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WHAT IS THE ALBA?

The ALBA (Bolivarian Alternative for Latin America and the Caribbean) is a different proposal of integration. While the ALCA (Free Trade Agreement for the Americas) responds to the interests of transnational capital and pursues the total liberalization of trade and investments, the ALBA emphasises the struggle against poverty and social exclusion, and therefore represents the interests of Latin American peoples.

The ALBA is based on the creation of mechanisms that can compensate the existing asymmetries between the various nations of this hemisphere. It also draws on the existence of compensatory funds that can address the disparities which put weaker countries at disadvantage against larger powers. The ALBA gives priority to Latin American integration and to the negotiation of relevant issues by regional blocks. It should be then possible to identify common interests which will allow us to create strategic alliances. The challenge lies in preventing sister nations from splitting up under the pressure to accept the FTAA.

The ALBA is a proposal focused in building consensus and rethinking integration agreements in a way that allows for national and regional endogenous development. The ALBA aims to eradicate poverty, correct social inequality and guarantee an increasing standard of life. ALBA’s proposal subscribes to the movement of social awareness that has led to the emergence of new political, economic, social and military leaders in the region. More than ever before, it becomes essential to work towards Latin American and Caribbean unity. The ALBA, being a Bolivarian and Venezuelan proposal, joins forces with the movements, organizations and national campaigns that resist the implementation of the FTAA across the continent. In short, the ALBA is a manifestation of the historical decision adopted by the progressive forces of Venezuela to demonstrate that another America is possible.

What is the role of endogenous development in the ALBA?

The neoliberal concept of access to the markets is confined to a set of measures which reduce customs duties and eliminate any obstacles to trade and investments. The so-called free trade only benefits countries who are largely industrialised and developed. Research has clearly shown that the application of free trade and globalization guidelines have in fact ended with the aspirations of many countries of the continent to accomplish real endogenous development.

Transnational integration agreements should be subject to endogenous development objectives. The limited diversification of regional offer predicts that the FTAA will fail to bring about the type of development that reconciles economic growth with quality of life and well being for the peoples of the region.

The number of investments and exports may indeed grow, however, as long as these are based on the exploitation of the workforce in assembly plants, no real benefit will be experienced. This kind of growth will not help relaunch the agricultural and industrial sectors, let alone generate the high quality employment needed to defeat poverty and social exclusion. Consequently, an alternative proposal based on solidarity is needed. The objective should be to help weaker countries overcome the disadvantages which set them apart from the hemisphere’s richer countries. This does not only depend on the changes that may occur at government level; it also depends on the exhibition of solidarity between peoples and their determination to address social asymmetries. It is only within these conditions that free trade can be a win-win opportunity for all those involved.

Agriculture and the ALBA: much more than producing goods

The principal industrialised countries have regulated the implementation of protectionist policies and the reduction of agricultural subsidies. This can never be accepted as a condition of free trade. Agricultural activity is fundamental for the survival of many Latin American and Caribbean nations. A flood of imported agricultural goods would seriously affect the quality of life of millions of farmers and indigenous peoples.

It must be stated that agricultural production is much more that the production of goods. It is a way of life. It constitutes the basic foundation for the protection of cultural diversity, it affects the distribution of land, defines our relationships with nature and it is directly linked to issues of national security and alimentary sovereignty. It cannot be treated just as any other economic activity.

The Constitution of the Bolivarian Republic of Venezuela states, in its article 305, that “the State will promote sustainable agriculture as the strategic foundation of rural development. The State guarantees the nation’ alimentary security, that is, it guarantees the sufficient and stable supply and availability of foodstuffs nationwide, and the appropriate access by the consumers”.

Alimentary security can be achieved by developing and privileging internal agricultural production. Foodstuff production is a matter of national interest and fundamental to the economic and social development of a nation. To that end, the State will dictate the appropriate financial and commercial measures, it will have a say on matters of technological transference, land tenure, infrastructure, training of the workforce and any others that are deemed necessary to achieve strategic levels of self-sufficiency.

Moreover, the State will initiate actions within the framework of national and international economic policy, in order to compensate for the disadvantages intrinsic to agricultural activity. We must understand that poverty and marginalisation are often concentrated around rural areas whose subsistence is based on agricultural activities. These peoples are the most severely affected by imbalances affecting the negotiation of agricultural activities, and would be worse off if key elements of such negotiations continue to be excluded.

The alimentary security enjoyed by the developed countries of the hemisphere is the result of half a century of policies that systematically subsidised the kind of agriculture that creates price distortion in the world market. Moreover, these countries insist in limiting the scope for action of less developed countries, effectively denying them the right to alimentary security. The situation would continue to be imbalanced even if subsidies were stopped today, as weaker countries lack the infrastructure and technology that result from years of subsidised activity.

