Global Insight Perspective

Significance

The Bolivarian Alternative for the Americas (ALBA) Summit concluded with a series of co-operation agreements bringing its member states closer together and yet again positing Venezuelan President Hugo Chávez as a key driver of the anti-imperialist and anti-neoliberal alliance.

Implications

The ALBA has now progressed towards some form of institutional foundations with the creation of joint presidential and ministerial councils, moving forward with integration resting on the ideological belief that "alternative" and social development models—as a counterweight to U.S.-led policies—are the way forward.

Outlook

The ALBA for now remains little more than a political expression of anti-imperialist and anti-neoliberal feelings, but yesterday's progress is a timid yet steady step for the bloc to materialise as a more economic and co-operative scheme, with possible enlargement in sight in the shape of Ecuador teaming up with current members Cuba, Bolivia, Nicaragua, and Venezuela.

Institutionalising the ALBA

The Summit of the Bolivarian Alternative for the Americas (ALBA), held in Venezuela, concluded yesterday with the joint Barquisimeto declaration, which set the foundations for the institutionalisation of the bloc spearheaded by Cuba and Venezuela, and now comprising Bolivia and Nicaragua too. The member states agreed on the creation of three sets of "councils": presidential, ministerial, and social movement. The councils will be responsible for the cohesion of the group and will push forward with "alternative"—i.e., non-neoliberal—economic, political and social agendas. The next step will be to decide on the location of the bloc's headquarters.

The accords also provide for the introduction of bloc-specific mechanisms, also with an anti-imperialist slant, that will give an additional alternative and independent edge to the scheme. Notably, the bloc has decided to establish its own arbitration system to counter the World Bank (WB)'s International Centre for Settlement of Investment Disputes (ICSID), which its members see as working for foreign corporations. The declaration has provisions for the four countries to exit the ICSID—a development that should be monitored by foreign investors operating in those countries.

"ALBA Energy" and 'ALBA Bonds"

Beyond institutional novelties, Venezuela's President Hugo Chávez also announced the advent of new policies for the bloc. On the energy front, ALBA allies are now guaranteed a 50% discount on supplies of energy from Venezuela. Haiti, whose President René Préval also attended the summit as a representative of a non-member country, is also to benefit from the plan. It offers more favourable terms than the current PetroCaribe initiative, which provides a 40% discount on Venezuelan oil. Additionally, Chávez suggested the allocation of an exclusive zone within the heavy-oil Orinoco belt, where ALBA members could exploit crude under the mixed-company model . The Venezuelan also put forward the idea of issuing "ALBA bonds" to finance the debts of member countries, and finally advocated the creation of an "ALBA Fund"—once again with the aim of creating alternative regional institutions to counter-weigh the influence of the International Monetary Fund (IMF) and the WB.

Turning Attention to Venezuelan and Cuban Hot Topics

The Summit was also a platform for Chávez to call attention yet again to a series of issues close to his heart—and that of the Cuban regime too. A U.S. judge's order to release on bail terror suspect Luis Posada Carriles was criticised once more, the ALBA nations joining in the condemnation in the joint declaration. This traditional call was accompanied by the equally traditional statement from Chávez that Cuban leader Fidel Castro is "well" and has returned to assume many of his key responsibilities. Chávez waved a letter to the audience, supposedly drafted by his Cuban counterpart, where the latter hails Chinese "market socialism" that will turn the Asian country into a great power.

Chavez’s comments continue to feed the ongoing speculation regarding the full return to power of President Castro in light of his recent appearances, although the revolutionary leader failed to attend the Summit. From a more domestic perspective, Chávez also warned against withdrawing from the Organization of American States (OAS) should the organisation condemn his government for not renewing the RCTV channel's broadcasting licence upon its expiry at the end of next month. The issue has dominated local politics in Venezuela, but it has also sparked concerns amongst international organisations and regional partners over a possible setback for freedom of expression in the country.

Outlook and Implications

ALBA Enlargement in Sight?

Ecuador's Foreign Affairs Minister María Fernanda Espinosa and Haiti's President Préval were the most high-profile guests at the ALBA Summit—both countries exploring the scheme's progress, and eyeing their possible incorporation into the bloc. Préval in particular is casting the net wide in his search for aid and cross-border co-operation to boost impoverished Haiti. Keen not to alienate one of his largest donors—the United States—he will likely try to keep his distance at the meeting, yet seek to grab all the benefits he can. As for Ecuador, it would be no surprise for the country to team up with its leftist and ideologically close partners Chávez, Evo Morales (Bolivia), Daniel Ortega (Nicaragua) and Castro—hints to that effect have repeatedly been made. Representatives from Uruguay and other Caribbean nations also took part as observers of the Summit.

The markedly leftist and anti-imperialist bloc has emerged as an anti-neoliberal alternative to the now abandoned U.S.-administration-led "Free Trade Area of the Americas" (FTAA). As of 2007 the idea that another model—or at least that a blend of orthodox and alternative policies—would be more beneficial to Latin America's needs have gathered pace, with the suggestion of alternative banks, as well as the creation of stronger dynamics for regional integration.

The ALBA is another facet of this enhanced ideal—though it is undeniably a much more strident socialist and anti-U.S. version. The series of agreements signed at this latest summit boost the ALBA alliance and suggest tightened co-operation between its member regimes, making the bloc unlikely to fade away any time soon. Energy will once again form the base from which the bloc can grow, but multiple—yet costly—projects are also now in the pipeline to bring member states closer together, and as such, draw them further away from the United States.