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Opinion and Analysis: Economy | International

ALBA: Creating a Regional Alternative to Neo-liberalism?

Latin America was the first place where the US imposed the most callous economic system ever seen: neo-liberal capitalism. Starting in Chile in 1973, the US used its power, along with its control over the IMF and the World Bank, to force governments across Latin America to adopt neo-liberal economic policies. This has seen Latin American countries embrace trade liberalization, financial liberalization, privatization, and labor market flexibility. Of course, US multinationals benefited from this. They have snapped up ex-state owned assets throughout Latin America at bargain basement prices. With the reduction of tariffs and the advent of "free" trade, US multinationals have also flooded Latin America with cheap exports. This has seen US multinationals making massive profits. The people of Latin America have paid for this. Since the advent of neo-liberalism, inequality in Latin America has grown, and millions of people have lost their jobs along with their access to healthcare and education.1

Recently, however, a wind of change has been blowing across Latin America. Starting with anti-IMF riots in Caracas in 1989, and the rise of the Zapatistas in the early 1990s, people in Latin America have started resisting neo-liberalism and US domination. Within the last few years, a number of progressive leaders -- for example, Chavez in Venezuela, Morales in Bolivia, and Correa in Ecuador -- have come to power on the back of this resistance. For these governments, breaking with neo-liberalism has been a priority.2 Perhaps the most important initiative for that has been the creation of the Bolivarian Alternative for the Americas (ALBA). Indeed, ALBA is aimed at striking a major blow against US hegemony, the IMF, the World Bank, "free" trade, and neo-liberalism in general.

ALBA as an Alternative to "Free" Trade

Since the late 1990s, the US has been trying to secure a regional "free" trade agreement with Latin American countries, known as the Free Trade Area for the Americas (FTAA). In 2001, under the Chavez government's leadership, a number of Latin American states, trade unions, and social movements successfully banded together to block the FTAA. With this, the US state and its corporate allies' hopes were smashed. However, the Chavez government was not satisfied with blocking the FTAA -- it wanted to create a viable regional alternative to "free" trade. Under Venezuela's leadership, ALBA was born in late 2004.

Initially, ALBA consisted of only two member states: Venezuela and Cuba. When the benefits of ALBA became evident, however, other states joined. At present, there are four full member states of ALBA: Bolivia, Cuba, Nicaragua, and Venezuela. There are four observer states in ALBA -- Ecuador, Uruguay, the Dominican Republic, and St. Kitts3 -- who will become full members in the near future.4

ALBA rejects neo-liberalism and aims to forge a path away from "free" trade. ALBA itself has a wide range of guiding principles and has the following objectives:

  • To promote trade and investment between member governments, based on cooperation, and with the aim of improving people's lives, not making profits.
  • For member states to cooperate to provide free healthcare and free education to people across the ALBA states.
  • To integrate the ALBA member's energy sectors to meet people's needs.
  • To create alternative media to counterbalance the US and regional neo-liberal media and promote an indigenous Latin American identity.
  • To ensure land redistribution and food security within the member states.
  • To develop state-owned corporations.
  • To develop basic industries so that ALBA member states can become economically independent.
  • To promote workers' movements, student movements, and social movements.
  • To ensure that projects under ALBA are environmentally friendly

Already, a number of working committees have been established to meet the objectives with regard to health, education, culture, investment, trade, and finance. In doing so, the member states are working together to integrate their economies, so that they will be able to complement, rather than compete, with the one another.

In order to achieve these broad objectives, it is important that the peoples of the member states are involved in and direct ALBA. ALBA encourages popular participation in its planning and functioning. For that purpose, it has three councils that oversee its operations. The first two councils are the presidential and ministerial councils, while the third is made up of social movements. Though this, social movements have become directly involved in the planning and administration of ALBA. Currently, some of the largest social movements in Latin America -- such as the MST and Via Campesina -- participate in ALBA through this council. Their ideas about land redistribution, free healthcare, free education, and food security have become part of ALBA's goals. ALBA not only promotes participatory democracy in its own structures, it also commits member states to implement participatory democracy within their borders. The aim of promoting participatory democracy in ALBA sets it apart from the neo-liberal "free" trade agreements that are being foisted upon poorer states by the US and the EU. Indeed, ALBA's success hinges on its ability to fulfill its aim of participatory democracy.

ALBA has been in existence for only four years, and yet it has already recorded a number of successes. Since 2004, Venezuela has been exchanging oil for the services of 30,000 Cuban doctors and teachers. Under this deal, Cuba has received 1 billion dollars worth of subsidized oil a year, which has allowed Cuba to improve its economy. For Venezuela, this deal has allowed it to staff the thousands of new clinics and schools that it has built. This has seen Venezuela eradicating illiteracy and providing free healthcare to millions of people.

