence in Peru, with 268,602 diagnosed cases (second only to Brazil in Latin America) and 8,761 deaths (behind Brazil and Mexico) as of 25 June. These high figures are partly due to the fact that the country's socio-economic conditions have meant that compliance with containment has not been very strict in certain situations. The social context has made it difficult to respect the mandatory quarantine due to structural problems such as the fragility of health services and infrastructure, the difficulty of efficient public procurement, prison overcrowding and the digital divide.

The high level of labour informalityThe fact that in 2019 it was 72% explains why many people have to continue working to ensure their subsistence, without following certain protocols or having access to certain material; at the same time, this informality prevents greater tax collection that would help to improve budgetary items such as health. Peru is the second Latin American country with the lowest health investment.

On the other hand, inequalitywhich in 2018 was 42.8 in the Gini index, is aggravated by the territorial distribution of expense, linked to the centralisation of employment of the rural population in Lima. During the pandemic, workers from the country's highlands who have migrated to the capital have wanted to return to their places of origin, as many are not on the payroll and have no labour rights, in contravention of the restrictions of mobility.

This social context makes it possible to question some of the economic measures approved, according to some Peruvian academics. The president of high school Peruano de Economics (IPE), Roberto Abusada, warned that Peru's macroeconomic strengths will not help forever. He considered that certain regulations are unenforceableThe "setting parameters such as body mass index (BMI) or an age limit, creates obstacles for this group of people, who could be highly qualified, and could not return to their centre of work".

Economic package

In late April, Minister Alva presented a $26 billion economic stimulus package, representing 12 per cent of GDP. Additional measures a month later raised that percentage to 14.4 per cent of GDP, and even then it would have been closer to 17 per cent. Comparatively speaking, this is one of the largest stimulus packages adopted in the world (in Latin America, the second largest is Brazil, with a stimulus of 11.5 per cent of GDP).

From agreement with the monitoring that the IMF Peru has adopted measures in three different areas: fiscal, monetary and macro-financial, and in terms of the exchange rate and the balance of payments.

First, in terms of fiscal measures, the government approved 1.1 billion soles (0.14% of GDP) to address the health emergency. In addition, various measures have been implemented, among which two stand out: the "Stay at home" voucher and the creation of the Business Support Fund for Micro and Small Enterprises (FAE-MYPE).

The first measure, for which the government approved approximately 3.4 billion soles (0.4% of GDP) in direct transfers, is a 380 soles (US$110) voucher targeted at poor households and vulnerable populations, of which there have been two disbursements. The second measure concerns the creation of a fund of 300 million soles (0.04% of GDP) to support MSEs, in an attempt to guarantee credit for capital for work and to restructure or refinance their debts.

Among other fiscal measures, the government approved a three-month extension of the income tax declaration for SMEs, some flexibility for businesses and households in paying tax obligations and a deferral of household electricity and water payments. The whole package of fiscal support amounts to more than 7% of GDP.

On the other hand, in terms of monetary and macro-financial measures, the Central Bank reservation (BCR) reduced the reserve requirement rate by 200 basis points, bringing it to 4%, and is monitoring the evolution of inflation and its determinants to increase monetary stimulus if necessary. It has also reduced reserves requirements , provided liquidity to the system with a package backed by government guarantees of 60 billion soles (more than 8% of GDP) to support lending and the chain of payments.

In addition, exchange rate and balance of payments measures have been implemented through the BCR's intervention in the foreign exchange market. By 28 May, the BCR had sold approximately USD 2 billion (0.9% of GDP) in foreign exchange swaps. International reserves remain significant, at more than 30% of GDP.

On the other hand, in the field of trade relations, Peru agreed not to impose restrictions on foreign trade operations, while at the same time liberalising the loading of goods, speeding up the issuance of certificates of origin, temporarily eliminating some tariffs and waiving various infractions and penalties contained in the General Customs Law. This was particularly the case for transactions with strategic partners, as the European UnionAccording to Alberto Almendres, the president of Eurochambres (the association of European Chambers in Peru). 50% of foreign investment in Peru comes from Europe.

In terms of Peruvian exports, although the emergence of the coronavirus in China at the beginning of the year slowed down transactions with that country, mining and agricultural exports remained positive. in the first two months of the yearas indicated in the high school research and of the Lima Chamber of Commerce. development (Idexcam). Subsequently, exports of raw materials and tourism have been more affected, especially in the case of exports of raw materials and tourism.

