Venezuela's Petro-Diplomacy: Hugo Chávez's Foreign Policy

8. ALBA, Petrocaribe, and Caricom: Issues in a New Dynamic

8 ALBA, Petrocaribe, and Caricom Issues in a New Dynamic Norman Girvan The growth of relations between several Caricom states and the Venezuelanpromoted ALBA and Petrocaribe initiatives is one of the most significant recent developments in regional affairs. An immediate issue that has arisen is whether membership in ALBA conflicts with the obligations of Caricom membership. Larger issues of a strategic nature include the need for diversification of economic relations in light of global economic restructuring; pursuit of opportunities for South-South cooperation that are more advantageous to the region than standard North-South arrangements; and the scope for a coordinated Caricom external trade policy. Although ideology and hemispheric geopolitics come into play in any discussion of ALBA and Petrocaribe, it is important to frame the issues within a regional optic rather than from the point of view of Washington. ALBA, in addition to having its own special characteristics, can be seen as one manifestation of a process of reconfiguration within the world political economy, a process marked by a relative decline in U.S. power and the emergence of new geo-economic poles of influence. The rise of Asia, and in particular China and India, is among the most significant of these changes, as is the emergence of other regional powers in the global South, such as South Africa , Brazil, and Venezuela. One notable consequence is the waning ability of the United States to control the course of events in Latin America and the Caribbean. As a recent report published by the Washington-based Council on Foreign Relations noted, “The era of US hegemony [in the region] is over.”1 ALBA, Petrocaribe, and Caricom: Issues in a New Dynamic 117 The signs of this shift are everywhere. The Free Trade Area of the Americas (FTAA) process has stalled over Brazilian opposition to Washington’s terms for the negotiations; governments opposed to the neoliberal “Washington Consensus” have come to power in several countries; the Cuban Revolution is about to celebrate its 50th anniversary despite Washington’s obsession with regime change in that country; the Bolivarian revolution in Venezuela continues apace; and the traditional Washington-dominated sources of development cooperation are being overshadowed by Southerncontrolled institutions centered on Venezuela and Brazil. At the continental level, a South American Union (Unasur) is being constructed under Brazilian leadership. These developments form an important backdrop to a consideration of the role and significance of ALBA and of Caricom’s relationship with the grouping. This chapter examines the nature of ALBA’s mission and program, focusing on the kind of cooperation arrangements that are likely to be of particular interest to Caricom countries. It reviews the scope and magnitude of financial cooperation, the existence of non-reciprocity, the scope of social cooperation, the role of Petrocaribe, and the recent incorporation of food security into the ALBA cooperation program. The discussion includes the content of ALBA agreements from the point of view of the treaty obligations of Caricom members and reaches the conclusion that there is no inherent incompatibility between them. Also considered are the potential economic and political vulnerabilities of participation in ALBA and Petrocaribe, with suggestions as to how these might be mitigated. Finally, this chapter emphasizes the value of coordinated Caricom policies on ALBA and other external economic relations, and discusses the difficulties of agreement in a community with divergent interests among its members. The ALBA Mission The Bolivarian Alternative for the Americas, or ALBA, presents itself as an alternative to the U.S.-sponsored neoliberal model of economic integration based on trade and investment liberalization.2 ALBA claims to put the basic needs of the population and the reduction of poverty above private profits and the rights of private investors. The guiding principles of ALBA integration are said to be solidarity, complementarity, compensatory financing for the treatment of asymmetries, and differentiated treatment of 118 Norman Girvan countries according to their circumstances. In practice, ALBA’s cooperation has consisted mostly of concessional financing for the relief of energy import bills, state-owned industries, and physical and social infrastructure ; support for health and education projects that directly benefit the poor; and non-reciprocal trading arrangements. ALBA has grown significantly since it was launched by Venezuela and Cuba in December 2004. Bolivia, Nicaragua, and Dominica have acceded, and St. Vincent and the Grenadines and Antigua and Barbuda have signed statements ALBA Principles and“Rules” 1. Trade and investment are to be instruments of...