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"Just as the integration project that we know today as the European Union started with the European Coal and Steel Community in the 1950s, we could begin with a community of highways and energy," commented Fernando Reyes Matta, a former Chilean ambassador to New Zealand. Chilean President Ricardo Lagos will be one of the 12 South American leaders to sign the founding document of the new community, the central issue to be discussed at the third South American presidential summit. The first was held in 2000, on the initiative of Brazilian President Fernando Henrique Cardoso (1995-2003). The debates and ceremonies will take place Wednesday and Thursday in Cuzco and the nearby city of Ayacucho, in southern Peru. Brazil's left-leaning President Luiz Inácio Lula da Silva is one of the driving forces behind the creation of the South American community, which will be based on the Southern Common Market (Mercosur) and the Andean Community of Nations (CAN) trade blocs, along with Chile, Guyana and Suriname. Chile has been an associate member since 1996 of Mercosur, the bloc created in 1991 by Argentina, Brazil, Paraguay and Uruguay. It also formed part of the Andean Pact, CAN's predecessor, which it helped create in 1969. But it withdrew from that grouping in 1975, during the dictatorship of Gen. Augusto Pinochet (1973-1990). CAN is made up of Bolivia, Colombia, Ecuador, Peru and Venezuela. Bolivia and Peru are also associate members of Mercosur, and Venezuela is about to gain that status. Mercosur is also negotiating association agreements with Mexico and the Central American Common Market. "The project for the creation of a South American community of nations is a contribution to the goals of integration that these countries have long cherished," said the Chilean analyst. "But this involves putting them into practice in a very realistic manner, and above all, with concrete projects." The South American community will begin to be built by means of 32 physical infrastructure projects, with a total combined investment of 4.2 billion dollars, over the next five years. The aim is to provide connections throughout a territory covering 17 million square kilometres that is home to more than 350 million people. Reyes Matta, who helped draft the Andean Pact in the early 1970s, said the proposal for expanding the region's network of roads goes far beyond what has often been empty rhetoric on the need for integration. "There is also the important and novel question of energy integration, which will be a key issue in the 21st century," said the analyst. "In this case, that means assessing the resources -- wind, hydroelectric, natural gas, etc. -- that each country has, in order to transfer energy from one country to another." Although Chile has abundant hydropower resources, it lacks oil and natural gas. Forty percent of the country's energy needs are currently covered by gas imports from Argentina, which were reduced in late 2003, when domestic demand for energy grew in that country. Physical integration with neighbouring countries through new networks of roads will also help boost Chile's exports. Chile, with its Pacific Ocean ports, also hopes to become a gateway for imports and exports of products between the Southern Cone nations of Latin America and the Asia-Pacific rim region. That objective was underlined by Lagos at the Nov. 21 summit of Asia-Pacific Economic Cooperation (APEC) forum leaders, which was hosted by Santiago. (The only Latin American members of APEC are Chile, Mexico and Peru). Hugo Fazio, the director of the leftist National Centre for Alternative Development (CENDA), told IPS that until now Chile has played a "pernicious" role in Latin American integration, because it has favoured relations with the United States and APEC at the expense of its ties to Mercosur and CAN. "In the early 1990s, Chile had the opportunity to join Mercosur, but it did not do so, and instead favoured the push for a free trade treaty with the United States. That was under the administration of Patricio Aylwin (1990-1994), but it has also been the focus taken by all of the governments of the Coalition for Democracy," he added. The centre-left Coalition has governed the country since the restoration of democracy in 1990. Fazio, who was vice-president of the Central Bank in the 1970-1973 administration of Salvador Allende (the socialist president who was overthrown by Pinochet), said "the Chilean government wants to play a really difficult game - maintaining strong political relations with the countries in the region, while from an economic point of view putting higher priority on other situations." "But the link between the economy and politics is very direct," said the director of CENDA. Favouring relations with the Asia-Pacific rim region at the expense of ties with the rest of Latin America "is criticizable in every sense," said Reyes Matta. The former ambassador underlined that Lagos himself, in articles published in newspapers in Brazil and Argentina on the occasion of the APEC summit, said Chile has a key role to play in terms of interaction between the Asia-Pacific region and the rest of South America. Reyes Matta also pointed to the specific characteristics of the Chilean economy. "It is necessary to understand that unlike countries like Brazil and Argentina, Chile's gross domestic product (GDP) depends on foreign trade. It's not that an overly heavy accent is put (on the Asia-Pacific region), but that we have put the minimum accent needed to carry out a coherent 'economic project'," said the analyst. And one that has been successful, he added, since Chile is considered the most competitive country in Latin America, and because it has helped bolster the development and growth of the Chilean economy, 70 percent of whose GDP depends on exports and imports. "There is an enormous difference, for example, with Brazil, where exports and imports make up 22 or 23 percent of GDP," said Reyes Matta. "Chile has no choice but to stake its bets on insertion in the world, but it does so from where it is, and for that reason, it is a factor of interaction between the markets of South America and other markets," said Reyes Matta. Senator Sergio Romero of the right-wing National Renovation Party said Chile's participation in the South American community will be effective if there are clearly defined accords on the scope and details of the initiative. But, he pointed out to IPS, "South American public opinion" is not familiar with the project.