For all these reasons, Venezuela sees with great concern the ongoing FTAA negotiations that focus on agricultural production. Paradoxically, at the start of the negotiations in 1998, the treaty of San Jose clearly stated that the goal consisted of “eliminating subsidies to agricultural export, and being more strict with any other practices which affect and distort agricultural trade in the hemisphere”. It was also agreed that “negotiations would start simultaneously and involved parts would agree to a single undertaking which respects the mutually agreed rights and duties”.

However, and from the beginning of the negotiations, the United States were reluctant to negotiate subsidies to agricultural exports and other related practices which have the same detrimental effect on agricultural produce. This exemplifies the double standards held by the great powers of the continent towards developing countries. They oppose the development of public policies targeting internal growth, while giving away subsidies which only favour their own productive apparatuses. Their insistent stance on this subject goes against the principles and objectives that conform the FTAA, being these principles and objectives the only reason why we also took part in the negotiations.

This issue was subject of the debate at one of the last cabinet meetings in Quito, where all participating countries recognised “the importance of agriculture to the economies of the region. Only by respecting the principles of the FTAA and by not applying discriminatory practices the free trade agreements will help create employment, reduce poverty and facilitate social stability”. The participating countries asserted their “compromise to eliminate subsidies to exports and any other equivalent practices which affect agricultural trade. Our evaluation and involvement in the FTAA negotiations will depend on the progress attained in other matters that also belong to the agricultural agenda”.

The treaty was ratified by the Commercial Negotiations Committee during their meeting in Puebla, Mexico, where they instructed the Agricultural Negotiations Committee to “intensify debates in all aspects of their agenda, particularly in those affecting subsidies to exports and any other equivalent practices, without exception and without anticipating the results, in conformity with the treaties of Buenos Aires and Quito”.

From the analysis of the negotiations that have taken place since last November, we can deduct that the United States is not willing to guarantee our demands relating to agricultural subsidies. Likewise, they have shown their reticence to work towards a regulation in the conditions of agricultural loans, to review their agricultural exports’ insurance programmes, and have not taken any step towards the reduction of internal incentives in agricultural matters.

Meanwhile, many countries have been urged to eliminate agricultural custom tariffs, and they have agreed despite the enormous challenge that this represented. Unfortunately, their willingness to negotiate agricultural matters has been pointless considering the non compliance of the United States, which still today refuses to eliminate subsidies to their own agricultural sector.

It is therefore obvious that these negotiations are marked by a significant imbalance and that can only be reflected in the final result. We cannot accept such an imbalance. We cannot accept that agricultural policy consists exclusively of developing countries forced to eliminate custom tariffs, while the principal powers of the hemisphere refuse to remove subsidies and internal aid.

It is known that the United States assign thousands of millions every year to support their export and agricultural sectors. This creates important distortions in the price of agricultural products. Even if Latin American nations eliminated custom tariffs on their exports, it would be impossible for them to compete with subsidized prices. This is how Latin American countries are denied effective access to regional markets. Subsidized products constitute a form of unfair competition in our internal markets, and if we were to eliminate custom tariffs, our disadvantages would become even deeper.

Our countries lack the financial resources that developed nations devote to agriculture, but we have the political tools needed to fight against the effects of unfair competition. Yet, we have been required to eliminate these political tools too, as a condition to participate in trade negotiations.

The very size of our economies puts us at disadvantage. Our markets mean little to the expansion of agriculture in developed nations; but the smallest movement made by larger powers entails a price crash in our economies and the impossibility to support large sectors of our population. If developed countries refuse to eliminate subsidies and other equivalent measures because they fear they will lose revenue, they have no right to demand that we give them free access to our markets. We can only negotiate their access to our agricultural markets once there is a true compromise on behalf of the agricultural powers of the world, to eliminate subsidies and internal aid. It is only at that point that we can determine to which degree they should be granted access to our markets.

Intellectual property rights, or the rights of nations to medicine and quality food?

Intellectual property is another area in which the conflicting interests of international corporations and poorer countries become evident.

A vast regime of intellectual property rights has been created by appealing to the so-called “issues affecting trade”. This has been detrimental to the countries of the South. Despite initial resistance, the countries of the North imposed a compulsory and global regime of intellectual property protection, based on their demands and on the requirements of multinational pharmaceutical corporations.

Within the general framework of imbalanced relationships between North and South, the advantages of the North are particularly evident in scientific and technological areas. The international regime of intellectual property is strategically positioned to accentuate the imbalance. The system protects the strongest countries while leaving unprotected the areas in which the poorer countries of the South have a real advantage: the genetic biodiversity of their territories and the ancient knowledge of indigenous and farming communities.

