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Breaking imperial ties: Venezuela and ALBA
by Tim Anderson
In late 2005, while war raged in the Middle East and oil prices rose drastically, governments and oil companies repeated the “market forces” mantra, saying there was nothing they could do about oil prices. However, the Venezuelan government-owned, US-based petrol distribution company Citgo (with eight refineries and 14,000 petrol stations across the US) decided to discount up to 10% of its US sales, so that poor families in cold-weather US states could have access to heating oil over the northern winter. Citgo sold over 40 million gallons of oil to 150,000 poor US households at a 40% discount. [Chavez has since offered to spread similar agreements to Europe and has announced an agreement to provide cheap heating oil to the poor in London.]
Venezuela is the first country since Cuba to have broken with the neoliberal model in Latin America. The influence of the Venezuelan example is spreading, through its influence on social and political movements, and through the growth of agreements aimed at a new form of economic integration between Latin American nations.
ALBA
Venezuela has promoted a model of Latin American economic integration that it refers to as the Bolivarian Alternative for the Americas (ALBA), which is directly counterposed to the US-pushed neoliberal Free Trade Area of the Americas (FTAA). ALBA represents a challenge to the imperial domination of trade and investment in the Americas. These heterodox trade and integration agreements between six Latin American countries (Venezuela, Cuba, Argentina, Uruguay, Brazil and Bolivia) also represent the most practical alternative to relationships generated by the neoliberal model. Because Venezuela and Cuba are currently leading ALBA, there is a preference for shared institutions and public (or joint-venture) investment. In other words, there is a socialist tendency.
The Cuba-Venezuela agreements, formalised in late 2004, give the best view of what this alternative could mean. The two countries agreed that ALBA relationships would be based on principles of “just and sustainable development”, “special and differential treatment”, guaranteed access to benefits, “cooperation and solidarity”, “energy integration” between countries, more regional investment and reduced reliance on foreign investment, a special emergency fund, measures to protect the natural environment, and defence of Latin American, Caribbean and indigenous cultures. They also agreed to support a continental anti-imperialist television station (Telesur) as an alternative voice to present “our realities”.
The practical aspects of the Cuba-Venezuela agreements comprise elements of barter exchange, liberalisation and integration with a socialist flavour. The exchanges reflect Cuba’s strength in human resources and Venezuela’s oil and oil refinery capacity. Cuba gives Venezuela a minimum of 15,000 health professionals, 2000 general tertiary scholarships and additional uncapped medical scholarships over ten years. In return, Venezuela gives Cuba oil at a preferential price (a minimum of $27 a barrel plus agreed market premiums), transfer of energy sector technology and finance for infrastructure and energy projects.
Both countries agree to treat each other’s publicly owned planes and ships as if they were their own, in terms of servicing and maintenance. They agree to drop all bilateral tariffs and trade barriers, to give preference to investments from “state and joint-venture” operations in the other country and to share sports facilities.
Collaboration has been extended to aid projects, such as the Cuban-run Mission Miracle, which provided more than 200,000 free eye operations in 2005 for those with curable blindness in Latin America and the Caribbean. In Venezuela, the government transports the patient, along with one companion, to Cuba for the operation.
Two other regional agreements initiated by Venezuela are Petrosur and Petrocaribe. For the latter, Venezuela provides Caribbean nations with fuel at a 40% discount rate. A Latin America-wide public bank, Bancosur, is to be created. Cuba’s Henry Reeve Brigade has been set up (after Hurricane Katrina) to provide rapid response emergency medical assistance after disasters. The US did not accept the offer, but the brigade has been accepted with gratitude by Guatemala and Pakistan.
The nine integration and cooperation agreements signed between Venezuela and Argentina, in January-February 2005, commit the two countries to Telesur, technical cooperation over oil, health, hospitals, health sciences and social sciences, and to exchanging ship-building facilities for oil preferences. New agreements that Cuba and Venezuela have made with Bolivia appear mainly as forms of aid, to help Bolivia with health and education, along with supplies of fuel (200,000 barrels per month) and technical assistance to develop its own oil and gas reserves. At a later stage, Chavez says, Bolivia can provide in exchange its soy products and meat.
The ALBA agreements provide new models of aid, south-south trade, cooperation and symmetrical integration, and back the claims of Chavez that the FTAA is “dead and buried”. The FTAA was proposed by then-US President Bill Clinton in the mid-1990s, as a US-dollar denominated “free trade” zone from Alaska to Tierra del Fuego. It was Washington’s attempt to counter the rising economic power of a united Europe.
The US has such agreements with Mexico and Chile, and a provisional agreement with the Central American group of countries; but most of Latin America was not impressed. Even important US allies (Mexico, Colombia and El Salvador) joined the dissent at the 2003 WTO talks, rejecting new agricultural and investor rights proposals.
In this context, the “south-south” ALBA agreements have filled a gap. As Chavez puts it, Latin America needs integration, but not the type of integration suggested by neoliberal globalisation. It must be “liberating integration, not integration through neocolonialism and neo-dependency ... [We must have] integration for freedom and equality.”
Complaints about “economic injustice” now form part of the neoliberal attack on ALBA. While US oil companies complain of the “unfairness” of subsidised/lower-profit Citgo oil, private supermarkets in Venezuela complain of the unfairness of subsidised/lower-profit sales of basic goods by the state-owned Mercal chain. This is the root of US attempts to destabilise Venezuela — a genuine contest between socioeconomic models, and of different views of regional integration.
Abridged from Green Left Weekly, March 29, 2006.
People's Trade Agreements deepen solidarity
by Stuart Munckton
In an April 28-29, 2006 meeting in Havana, Cuban President Fidel Castro, Venezuelan President Hugo Chavez and Bolivian President Evo Morales signed the “Agreement for the Application of the Bolivarian Alternative of the Americas [ALBA] and the People’s Trade Agreements”. The treaty commits the countries to developing a “strategic plan” to integrate their economies along mutually beneficial lines with an emphasis on “social inclusion, resource industrialization and food security, in a framework of respect and preservation of the environment”. The countries agree to exchange technology. Control over technology is a key way imperialist nations maintain a competitive advantage over Third World countries.
Each country agrees to offer special assistance to the others along the lines of their expertise. For instance, Venezuela agrees to use its experience in the oil industry to help Bolivia develop its still-weak state-run energy industry, while Cuba makes available its expertise in health care and education.
The agreement commits the nations to working towards eradicating illiteracy and spreading free health care throughout Latin America, along the lines of the Cuban-supported programs that have eradicated illiteracy and brought free health care to many of the poor for the first time in Venezuela. The agreements also pledge to strengthen cooperation in the fields of sport, culture and communication, with Bolivia agreeing to join Telesur, the Venezuelan-initiated Latin America-wide television station, as a partner.
The direct counter-position between ALBA and the model pushed by the US that give multinationals greater access to markets and resources, was starkly revealed when Venezuela and Bolivia condemned the Free Trade Agreements signed by Peru and Colombia with Washington in April. A statement issued on April 26 by the Venezuelan government claimed that the interests of producers and consumers in the region were threatened by the FTAs and pointed to the impact on health care, claiming “The FTA negotiations benefit a handful of pharmaceutical multinationals”. The statement claimed that “4400 AIDS patients per year [will] no longer be able to access anti-retroviral drugs. They [will] be condemned to die within five years.”
From Green Left Weekly, May 10, 2006.
