ALBA: New dawn for Latin America

The Bolivarian Alliance for the Americas (ALBA) was initiated in 2004 with a set of trade and cooperation agreements between Cuba and Venezuela. Its immediate origins lie in the famous barter trade between the two countries which began in 2000. Cuba sent thousands of educators and medical personnel to Venezuela, which in turn sold 53,000 barrels of oil a day at below world market prices to Cuba. This was followed in 2001 by an agricultural cooperation deal. In December that year, Venezuelan President Hugo Chavez first proposed a ‘Bolivarian Alternative’, to counter the neo-liberal Free Trade Area of the Americas (FTAA), known in Spanish as ALCA. ALBA means ‘dawn’ in Spanish.

Between 2006 and 2009, Bolivia, Nicaragua, Dominica, Honduras (under Zelaya), St Vincent & the Grenadines, Antigua & Barbuda and Ecuador joined ALBA (with Paraguay intending to join at the end of 2009), and the ‘Alternative’ was consolidated as an ‘Alliance’; a ‘trade treaty of the people’. ALBA’s institutional framework is established, with secretariats, work commissions, councils, bi-national corporations and so on. It provides cooperation agreements between governments, without imposing changes to domestic institutions or social-relations, whilst providing ideological and material support for radical internal reforms. Principally, ALBA is building a barrier to US domination and European capital penetration, buttressing the most radical governments (Cuba, Venezuela, Bolivia and Ecuador) while offering other countries in the region concrete examples of the benefits of trade relations based on south-south cooperation and the potential for welfare-based development.

By April 2009, there were 100 ALBA-projects underway, promoting non-market, non-profit based exchanges with the aim of keeping resources and surpluses in the region. ALBA projects use member-states’ resource strengths to promote domestic development focused on eradicating poverty and breaking traditional patterns of economic dependence, exacerbated by neo-liberalism. This bloc has the potential to become increasingly important in the context of the global financial crisis, highly unstable world commodity prices and recession in the most developed capitalist countries with devastating consequences around the world. The Bank of ALBA, inaugurated in December 2008, operates without loan conditions and with the consensus of members. Early in 2010 a new virtual currency, the SUCRE, will be introduced for exchanges within ALBA, undermining the leverage of the US dollar and international financial institutions.

ALBA is inspired by the welfare-based development model of socialist Cuba, with its medical and educational internationalism. ALBA in turn has removed from Cuba the obligation to completely insert itself into the international capitalist economy. It has provided the Revolution with an alternative export strategy that is consistent with its socialist principles, reaps the benefits of the Revolution’s investments in education and healthcare and is not obstructed by the US blockade.

The April 2009 the ALBA Declaration of Cumana, Capitalism Threatens Life on the Planet says: ‘it is necessary to develop and model an alternative to the capitalist system. A system based on: solidarity and complementarities, not competition; a system in harmony with our mother earth and not plundering of human resources…in summary, a system that recovers the human condition of our societies and peoples and does not reduce them to mere consumers or merchandise.’

Although at present the economic impact of ALBA is limited, its regional political and social implications are already significant. The emergence of an independent, alternative alliance in a region rich in hydrocarbons, metals and agricultural land is seen as a threat to US domination and European capital investment in the region.  ALBA’s relations with Brazil and Argentina are increasingly fraternal, as it draws them towards its operation principles (trade between Brazil and Argentina is no longer carried out in the US dollar, but by a system of payment in local currencies), and unites with them in a defensive bloc against the Colombian regime, which will host seven US military bases relocated there after the expulsion of the US from La Manta base in Ecuador.

The future consolidation and expansion of ALBA will take place in the context not only of growing US hostility but also of a global recession. Whatever the difficulties, socialists and progressive people everywhere should celebrate the example and achievements of ALBA. Three Latin American countries have eradicated illiteracy in the last five years (as Cuba did in 1961): Venezuela, Bolivia and Nicaragua, while Ecuador will achieve this historical goal soon. This is testimony to the revolutionary solidarity promoted by ALBA.

Helen Yaffe

FRFI 212 December 2009 / January 2010