Venezuela Pays for First ALBA Trade with Ecuador in New Regional Currency

Venezuelan President Hugo Chavez took a giant symbolic leap in the direction of Latin American independence on Tuesday when his government and that of Ecuador conducted the first bilateral trade deal between two ALBA countries using a new trading currency.


Caracas, Venezuela, July 7, 2010 (– Venezuelan President Hugo Chavez took a giant symbolic leap in the direction of Latin American independence on Tuesday when his government and that of Ecuador conducted the first bilateral trade deal between two ALBA countries using the new trading currency, the Sucre, instead of the US dollar.

The Unitary System of Regional Compensation (Sucre) is the currency the Bolivarian Alliance of the Peoples of Our America (ALBA) regional bloc adopted in 2009 so that member states could trade internally without having to use the US dollar.

Paying for goods with the Sucre will avoid the transaction costs incurred when using dollars on the international markets and encourage a more stable trading system, less impacted on by global economic conditions.

Ecuadoran President Rafael Correa explained, “It is a very simple concept: instead of using a currency from outside of the region to trade in goods and services, we use this compensation system where you pay in national currency to your respective exporters and in that way the international currency isn’t needed.”

Venezuelan Foreign Minister Nicolas Maduro said, “The moment has arrived to make the first step in the construction of the economic base that sustains social transformation” and “that frees our countries from poverty, backwardness.”

President Chavez added, “The implementation of the Sucre democratizes the economy in our countries, it allows us to advance towards freeing ourselves from the dollar, decoupling ourselves from the international hegemonic system.”

The first trade involved 15,000 tons of rice, sold to Venezuela from Ecuador. Venezuela paid 1.89 million Sucres (there are 1.25 Sucres to the dollar) for the rice.

Correa was in the Venezuelan capital Caracas with Chavez for the VIII quarterly bilateral presidential meeting that both leaders have committed to in order to strengthen relations between the two nations.

Correa spoke of the importance of the encounters, saying, “These meetings are very fruitful, we’ve managed to sign many accords, but not like those from before which were merely photo opportunities, now we make progress, drastic, efficacious and efficient change.”

Chavez explained the other items on the meeting’s agenda. “We were talking about creating Petrosur, that key aspect of regional integration, and the social missions, education and health,” he said.

Petrosur is a regional project promoted by Venezuela to integrate the oil reserves of Latin America and the Caribbean in order to implement a fair and sustainable energy policy for all. It foresees cooperation between the state oil companies of Argentina, Brazil, Uruguay, and Venezuela in order to achieve that aim.

Chavez also discussed the progress of a joint oil refinery construction project—the Pacific Petrochemical Complex—with Correa. The plant will be built on the Ecuadoran coast and is due to be completed by 2014.

ALBA is a regional integration bloc, begun by Venezuela and Cuba in 2004, in opposition to the neoliberal trade agreements the United States has pushed for in the region.

ALBA seeks solidaristic relations and trade among its member states to allow sustainable development and growth.

Its members are Cuba, Ecuador, Bolivia, Venezuela, Nicaragua, the Dominican Republic, Antigua & Barbuda and San Vicente & the Grenadines.

Venezuela and Ecuador Boast of Drug-Free Border with Colombia

Chavez and Correa also declared on Tuesday that their respective countries’ borders with Colombia were coca and drug free after both presidents had received reports from their respective security services.

According to Chavez, the Venezuelan army’s operation Sierra XXII 2010 has announced that, for the fifth consecutive year running, the border is clear of any kind of illicit drug operations.

The Venezuelan president also said that a crucial reason for the success of the operation was the expulsion of US anti-narcotics agents from the country.

“We broke with the DEA (U.S. Drug Enforcement Agency) because it was like a state within a state,” said Chavez.

Chavez went on to say that the DEA had installations in Venezuelan territory in which his government and security forces were denied entry. He also accused the DEA of money laundering and said that narco-trafficking was “supported by the DEA.”

Venezuelan Minister of Popular Power for the Interior and Justice, Tareck El Aissami, said that Venezuela’s fight against narco-trafficking had become much more “efficient” since the break with the DEA.

He said, “We have arrested 48 bosses from narco-criminal organizations and this is due to our policies on sovereignty once we broke with the DEA. These are irrefutable results in the this battle!”

Correa intervened, saying that, while Venezuela and Ecuador “don’t have to prove anything to anyone” in relation to their action against narco-traffickers, this does show what they were doing in the battle against narco-traffickers.

He also complained about a lack of state presence on the Colombian side of the border for fighting narco-traffickers, which he contrasted with the criticism Venezuela and Ecuador receive from the U.S. with regard to the fight against drug trafficking.