Comparison with Chile and Colombia 

The status in Peru can be analysed in comparison with its neighbours Chile and Colombia, which will have a somewhat smaller fall in GDP in 2020, although their recovery will also be somewhat smaller.

issue As for the issue of confirmed Covid-19 cases as of 25 June, Chile (259,064 cases) is similar in size to Peru (268,602), although the number of deaths is almost half that of Peru (4,903 Chileans and 8,761 Peruvians), which corresponds to the proportion of its total population.

In response to the pandemic, Chilean authorities implemented a series of measures, including the declaration of a state of catastrophe, travel restrictions, school closures, curfews and bans on public gatherings, and a teleworking law. This crisis came just months after the social unrest experienced in the country in the last quarter of 2019.

On the economic front, Chile approved a stimulus of 6.7% of GDP. On 19 March, the authorities presented a fiscal package of up to $11.75 billion focused on supporting employment and corporate liquidity (4.7% of OPIB), and on 8 April an additional $2 billion of financial aid to vulnerable households was announced, as well as a $3 billion (2%) guarantee plan from credit . In its June forecast update , the IMF expects Chile's GDP to fall by 7.5% in 2020 and increase by 5% in 2021.

In Colombia, the level of contagion has been lower (77,313 cases and 2,611 deaths), and its economic package to cope with the crisis has also been smaller: 2.8 per cent of GDP. The government created a National Emergency Mitigation Fund, which will be partially financed by regional and stabilisation funds (around 1.5 per cent of GDP), complemented by the issuance of national bonds and other budgetary resources (1.3 per cent). In its recent update, the IMF forecasts that Colombia's GDP will fall by 7.8% in 2020 and rise by 4% in 2021.

The trade dependence between the two countries - greater in the case of Brazil, but the Chinese also need certain Brazilian products, such as soybeans - ensures understanding between the two countries.

The relationship between Brazil and China has proved to be particularly pragmatic: neither Jair Bolsonaro has revised his ties with the Asian country as he promised before becoming president (in his first year in office he has not only kept Brazil in the BRICS but even made a highly publicised official trip to Beijing), nor has Xi Jinping punished partner for accusing him of mismanaging the coronavirus pandemic, as has happened with other countries. The convenience of mutual trade relations, revalued by the trade war between China and the US and the current global crisis, has prevailed.

Jair Bolsonaro and Xi Jinping in Beijing in October 2019 [Planalto Palace].

article / Túlio Dias de Assis

visit After years of criticising the "perverse communist government in Beijing", Jair Bolsonaro surprised people at the end of October with a state visit to the Forbidden City, which he himself specially publicised on social networks. On that trip he gave Xi Jinping the shirt of the Club de Regatas do Flamengo (the football team that at the time represented Brazil in the Copa Libertadores, which he would end up winning) and expressed his total conviction that he was in a capitalist country. In November he hosted a BRICS summit in Brasilia.

Bolsonaro's policy towards China had already begun to change shortly after he became president in January 2019, in contrast to his anti-China messages during the election campaign.

In fact, diplomatic relations between the two countries date back to the time of the board Military sample of which Bolsonaro is so proud. In 1974 Brazil recognised the People's Republic of China as the only China, thus allowing, despite being unaware of it at the time, the creation of a huge trade link between the two nations of continental proportions. Since then, as China's openness to China progressed, relations between China and Brazil have increased, so that for almost a decade now China has been Brazil's main trading partner, partner . China's dependence on Brazil is also notable in relation to certain products, such as soya, although for the Chinese, Brazil is the twentieth largest trader partner , since logically they are economies of very different sizes.

When in 1978 Deng Xiaoping decided to open China's Economics to the rest of the world, China's GDP was close to $150 billion, 75% of Brazil's, which was already over $200 billion. Four decades later, in 2018, Brazil's GDP was $1.8 trillion and China's was $13.6 trillion.

Soybeans and pigs

Brazil's greatest commercial and even political rapprochement with China occurred during the presidency of Luiz Inácio 'Lula' da Silva, during which the BRICS was formed, a club that helped create a greater level of economic and diplomatic proximity between member countries. This rapprochement led China to become Brazil's leading trade partner in exports and imports. Brazil's sales to China almost double exports to the US.

