Bolivarian alliance for the peoples of Latin America (ALBA): South-South co-operation?

In the Diaspora

(This is one of a series of weekly columns from Guyanese in the diaspora and others with an interest in issues related to Guyana and the Caribbean)

D. Alissa Trotz

Alissa Trotz is editor of the Weekly In the Diaspora Column

Last week, I participated in a discussion in Toronto on the Venezuelan-led PetroCaribe and ALBA initiatives. PetroCaribe is a concessionary oil facility where a portion of the receipts from crude oil imports goes into a special fund to be used for social investment, and is available to 16 countries in the greater Caribbean. ALBA, created in 2004, is an integration arrangement that describes itself as a people-centred alternative to free trade integration models. St Vincent and the Grenadines and Antigua and Barbuda have signed statements of support while Dominica has acceded to ALBA. The 2008 summit was also attended by St Kitts-Nevis and Haiti.

In a news report in the Miami Herald in July, Sir Shridath Ramphal cautioned that ALBA “introduces some ideological dimensions which may not be shared in the region.” ALBA has caused some disquiet in the Caricom family, with Jamaica, Grenada and Trinidad and Tobago (itself an oil producer) voicing concerns. In Guyana there is discomfort in some quarters about Venezuela, given our long-standing border issue.

Jamaican economist Norman Girvan has argued that Caricom members’ participation in ALBA is not contrary to Article 80 of the revised Treaty of Chaguaramas, which allows for bilateral agreements that are non-prejudicial to the Treaty. ALBA participants are also involved in other regional economic integration groupings (Caricom, OECS, the Andean Group, Mercosur and CAFTA). Critically, ALBA consists of a statement of principles; it is not an international or intergovernmental organization, and does not have the usual features or binding agreements of a trade integration movement.

If there are misgivings about the recent ideological direction of so many Latin American countries that support ALBA, where significant shifts of power have come through platforms critical of neoliberalism and the Washington consensus, we should examine our relations with other parts of the world that do not appear to raise similar anxieties.

 If we consider the Caribbean’s experiences with North-South trade agreements, it is patently clear that they have consistently worked to the region’s disadvantage, even as they are euphemistically described as opening up a world of development possibilities for the Global South. Ugandan economist Yash Tandon, former executive director of the Geneva-based South Centre and the Founding Director of the Southern and Eastern African Trade Information and Negotiations Institute, describes what he refers to as diplomatic truths as a form of doublespeak: “Diplomatic truths…are ‘truths’ as negotiated between states in the global system of asymmetrically positioned power relationships. These truths may have little or only partial correspondence with ‘existential truths’ about reality on the ground. Those who have to make a living out of their impoverished resources may wonder in awe at the ‘diplomatic truths’ negotiated in their name by their representatives in the multilateral fora. Existential and diplomatic truths are two different things.”

This was most recently demonstrated in the negotiations for an Economic Partnership Agreement (EPA) between Cariforum countries (Caricom plus the Dominican Republic) and the European Union. The EU described it as a meaningful partnership, when the existential truth was that it reinforced our position as junior and highly unequal participants. Trade reciprocity was touted as pro-development, when the existential reality was that the Caribbean was being invited to participate in a game where the playing field was by no means level, and where the outcome can only be the deepening of highly asymmetrical terms of trade.

Two-way, duty-free concessions really mean unfettered access for European goods to markets in Africa (the big prize), the Caribbean and Pacific countries. Entering into new relationships with the 27 countries of the EU translated into divide and rule tactics that posed a real threat to the 79 African, Caribbean and Pacific countries that previously negotiated as a bloc but that were now being engaged by the EU as six regional groupings.

Regretfully, diplomatic truths were insufficiently interrogated at the time by most of the Cariforum countries. Few said that the emperor was wearing no clothes. When independent critics noted the contradictions and criticised the lack of genuine public consultations, they were pilloried by editorials in some of the Caribbean’s leading newspapers. And when Guyana’s President Bharrat Jagdeo suggested, on the eve of the initialing of the agreement, that the shift from preferential trade (under Lome and the Cotonou Agreement) to one of reciprocity would introduce a new set of challenges that the Caribbean is ill equipped to face, he too was singled out for criticism. Threatened with tariff imposition on our exports of bananas, sugar and manufactured goods if we did not meet the timeline of December 31, 2007, the Caribbean capitulated. Nearly two years later, other regions continue to negotiate. We were prematurely forced to the table at our collective peril.

ALBA emphasizes development, one that is people-centred and begins with the priorities of the Global South. It warrants our closer consideration because its initiatives offer a stark contrast with the guiding principles that shaped the EPA negotiations.

ALBA recognizes the need for differentiated treatment of countries according to their circumstances, through non-reciprocal and compensated trade practices. For example, an economically weaker country may be given duty-free access to another’s markets, without having to open its own fledgling industries to competition. Several smaller ALBA members are also permitted to pay for a significant percentage of their oil imports from PetroCaribe through product exports. PetroCaribe funds have led to important investment in refineries and electricity generation in Latin America and the Caribbean. As Girvan has noted, PetroCaribe is the largest single source of concessional finance to the Caribbean, with credits estimated in the region of $468 million/year in 2005-2007, compared with US foreign assistance to the Caribbean for the same period totalling $340 million/year, or $149 million/year if we exclude Haiti, which continues to suffer the indignities of what is essentially an occupation.

Co-operation in the provision of social services and human resource development are key to ALBA and the mandate for the newly created ALBA Bank and the ALBA Caribe Fund. In the face of rising food prices, a meeting was held in April 2008 that led to a decision to create a network of food trade and an ALBA food security fund. These are key issues for the Caribbean which has one of the highest food import bills in the world, and where many have warned that regional food security and production are likely to be further threatened under the free trade principles of the EPA. There appears to be low-conditionality attached to loans, and far less interference in a country’s domestic affairs than is usually the case with traditional donors.

So far, there seems to be less distance between diplomatic and existential truth when it comes to ALBA. The short end of the stick that the region was left holding as a result of the EPA process demonstrated the need to put the question of South-South relations squarely on the table. ALBA offers an opportunity for hemispheric co-operation that is at least worth exploring, and that we have perhaps not seen since the decade of the 1970s, the period that produced Develop-ment Alternatives With Women for a New Era which included women from Asia, Africa, Latin America and the Caribbean, as well as calls for a New International Economic Order. One cannot help but find it ironic that Cariforum countries could negotiate as a bloc (and ultimately to the disadvantage of the region’s peoples) with Europe, but that we seem to not see the necessity of a co-ordinated regional approach to ALBA and our neighbours in this hemisphere. Clearly colonial ties remain the easier path to follow. It takes vision and daring to break out of accustomed habits and forge different kinds of relationships, connections that can ultimately allow us to stand with a voice from the South that is stronger because it is multiplied and collective.