Cuba and Venezuela have also used ALBA's umbrella to create 5 major agricultural projects that are producing soy beans, rice, poultry, and dairy products. The goal behind these projects is to guarantee food security in both Cuba and Venezuela. In fact, Venezuela has used these projects to provide free or subsidized food to millions of people. Venezuela has also supplied Cuba with buses to improve its public transport system, assisted Cuba with the construction of a massive aqueduct to improve its water supply, and has helped Cuba revamp its main oil refinery.

Through ALBA, Venezuela and Cuba have also aided Bolivia. In 2006, the US stopped buying soy beans from Bolivia. To save Bolivia's soy industry, Cuba and Venezuela began importing soy beans from Bolivia under ALBA. Cuba has also been assisting Bolivia in expanding its public schools and hospitals. Cuba and Venezuela have moreover helped Bolivia upgrade its gas sector so that it can become self-sufficient in terms of its gas-derived energy needs.

Venezuela and Nicaragua have also implemented agreements of mutual assistance around social programs through ALBA. One of the biggest projects under this initiative involves Venezuela helping Nicaragua build eight centers that are aimed at providing housing and education to the country's 47,000 street children.5

Under ALBA, Venezuela supplies oil to St. Kitts, Haiti, and the Dominican Republic at discounted prices. These countries can pay off their oil bills to Venezuela in agricultural products, such as bananas or sugar. Added to this, an ALBA fund has been established by Venezuela for them. Money from this fund is used to improve public schools, healthcare, and other social services.

One of the major successes of ALBA has been the creation of alternative media. Through ALBA, a TV channel, Telesur, was launched in 2006 to service the entire Latin American region. Telesur provides news programs that are a counterweight to the neo-liberal media. A number of ALBA cultural houses, which promote indigenous and black heritages, have also been created in the member states. Through this, a Latin American identity based on solidarity and the indigenous past is being promoted to counter the growing influence of American culture and its individualistic values.

Under the ALBA initiative, a regional bank has also been created: the Bank of ALBA. The Bank has more than $ 1 billion in capital, which it uses to make loans available to member states in order to undertake infrastructural, health, education, and social and cultural developments. Loans from the Bank of ALBA do not contain any conditions and the bank is run on a democratic basis.6

Although ALBA represents a progressive project, it does have a number of contradictions. This can be seen in some of the projects planned under ALBA. One such project involved the construction of an oil pipeline from Venezuela to Argentina to supply cheap oil to Argentina. The problem was that the pipeline would have been constructed through parts of the Amazon forest and would have involved the destruction indigenous people's land. For this reason, a Venezuelan social movement, which is aligned with the Zapatistas, opposed the project. They pointed out that the construction of the oil pipeline violated ALBA's declared respect for indigenous rights and the environment. After a long battle with the Venezuelan government, the project was put on hold. What this highlights is that ALBA and the Bolivarian Revolution are contested terrains. As such, it is vitally important for progressive social movements to remain powerful and independent. Only through maintaining their independence can the social movements confront the government when it undertakes initiatives that are not in the interest of people or the environment.

Despite these contradictions, ALBA forms the basis of a move by a group of countries to gain economic independence from the US. As such, ALBA is a challenge to US imperialism. Perhaps even more important, ALBA offers real possibilities for future widespread alternatives to the current neo-liberal system. This means that ALBA is of great symbolic value. It shows that there is an alternative to neo-liberalism, which the governments of the South -- including those in Asia and Africa -- could embark upon. Thus, when we are told by the US, the EU, the IMF, and the World Bank -- and many of the governments in the South -- that there are no alternatives to neo-liberalism, we now know that this is a hollow lie. ALBA proves that

 

1 Foster, J. B. "The Latin American Revolt: An Introduction." Monthly Review. Volume 59 Number 3.

2 Chomsky, N. 2005. "A Dangerous Neighbourhood." Kaleej Times.

3 Carlson, C. 2007. "Bolivarian Alternative for the Americas Bank to Be Established This Year." Venezuelanalysis.com.

4 Marquez, H. 2007. "Activists Back Venezuela-driven Alternative Integration." Bilaterals.org.

5 Janicke, K. 2008. "Summit of the Bolivarian Alternative (ALBA) Concludes in Venezuela." Venezuelanalysis.com.

6 Janicke, K. 2008. "Summit of the Bolivarian Alternative (ALBA) Concludes in Venezuela." Venezuelanalysis.com.


Shawn Hattingh works for the International Labour Research and Information Group (ILRIG) in Cape Town.
Source: MRZine