Although trade with Brazil represents less than 4% of the total value of goods that China imports annually, the South American country continues to be an important commercial partner for the People's Republic, due to the fact that the main product imported from Brazil is soya, one of the instructions of the per diem expenses habitual of a large part of the Chinese population. More than half of the soya imported by China comes from Brazil and the tendency is for this to increase, mainly due to the trade war with the US - the second main exporter of soya to China -, making Brazil practically the breadbasket of the Middle Kingdom. China is the destination for more than 70% of Brazilian soybean production.

Dependence on China, from the Brazilian consumer's perspective, was accentuated at the end of 2019 due to an exorbitant rise in meat prices. The average between the different Brazilian states hovered between 30% and 40% compared to previous months. Producers were able to substantially increase their profits in the short term deadline, but the popular classes openly protested against the uncontrolled price of a product that is very present on the average Brazilian's regular per diem expenses . The rise in prices was due to a combination of factors, including an outbreak of swine fever that devastated much of China's production. Faced with a shortage of supply in its domestic market, China was forced to diversify its suppliers, and in the midst of a trade war with the US, China had no choice but to turn to Brazil's agricultural potential, one of the few countries capable of meeting China's huge demand for meat. During this period - a brief one, as it gradually returned to the previous status - Brazil managed to obtain a certain coercive power over the Asian giant.

Huawei and credits

Brazil is extremely dependent on China at status subject technology: more than 40 per cent of Brazil's purchases from China are machinery, electronic devices or parts thereof. In the last decade, with the arrival of the smartphone and fibre-optic revolution in Latin America, Brazil decided to make a greater commitment to Chinese technology, thus becoming one of the main international markets for the now controversial Huawei brand, which has come to dominate 35% of the Brazilian mobile phone market. While the US and Europe were wary of Huawei and from the outset placed limits on its markets, Brazil saw Chinese technology as a cheaper way to develop and never let itself be swayed by suspicions of Chinese government interference in subject of privacy. Several deputies of the PSL (Bolsonaro's former party) even visited China in early 2020 to evaluate the possibility of acquiring Chinese facial recognition equipment to help state security forces fight organised crime, proposal which was ultimately rejected by parliament.

With the rise of the controversy over the risks of espionage that the use of the Chinese multinational's technology could pose, some voices have warned of the threat that Huawei's contracting could pose to quite a few government agencies and offices: a couple of embassies and consulates, part of the infrastructure of the Chamber of Deputies, and even the headquarters of the Public Prosecutor's Office and the Federal Justice in some federal states. Although given the lack of accusatory evidence against Huawei, little has been done by the government about it; only the cancellation of some purchases of Huawei devices.

Brazil is the country that has received the second largest amount of public loans from China in Latin America: 28.9 billion dollars (Venezuela is the first with 62.2 billion dollars), distributed in eleven loans between 2007 and 2017, nine of which come from the Bank of China development and another two from the Export-Import Bank of China. Although this is a large amount, it represents a very small percentage of Brazil's public debt, which now exceeds one trillion dollars. Most of the loans granted by Beijing have been earmarked for the construction of infrastructure for resource extraction. In addition, Chinese companies have invested in the construction of two ports in Brazil, one in São Luís (Maranhão State) and the other in Paranaguá (Paraná State).

The rhetoric of the coronavirus

Bolsonaro soon realised his dependence on China and opted for a policy of accommodation towards Beijing, far from his campaign messages. Once again, Brazil opted for pragmatism and moderation, as opposed to ideology and radicalism, in terms of Itamaraty (Ministry of Foreign Affairs) policy. Likewise, in the face of the instability caused by the US-China trade war and Trump's current weak position, Bolsonaro demonstrated pragmatism by not closing himself off to high-potential trade partners because of his ideology, as was seen last November at the BRICS summit in Brasilia.

But at times, rhetoric emerges that is in keeping with the original thinking. In the wake of the coronavirus pandemic, Bolsonaro has in some messages copied Trump's anti-China narrative. A good example is the exchange tweet exchange between Eduardo Bolsonaro, a federal deputy and the president's eldest son, and the Chinese ambassador, Yang Wanming. The former compared the coronavirus to the Chernobyl accident, insinuating total irresponsibility, negligence and concealed information on the part of the Chinese Communist Party. The ambassador responded that the president's son "on his last trip to the US did not contract the coronavirus, but a mental virus", referring to his ideological proximity to Trump.

However, all this status seems to have calmed down after a phone call between the presidents of both countries, in which both reaffirmed their commitments, especially those of a commercial and financial nature. Moreover, once again Bolsonaro seems to be following the Itamaraty's traditional line of neutrality, despite the constant insistence of his instructions in blaming China for the current tragedy. It is clear that economic dependence on China remains much stronger than the ideological principles of Bolsonaro's political base, however Trumpist it may be.

