CUZCO, Peru (AP) - Presidents and high-ranking officials from 12 South American countries gathered in this ancient Inca capital yesterday to create a political and economic bloc that would give them a stronger voice in dealing with the United States, Europe and Asia.

Bolivian President Carlos Mesa, left, embraces Peru's President Alejandro Toledo at the South Americans Presidents Summit at the Koricancha ruins in Cuzco yesterday. (Photo:AP)

"Today we have a new country with 361 million inhabitants," Peruvian President Alejandro Toledo said in welcoming seven presidents to the historic summit in the ancient Inca sun temple of Coricancho.

The presidents of four of South America's 12 nations - Argentina, Uruguay, Paraguay and Ecuador - did not attend and instead sent representatives. Their absence raised doubts among critics of the new organisation, who questioned the firmness of the commitment to form a powerful regional bloc.

But Toledo was optimistic about what the bloc means to the development of South America. "The South American Community of Nations which is born today should help us to confront the challenges of globalisation so that it is fairer, more equitable," Toledo said.

"It will allow us to act jointly and united on the international stage to increase our negotiating capacity and take the leap to conquer markets in the United States, Europe and Asia."

The summit in Cuzco, a city high in the Andes, was the third time South America's presidents have convened since Brazil invited them to meet in 2000 to discuss projects to link the countries through a network of highways, railways and rivers to boost trade in the region.

Yesterday, Peru and Brazil took a step in that direction when Toledo and Brazilian President Luiz Ignacio Lula da Silva announced an agreement on the financing of a highway that will connect the southeast of Brazil to Peru's Pacific ports of Matarani, Ilo and Marcona.

The road will cut through virgin rain forest in Peru, and international environmental groups have expressed concern about its impact.
On paper the South American Community of Nations is impressive.

It covers 17 million square kilometres, with 361 million inhabitants, making it, in Toledo's words, "one of the biggest on the planet," with a gross domestic product of more than US$973 billion (euro725 billion) and with exports above US$180 billion (euro134 billion).

Peruvian Foreign Minister Manuel Rodriguez noted before the meeting began that South America's combined gross domestic product exceeds Canada's and "is much greater, by more than US$200 billion (euro149 billion), than that of the famous Asian tigers."

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