ALBA, an Economic Alternative for Latin America

The sixth conference of the Latin American alternative trade alliance known as ALBA-which stands for the Bolivarian Alternative for the Americas and means "Dawn" in Spanish-was held in Caracas on January 25-26. The brainchild of Hugo Chavez and Fidel Castro, ALBA was founded by Cuba and Venezuela in 2004 as a fair trade alternative to US-backed free trade policies and is made possible thanks to Venezuela's oil money.

When Evo Morales was elected in Bolivia and Daniel Ortega in Nicaragua, they too joined ALBA, which Chavez has nicknamed the Club of "Chicos Malos", or bad boys, because of its opposition to U.S. domination. At this weekend's meeting, the Caribbean island of Dominica also joined, and representatives attended from Ecuador, Honduras, Uruguay, Haiti and several other Caribbean nations.

Chavez opened the session talking about the need for a trade system that addresses people's needs, not corporate profits. His railed against the "dictatorship of global capitalism", and encouraged Latin American countries to withdraw their international reserves from United States banks, warning of a looming US economic crisis. "Why does that money have to be in the north?", he asked. "We should start to bring our reserves back home."

His thoughts were echoed by Daniel Ortega, who blamed the capitalist system for the environmental crisis. "The capitalist model of development is simply unsustainable," Ortega declared. "If your economy is controlled by speculative capital that only cares about profits, you can't solve the huge problems affecting humanity. Once we renounce the free trade model, we can begin to address the massive problems of unemployment, poverty and global warming."

Bolivia's Evo Morales, who is facing fierce opposition in part because of his efforts to nationalize natural gas and oil, insisted that key public resources such as land, water and energy should not be for private profit but for the common good. He also insisted that Latin America should not look to the United States for solutions, since U.S. aid always comes with strings designed to increase its hegemony.

"In 1990s, the World Bank and the International Monetary Fund imposed their disastrous policies, and then the U.S. tried to impose the Free Trade Agreement of the Americas-which should really be called the Free Profits Agreement of the Americas because it is meant to increase the profits of US corporations," said Morales. "But people of the hemisphere rejected that agreement, so now the U.S. is trying-country-by-country-to get bilateral trade agreements. They are always trying to divide us, but we salute the great resistance to empire that we see throughout the hemisphere."

The leaders noted that it was no coincidence that just at the time of the ALBA summit, Condoleezza Rice was visiting neighboring Colombia to promote a U.S.-Colombia Free Trade pact. Chavez, who recently called Colombia's President Urribe a "sad peon of the empire", laughed at U.S. accusations that he, Chavez, was facilitating the flow of Colombian cocaine through Venezuela.

The talk of drug-smuggling turned into comic relief, however, when Chavez launched into a discourse on the benefits of the coca leaf, which, he insisted, was very different from cocaine. U.S. officials have long tried to eradicate coca cultivation, which has been grown and chewed by Andean Indians for centuries.

"Speaking of drugs," Chavez turned to Bolivian President Evo Morales, who is himself a former coca farmer and is a strong defender of the coca leaf, "where are the coca leaves you used to bring me?"

A Bolivian Indian sitting behind Morales got up and offered up his personal stash of coca leaves. Delighted, Chavez took a leaf and put it in his mouth. "The sacred leaf of the Inca, the Aymara Indians," he declared. "Thank you, brother." Emphasizing the great qualities of coca, Chavez said that he had become used to chewing the leaves every morning and invited the other heads of states to try some.

The laughter reached new heights when Chavez welcomed Prime Minister Ralph Gonzalez of St. Vincent and Grenadines to the Club of the Bad Boys and asked, in broken English, "Do you want some coca?" Imagining the headlines back home, the Prime Minister politely declined. "I'm a good Catholic boy who only occasionally associates with bad boys," he joked.

The meeting turned serious, however, when it came time to sign economic agreements. Nicaragua, for example, pledged to help supply milk, corn, beans and beef to Venezuela, while Venezuela will sell Nicaragua oil under preferential terms to Nicaragua. Cuba has an agreement to send doctors to Venezuela in exchange for oil discounts.

The most significant moment of the summit was the announcement of the creation of a regional development bank intended to strengthen their alliance and promote independence from U.S.-backed lenders like the World Bank. The ALBA Bank will be started with $1 billion to $1.5 billion of capital. Venezuela, with its plentiful oil earnings, will be the leading financier. The funds will go toward joint efforts from farming projects to energy ventures, such as hydroelectric energy using Dominica's abundant rivers and Nicaraguan technology.

Chavez and the leaders of six other South American countries last month launched a similar venture, the Bank of the South, which is projected to have as much as $7 billion in startup capital and offer loans with fewer strings attached than those given by the World Bank or the International Monetary Fund.

A major question about the future of ALBA is whether more countries will join to give it more clout. Ecuador and Haiti, for example, would like to join but are facing strong internal opposition. Several small Caribbean nations attending the meeting mentioned how difficult it is to counter attacks by the conservative media. "The principles of ALBA-solidarity, non-interference, respect for independence, complementarity instead of competition, fair trade-they are like motherhood. You can't be against them," Prime Minister Ralph Gonzalez of St. Vincent and Grenadines reasoned. "But when you start to add names-Chavez, Castro, Ortega-people get scared. So we have to educate our people before we can become full members."

Dominica, a nation that defied elite pressure by joining ALBA, was already facing the backlash. "While we are here talking about ways to improve the lives of our people, the conservative media is talking about economic ruin, communist influence, Iranian takeovers, an end to tourism," tourism minister Ian Douglas told me. "We will weather the storm, but it's not going to be easy."

One way to get around such government pressure is to allow the participation in ALBA of social movements throughout the hemisphere. At last year's summit, the ALBA Council of Social Movements was formed with representatives from farmers groups, women, environmentalists, unions and other civil groups. But there were unresolved questions over how to structure the Council, so this year, only the social movements in the four member countries were invited. The Council, however, proposed expanding membership.

"The best way to strengthen ALBA is to include social movements from throughout the hemisphere," said Joel Suarez of Cuba's Martin Luther King Center, one of the five movement reps from Cuba to attend the Summit. "Governments may be pressured not to join, but the social movements are anxious to be part of an alliance that promotes fair trade over free trade." Indeed, the proposal is to even include social movements from the United States. Venezuela is already working with U.S. groups and local governments to provide discount heating oil to poor U.S. communities.

With ALBA countries, particularly Bolivia and Venezuela, facing strong internal opposition, improving the population's economic well-being is critical. The future of progressive victories in Latin America rests on turning the rhetoric of fair trade and sustainable development into concrete gains. This year will be a critical test of whether Venezuela's oil money can indeed be used to develop an alternative economic model.

Medea Benjamin was an invited guest at the ALBA Summit. Global Exchange organized monthly people-to-people delegations to Venezuela and other ALBA countries.

Join Us: News for people demanding a better world

Common Dreams is powered by optimists who believe in the power of informed and engaged citizens to ignite and enact change to make the world a better place.

We're hundreds of thousands strong, but every single supporter makes the difference.

Your contribution supports this bold media model—free, independent, and dedicated to reporting the facts every day. Stand with us in the fight for economic equality, social justice, human rights, and a more sustainable future. As a people-powered nonprofit news outlet, we cover the issues the corporate media never will. Join with us today!

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.