Albania and North Macedonia are forced to accept tougher negotiating rules, while Serbia and Montenegro reassess their options.

Brexit has been absorbing the EU's negotiating attention for many months and now Covid-19 has slowed down non-priority decision-making processes. In October 2019, the EU decided to cool down talks with the Western Balkans, under pressure from France and some other countries. Albania and North Macedonia, which had made the work that Brussels had requested in order to formally open negotiations, have seen the rules of the game changed just before the start of the game.

▲ meeting of the Western Balkans with EU countries, held in London in 2018 [European Commission].

article / Elena López-Doriga

Since its origins, the European Community has been evolving and expanding its competences through treaties structuring its functioning and aims. issue The membership of the organisation has also expanded considerably: it started with 6 countries (France, Belgium, the Federal Republic of Germany, Italy, Luxembourg and the Netherlands) and now consists of 27 (following the recent departure of the United Kingdom).

The most notable year of this enlargement was 2004, when the EU committed itself to integrating 10 new countries, which was a major milestone challenge, given that these countries were mainly from Central and Eastern Europe, coming from the "iron curtain", with less developed economies emerging from communist systems and Soviet influence.

The next enlargement round goal is the possible EU membership of the countries of the Western Balkans (Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia). However, at a summit held in Brussels at the end of 2019 to open accession negotiations for new members, some EU countries were against continuing the process, so for the time being the accession of the candidate countries will have to wait. Some EU leaders have called this postponement a "historic mistake".

Enlargement towards Central and Eastern Europe

In May 1999 the EU launched the Stabilisation Process and association. The Union undertook to develop new contractual relations with Central and Eastern European countries that expressed a desire to join the Union through stabilisation agreements and association, in exchange for commitments on political, economic, trade or human rights reform. As a result, in 2004 the EU integrated the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia (the first member from the Western Balkans). In 2007 Bulgaria and Romania also joined the Union and in 2013 Croatia, the second Western Balkan country to join.

The integration of the Western Balkans

Since the end of the Yugoslav wars in late 2001, the EU has played a very prominent role in the Balkans, not only as an economic power in subject reconstruction, but also as a guarantor of stability and security in the region. The EU's goal is in part to prevent the Western Balkans from becoming a security black hole, given the rise of rising nationalism, growing tension between Moscow and Washington, which fuels tensions between ethnic groups in the region, and China's economic penetration of the area. Clearer progress towards Balkan integration was reaffirmed in the Commission's Western Balkans strategy of February 2018 and in the Sofia Declaration following the EU-Western Balkans Summit held in the Bulgarian capital on 17 May 2018. At the Summit, EU leaders reiterated their unequivocal support for the European perspective of the Western Balkans. "I see no future for the Western Balkans other than the EU. There is no alternative, there is no plan B. The Western Balkans are part of Europe and belong to our community," said the then president of the European committee , Donald Tusk.

Official candidates: Albania and Macedonia

Albania applied for EU membership on 28 April 2009. In 2012, the Commission noted significant progress and recommended that Albania be granted the status of candidate, subject to the implementation of a number of outstanding reforms. In October 2013, the Commission unequivocally recommended that Albania be granted membership status candidate . visit Angela Merkel visited Tirana on 8 July 2015 and stated that the prospect of the Balkan region's accession to the European Union (EU) was important for peace and stability. He stressed that in the case of Albania the pace of the accession process depended on the completion of reforms in the judicial system and the fight against corruption and organised crime. In view of the country's progress, the Commission recommended the opening of accession negotiations with Albania in its 2016 and 2018 reports.

On the other hand, the Republic of North Macedonia (former Yugoslav Republic of Macedonia) applied for EU membership in March 2004 and was granted country status candidate in December 2005. However, the country did not start accession negotiations because of the dispute with Greece over the use of the name "Macedonia". When this was successfully resolved by the agreement of Prespa under the country's new name - Northern Macedonia - the committee agreed on the possibility of opening accession negotiations with this country in June 2019, assuming the necessary conditions were met.

Potential candidates: Bosnia and Herzegovina and Kosovo

Bosnia and Herzegovina is a potential candidate country. Although it negotiated and signed a Stabilisationagreement and association with the EU in 2008, the entrance entry into force of this agreement remained at Fail mainly due to the country's failure to implement a judgement core topic of the European Court of Human Rights. In the meantime, the Parliament of Bosnia and Herzegovina has not reached a agreement concerning the rules of procedure governing its meetings with the European Parliament (twice a year), as these meetings have not been held since November 2015, and this status constitutes a breach of agreement by Bosnia and Herzegovina. 

