7 September 2006 Edition

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International: New possibilities in Latin America

Another world is possible

Another world is possible, and Venezuela's president Hugo Chavez is ready to demonstrate it. His election and, more importantly, his decision to put an end to US hegemony in Latin America, has opened the door to new possibilities in social, political and economic areas.

A clear example of this has been Chavez's opposition to the Free Trade Agreement of the Americas (FTAA), a US initiative addressed to South America and directed to benefit the two economic powers in the American continent: the US and Canada.

However, the election of Chavez in Venezuela, Lula in Brazil, Kristchner in Argentina, and Morales in Bolivia paralysed the US initiative that has now broken down in a series of bilateral agreements.

But make no mistake, the importance of Chavez's opposition to the FTAA plan is the creation of an alternative directed to benefit Latin American populations, those whose needs are so often ignored by their respective governments. The alternative is called the Bolivarian Alternative for the Americas, ALBA in Spanish ("alba" also means dawn). President Chavez first proposed the idea at Isla Margarita at the Third Summit of the Heads of State and the Government of the Association of Caribbean States in December 2001.


ALBA is a project based on co-operation and solidarity, without forgetting economic sustainability. Solidarity is not just a word for Chavez, who has shown so far how it is possible to make economic sense of and to draw social benefits from the international market. Some examples:-

o His use of oil revenue to fund literacy, education, food security and health projects for disadvantage Venezuelans;

o His loans to Brazil and Argentina so they could pay their World Bank and IMF fund debts and escape from the dictates of this two international financial agencies, always so eager to favour powerful economies on the back of the hunger and desperation of developing countries;

o His supply of cheap oil to Cuba and disadvantaged households in the US.

What Chavez now wants is to create an international outlet for his project for a new Latin America, where governments would aim to satisfy the needs of their people instead of following the dictates of the international economic forums. This will be a new road away from multinationals and the neo-liberal approach. Every country would be able to retain its sovereignty - an impossibility under the dictates of the IMF that force privatisation of public services and natural resources (including water) and structural adjustment policies that aggravated Latin American debt and increased inequality.

Work in progress

But ALBA is still a work in progress as it is being moulded by Latin American countries.

The first official declaration and subsequent agreement made under the framework of ALBA was signed between Cuba and Venezuela in Havana on 14 December 2004, Bolivia joining in April 2006. The declaration laid out the founding principles of ALBA in "firm rejection of the content and goals of the FTAA" and "[in affirmation] that that cardinal principle that should guide ALBA is the great solidarity among the people of Latin America and the Caribbean as upheld by Bolivar, Marti, etc".

The agreement contains 12 guiding principles which include the blueprint for co-operation, solidarity, and integration. Among numerous proposals are:-

1 A continental literacy plan;

2 A Latin American plan for free health care;

3 An education scholarship programme;

4 A Social Emergency Fund;

5 A Development Bank of the South;

6 A regional petroleum company, Petroamerica;

7 A regional television station, Telesur - already one year broadcasting for the Caribbean and northern South America, and on the internet ( http://www.telesurtv.net/).

Some of the proposals have moved faster than others, such as Telesur which has already celebrated its first birthday.

Some analysts have pointed out that this initial agreement is only a bilateral one, but it can be understood as the first and effective step of the ALBA. This was reinforced by a new agreement signed between Venezuela and Cuba in April 2005, laying out the steps they would take to implement their accords in the Strategic Plan for the Application of ALBA, so as "to guarantee the most beneficial productive complementation on the bases of rationality, exploiting existing advantages on one side or the other, saving resources, extending useful employment, access to markets or any other consideration sustained in genuine solidarity that will promote the strengths of the two countries".

One year later, in April of this year, the newly-elected Bolivian president, Evo Morales, travelled to Havana to sign the agreement, where the three countries highlighted further plans for increased trade, exchange and solidarity based on the tenets of ALBA.

As highlighted in a recent report from the Council on Hemispheric Affairs, after Colombia (traditionally a market for Bolivian soy) decided to pursue a free trade agreement with the United States, Cuba and Venezuela agreed to buy or barter for all of Bolivia's soy exports under the framework of ALBA. In exchange for some of the products, Cuba has promised to send doctors and teachers to work in impoverished regions throughout the country, a common experience in the 'social trade' amongst the three countries.

Merely the beginning

All of these agreements signed between Cuba, Venezuela and now Bolivia, under the framework of ALBA, could lead one to believe that "Bolivar's Alternative" is constrained only to these three countries and their mutual development. But in reality these ALBA agreements are merely the beginning framework, and a small portion of what many consider to fall under the grand umbrella of ALBA.

Another complex question is ALBA's relationship with Mercosur, the South American trading bloc, made up of Brazil, Argentina, Paraguay, Uruguay and (as of early July) Venezuela.

With the fact that Mercosur now constitutes 75 per cent of South America's economic activity, holds 65 per cent of the continent's population, and contains some of the largest reserves of water and hydrocarbons on the planet, there is no doubt as to the geo-political importance of the trading bloc as an economic front against the United States. However, the ALBA spirit still has to imbue Mercosur.

Although Mercosur has recently taken on a more social focus with the addition of Venezuela, the recent economic accords signed with Cuba, and Castro's offer to share the Cuban social and educational experiences with the rest of the countries, it still has to answer the call of Chavez to become a vital step towards the integration of the Americas and the formation of ALBA.

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