Kosovo is a potential candidate candidate for EU membership. It declared its independence unilaterally in February 2008. All but five Member States (Cyprus, Greece, Romania, Slovakia, Spain and Cyprus) have recognised Kosovo's independence. Among the countries in the region, Serbia and Bosnia and Herzegovina have also failed to recognise Kosovo as an independent state. In September 2018, the European Parliament went a step further and decided to open inter-institutional negotiations, which are currently underway. However, the fact that not all member states currently recognise its independence is a major stumbling block.

Negotiating accession: Montenegro and Serbia

Montenegro, one of the smallest states on the European continent, has been part of different empires and states over the past centuries, finally gaining independence peacefully in 2006. It applied to join the Union in December 2008; it was granted the status of a country candidate in December 2010, and accession negotiations started in June 2012. By the end of 2018, 32 negotiating chapters had been opened, out of a total of 35.

Serbia 's process began in December 2009 when former president Boris Tadić officially submitted application for membership and also handed over to justice war criminal Ratko Mladić, manager of the Srebrenica massacre during the Bosnian War, who was hiding on Serbian territory. However, the conflict with Kosovo is one of Serbia's main obstacles to EU accession. It was granted country status candidate in March 2012, after Belgrade and Pristina reached an agreement agreement on Kosovo's regional representation. The official opening of accession negotiations took place on 21 January 2014. In February 2018, the Commission published a new strategy for the Western Balkans stating that Serbia (as well as Montenegro) could join the EU by 2025, while acknowledging the "extremely ambitious" nature of this prospect. Serbia's future EU membership, like that of Kosovo, remains closely linked to the high-level dialogue between Serbia and Kosovo under EU auspices, which should lead to a legally binding comprehensive agreement on the normalisation of their relations.

A step back in the negotiations

In October 2019, a summit was held in Brussels, goal to structure the negotiations of the official candidates for EU membership. Both North Macedonia and Albania were convinced that a date would be set to start the long process of negotiations. However, the process reached a stalemate after seven hours of wrangling, with France rejecting both countries' entrance . France led the campaign against enlargement, but Denmark and the Netherlands also joined the veto. They argue that the EU is not ready to take on new members. "It doesn't work too well at 28, it doesn't work too well at 27, and I'm not sure it will work any better with another enlargement. So we have to be realistic. Before enlarging, we need to reform ourselves," said French President Emmanuel Macron.

The then president of the European Commission, Jean-Claude Juncker, considered the suspension to be a major historic mistake and hoped that it would only be temporary. For his part, Donald Tusk said he was "ashamed" of the decision, and concluded that North Macedonia and Albania were not to blame for the status created, as the European Commission's reports were clear that both had done what was necessary to start negotiations with the EU.

In Albania, Prime Minister Edi Rama said that the lack of consensus among European leaders would not change Albania's future EU membership aspirations. He asserted that his government was determined to push ahead with the reforms initiated in the electoral, judicial and administrative spheres because it considered them necessary for the country's development , not just because Brussels demanded it.

In North Macedonia, on the other hand, the European rejection was deeply disappointing, as the country had proceeded to reform its institutions and judicial system and fight corruption; it had also changed its constitution, its name and its national identity. The rejection left the country, candidate official status for the past 14 years, in a state of great uncertainty, and Prime Minister Zoran Zaev decided to dissolve parliament and call elections for 12 April 2020 (later postponed due to the Covid-19 emergency). "We have fulfilled our obligations, but the EU has not. We are the victims of a historic mistake that has led to a huge disappointment," Zaev said.

A new, stricter process

Despite the fact that, according to the Commission, North Macedonia and Albania fulfilled the requirements criteria to become accession candidates, Macron proposed to tighten the accession process. In order to unblock status and continue with the process, which the EU claims to be a priority goal , Brussels has given in to the French president's request by establishing a new methodology for integrating new countries.

The new process envisages the possibility of reopening chapters of the negotiations that were considered closed or of fail the talks underway in one of the chapters; it even envisages paralysing the negotiations as a whole. It aims to give more weight to governments and to facilitate the suspension of pre-accession funds or the freezing of the process if candidate countries freeze or reverse committed reforms. The new method will apply to Albania and North Macedonia, whose negotiations with the EU have not yet begun, while Serbia and Montenegro will be able to choose whether to join, without having to change their established negotiating framework , according to the Commission.

One of the main instruments for combating poverty loses its relevance between the end of the "golden decade" and the beginning of the "second lost decade".

So-called Conditional Cash Transfers (CCTs) -submission of money to disadvantaged families with a commitment to schooling, medical check-ups or other basic requirements that, along with improving household incomes, sought to promote the options of the younger generation - have over the last two decades helped to significantly increase the class average in Latin America. But once beyond the subsistence level, citizens have recently begun to demand improved services, such as teaching, healthcare or transport - as seen in the protests of recent months in the region - to which CCTs no longer provided an answer. Just as countries were thinking of readapting their policies in response to this change in perspective, the Covid-19 crisis threatened to throw millions of people back into poverty, so cash transfers became necessary again, this time without conditionalities.

Beneficiaries of Brazil's Bolsa Família, one of the pioneering conditional cash transfer programmes [Gov. of Brazil].

article / María Gabriela Fajardo

The first Conditional Cash Transfer (CCT) programmes in Latin America, a pioneer region in the implementation of this instrument, were developed in the mid-1990s in Brazil and Mexico with the intention of "transforming and halting the intergenerational transmission of poverty through the development of human capacities in the most vulnerable families", as stated by a report of ECLAC (United Nations Economic Commission for Latin America and the Caribbean). status The CCTs were designed to provide support to families in poverty or extreme poverty with under-age children. The submission of this monetary aid (also non-monetary) was provided as long as the families complied with basic conditions of health, Education and nutrition for the children.

The implementation of CCTs spread rapidly throughout the region. In 1997, only four countries had any of these programmes: Brazil (Bolsa Escola), Ecuador (Bono Solidario), Honduras (Programa de Asignación Familiar) and Mexico (Progresa). A decade later, almost all Latin American countries had adapted the initiative.

Although in some cases this tool has been controversial, given that some governments have been able to use it as "an instrument of social policy and its targeting is discussed as a strategy to address actions that must operate under restricted budgets", according to the aforementioned report of ECLAC, the truth is that CCTs are considered to have contributed to the socio-economic progress of the region. Alejandro Werner, director for the Western Hemisphere of the International Monetary Fund (IMF), recently pointed this out. "In the last 15 years," he said, giving part of the credit to CCTs, "important progress has been made in the topic area of poverty alleviation and reduction of income maldistribution. In this way, Latin America is probably the region where we see the greatest improvement in income distribution".

agreement Between 2002 and 2014, a time known in Latin America as the "golden decade" (a consequence of the commodities boom ), the poverty rate in the region fell from 45.4% to 27.8%, so that 66 million people overcame that status, according to the Social Panorama of Latin America 2019 published by ECLAC. Additionally, the extreme poverty rate decreased from 12.2% to 7.8%. However, since 2015, the level of poverty and extreme poverty began to increase, patron saint which has continued since then, albeit moderately. For 2019, ECLAC predicted an increase in poverty and extreme poverty to fees of 30.8% and 11.5%, respectively, so that 27 million more people returned to poverty compared to 2014. 

The challenge: from extreme poverty, to the class average

This slight reversal indicates that many who in that "golden decade" gained access to the class average , making this sector of the population a majority for the first time, find themselves in a high Degree of vulnerability. At the same time, these people have seen their expectations of subsequent progress and access to better services from the state unmet after their previous status of survival. The new challenge in many countries was to make public policies revolve around other factors that would allow the consolidation of these people in the class average . This neglect generated discontent that contributed to the large protests in several Latin American countries at the end of 2019.

The increased demands of a better-off population made structural deficiencies more evident. "The region's structural deficiencies have become more evident and their solution is part of the demands of broad social groups, particularly the new generations", according to report Social Panorama. In particular, ECLAC warned about "segmented access to quality public and cultural services".

In Werner's words, "having achieved such a significant reduction in the reduction of poverty also generates an important challenge for policy makers in Latin America, since the design of social policies has to be oriented towards attending to other factors, not to the reduction of extreme poverty. It is not that we have to forget about that, but clearly the challenge now is to focus also on addressing those segments of the population that are no longer in poverty, which are class average ". After underlining the precariousness of this large group of the population that has moved up the social ladder, the IMF's manager for the Western Hemisphere indicated that "clearly the instruments to address this vulnerability are different from the conditional transfer schemes that were implemented in the past", and specifically cited access to quality health and Education .

However, states have faced the need for this paradigm shift without budgetary support. It is evident that the state has little capacity to respond to the new needs of the vulnerable population affected by low levels of education, few opportunities at work and the inefficiency of the pension system.

The countries have found that economic growth, which between 2000 and 2013 hovered jointly around 2%, has been weakening since 2014. Thus, real GDP per capita in the region has declined by 0.6% per year. The causes of this decline in economic growth can be classified into two factors, as Werner explained. Firstly, structural causes have inhibited potential growth due to "low investment, slow productivity growth, a poor business climate Pass , the leave quality of infrastructure and Education". Second, cyclical causes include weak global economic growth and low commodity prices; uncertainty in large regional economies such as Brazil and Mexico, sudden economic stops in stressed economies such as Argentina and Ecuador, and social tensions in the last quarter of 2019.

Coronavirus

The emergence of the Covid-19 pandemic has worsened the economic outlook for Latin America and the Caribbean, for which the April 2020 report forecasts a 5.2% drop in GDP this year. Although the IMF estimates a recovery of 3.4% in 2021, this will not be enough to allay fears of a new "lost decade". In his most recent intervention to comment on these data, Werner warned that between 2015 and 2025 GDP per capita "will be flat".

To cope with this new status, socially aggravated by the health crisis and the suffering of so many people, governments are resorting to direct cash transfers, no longer conditional, to vulnerable households. In a way, it is a return to a stage of need that was even earlier, before the CCTs were extended. It is a return to the urgency of the 1980s, known in Latin America as the lost decade, when countries had to apply shock measures to get out of a severe public debt crisis.

development The president of the Inter-American Development Bank (IDB), Luis Alberto Moreno, believes that it is still too early to speak of a second lost decade, but agrees that the time is ripe for unconditional transfer programmes. "The big question is whether everything we have achieved in the last 15 years in terms of reducing poverty and extreme poverty, with the incorporation of some Latin Americans into the middle classes, is going to be lost or whether, on the contrary, the capacity of the social systems and the governments' drive to increase the debt and the public expense will cushion the effects," Moreno affirms. All the countries "are strengthening the transfer programmes that were developed almost two decades ago, and which have been very successful", although "in this case they will not be conditional, in order to preserve the income of many families".

Apart from China, Italy has received aid from Russia and Cuba, making a risky geopolitical move in the European context.

The global spreading of the virus is putting under stress the big ally of the Union, the United States, which is demonstrating its lack of an efficient social health care system. Furthermore, the initial refusal of Washington to send help to the EU was seen as an opportunity for countries like Russia, China and Cuba to send medical and technical support to those countries of the EU that are most affected by the virus. Italy has taken aid send by Beijing, Moscow and Havana, shaking the geopolitical understandings of the EU's foreign policy.

▲ Russia's aid arrived in Italy in the middle of the pandemic crisis [Russian Defense Ministry].

ARTICLE / Matilde Romito

The World Health Organisation (WHO) declared Corona Virus (Covid-19) a pandemic on the 11th of March, 2020. The fast widespread of the virus pushed numerous countries around the world and especially in Europe where there is the highest number of confirmed cases, to call for a lockdown. This extreme measure is not only leading the EU and the entire world towards an unprecedented economic crisis, but it is also redefining geopolitics and the system of alliances we were used to.

The pandemic. On January 30, 2020, the World Health Organisation (WHO) declared the first outbreak of novel coronavirus a 'public health emergency of international concern'. In mid-February, numerous cases of corona virus began to be reported in northern Italy and in several European countries. Initially, the spread of the virus mainly hit Italy, which reported the biggest number of cases among the EU states. In March, Italy started with the implementation of social-distancing measures and the consequent lockdown of the country, followed by Spain, France and other European countries. On March 11, 2020, the WHO declared covid-19 a global pandemic. Currently, Europe is the region of the world with the highest number of confirmed cases. According to the WHO, on April 6, Europe reached 621,407 cases compared to the 352,600 cases in America and the 112,524 in Western Asia.

The global lockdown. At first, several major airlines suspended their flights from and to China, in order to avoid further contaminations. Now, the majority of flights in Europe and in other regions have been cancelled. The biggest areas of world are under lockdown and the economic consequences of this are becoming more and more evident. A forced social distancing seems to be the only way to contain the spread of the virus and the closing of national borders is currently at the center of states' policies to combat the virus. However, some European countries, such as Sweden, do not seem to agree on this.

Lack of solidarity

We are assisting to a global situation of 'everybody for oneself,' and this has become highly evident within the EU itself. Individual countries within the Union have shown high levels of egoism on different occasions. The North-South divide within the EU is clearer than ever, particularly between the Netherlands and Austria on the one side, and Italy, Spain, France and Greece on the other side. The former group of countries is asking for compromise and conditions to lend money to the most afflicted ones for countering the crisis, while the latter group is asking the EU to share the debts accumulated in order to save European economies (eurobonds).

The different spread-intensity of the virus in different European countries has shown more than once the fragility of the Union, which demonstrated to be led by the arrogance of the rich. On different occasions European leaders have shown a lack of European identity, solidarity and common vision. For instance, at the beginning of the crisis France and Germany attempted to 'cover with the European flag' medical products directed to Italy, by declaring them 'European products', trying to compensate the initial inaction of the EU. Another example, could be the seizure by the Czech Republic of 110,000 Chinese masks and thousands of breathing supports, which were destined to Italy (March the 21st). Moreover, the lack of unity also came from an unjustified action of protectionism undertaken by Poland, which closed its market to agricultural products coming from Italy on March 18, despite it was already known that the virus could not be spread through such products.

Nevertheless, there are some good and unexpected examples of solidarity. For instance, a good lesson on European solidarity came from the small state of Albania. The Albanian prime minister Edi Rama taught European leaders what it means to be part of the EU by sending a medical unit to the Italian region of Lombardy, despite the numerous difficulties Albania is facing, thus showing that the fight against the virus has no nationality and it cannot leave room for egoistic calculations. Moreover, more recently Germany has accepted to receive and take care of numerous patients coming from Italy, where the majority of health infrastructures are saturated.

Overall, little comprehension and solidarity has been shown between European member states, thus being criticised by the European Commission president, Ursula Von Der Leyen.

Geopolitical tensions

The EU is going through numerous changes in the relations between its members. The closing up of individual countries poses a big challenge to the EU itself, which is founded on freedom of movement of people and goods.

Currently, sending masks and medicines seems to have become the main means for countries to exert influence in global affairs. The global spreading of the virus is putting under stress the big ally of the Union, the United States (US), which is demonstrating its lack of an efficient social health care system. Furthermore, the initial refusal of Washington to send help to the EU was seen as an opportunity for countries like Russia, China and Cuba to send medical and technical support to those countries of the EU that are most affected by the virus, like Italy and Spain. After having seen its hegemonic position in Europe under threat, the US decided to send monetary help to some European countries, such as 100 million dollars to Italy, in order to help in countering the emergency.

At the end, the EU seems to start standing all together. But, did the European countries take action on time? Generally, countries, like human beings, are more likely to remember one bad impression better than numerous good ones. Therefore, are countries like Italy going to 'forgive' the EU and its initial inactivity? Or are they going to fall back on countries like Russia and China, which have shown their solidarity since the beginning?

Furthermore, did the EU take action because of an inherent identity and solidarity? Or was it just a counteraction to the Chinese and Russian help? It seemed that specifically Germany's mobilisation followed the exhortation of the former president of the European Central Bank (ECB), Mario Draghi. He accused Germany and other countries of taking advantage of the virus for imposing a 'conditionality' to the countries that were asking for help. Moreover, in an interview on the Financial Times he called for an exceptional investment in the economies and for a guarantee of the debts, in order to jointly face the crisis, because no country can face this unprecedented threat alone. Now, anti-virus economic action turned into a matter of urgency for Europe and the European Commission is working on a common European response to the crisis.

Future perspectives

Probably, after the end of the virus spread, the world will assist to important changes in the global dynamics of alliances. Russia and China will most likely have one or more European allies to advance their interests in the EU. On the one side, this could lead to a further weakening of the EU governance and to the re-emergence of nationalism on states' behaviour within the Union. And on the other side, it could lead to the development of further mechanisms of cooperation among the EU members, which will go beyond the eurobonds and will probably extend to the sanitary dimension.

To preserve its unity, the European political-economic-cultural area will need to be strengthened, by fighting inequalities with a new model of solidarity. Its future prosperity will most likely depend on its internal market.

Nevertheless, for now the only thing we can be sure about is that the first impression on the EU was very bad and that this situation is going to lead all of us towards an unprecedented economic crisis, which most probably will redefine the political relationships between the world's biggest regions.