Prior to the start of the negotiations, there were over 50 countries that did not count with any form of legal protection over the patents of their pharmaceutical products. As a result, their internal markets were easily supplied with generic medicines sold at low prices. A price comparison survey carried out in India pointed out that the prices of medicines supplied by countries that enforce their pharmaceutical patents could be up to 41 times higher than those of countries without this system of intellectual protection. India’s pharmaceutical industry is a thriving business which encompasses over 20,000 companies, produces high quality medicines that are easily accessible to millions of people with low income levels, and plays a key role in the generation of employment. But this situation has started to radically change, in India and in the rest of the world. The intellectual property agreements proposed by the World Trade Organization force all countries to develop a patent system to strictly guarantee intellectual property.

It is easy to see that generic medicines have no future. The agreements signed constitute a monopoly of rights within which pharmaceutical corporations are allowed to wipe out any competition and charge prices beyond the possibilities of millions of people. Several studies have predicted the significant price increase likely to take place as a result of the patent system. They have also predicted a notorious reduction in consumption, since large sectors of the population will be left with no access to expensive branded medicines.

Take Egypt, for example: the introduction of pharmaceutical patents drove the prices up by six. Small and medium sized pharmaceutical companies tend to go bankrupt and the monopoly held by large multinationals grows bigger and stronger. Currently, 80% of patents on genetically modified food are in the hands of 13 multinationals, and 5 largest chemical corporations control the global seed market.

The ‘freedom of trade’ imposed to farmers by multinational interests is causing a reduction in the genetic variation of the main crops. This reduction, together with an engineered and heavily controlled view of agriculture, diminishes the self-adaptation ability of ecological systems and impedes their natural regeneration.

The large range of patents currently existing is a result of the global regime of legalized bio-piracy, whose basis lies in the expropriation of knowledge and resources that belong to other peoples of the world. Some cases are particularly shocking, like the patent that covers the active ingredients of the neem tree, a tree that has been widely used by Indian population during many centuries.

It is obvious that intellectual property rights constitute a critical issue for the present and future of mankind. They encourage the concentration of power and serve to accentuate the characteristic hegemonic tendencies of globalization.

How to face liberalization, de-regulation and the privatization of services?

The FTAA proposes a set of unilateral rules which will apparently regularise international trade. The real objective however, is the liberalization, de-regulation and progressive privatization of essential social services, which after all, should be guaranteed by States and governments.

The process of liberalization would affect a wide range of services: health, education, social security, drinking water, transport, post, municipal services, the environment, culture, natural resources, etc. Liberalization would restrict State intervention and its ability to enforce measures intended to regulate services. There would be no controls on labour legislation, consumer protection, no guidelines on the granting of permits, no limitations on access to markets, economic measures etc. Once again, free market theories are manifest. They advocate for an unrestricted opening of the markets claiming it would benefit developing countries, allowing them to improve the quality and quantity of the services their citizens need.

Latin America and Venezuela’s recent history is riddled with violent waves of privatization which have affected all sorts of services, from aeronautical transport to telecommunications and electricity. The consequences of surrendering those services to the free market are clearly visible: monopolies and oligarchies dominate market practices and provoke a rise in prices and a drop in quality; millions of jobs are destroyed and public services and resources are dismantled and/or dilapidated.

The FTAA intends to accelerate the intensity of liberalization and privatization processes and extend these to essential services that constitute an obligation of governments with their citizens. These services would be handed to private companies, effectively transforming citizens into simple consumers, who, not having resources to pay for privatized services, would be excluded from their use. Only multinationals would benefit from the FTAA’s proposal of liberalization, as they would turn public services around the world into private markets. The worst hit would be of course the poorest and more socially excluded sectors of the population. Through extensive liberalization, lucrative businesses would have free access to public resources and would do away with existing regulations. This would translate into the complete destruction of public services in developing countries.

The apparent bad quality of public services has been severely criticized, and this critique has had an impact in certain sectors of the population who, having been deceived, accept that those services currently managed by the State would be more productive if they were privately owned. While we do not deny the need to improve the efficiency of public services, it would be foolish to believe that privatization and liberalization are a universal remedy. Part of the solution could lay in identifying tax evaders whose actions prevent the allocation of financial resources to the improvement of public services. But it is unacceptable that the deterioration of those services is used as an excuse to justify processes of privatization that facilitate the expropriation of essential public services at the hands of multinationals.

The assumption behind liberalization is that this practice would unleash competition and therefore improve the efficiency of services, which would become highly developed and benefit consumers by saving them money. But just after a decade of extensive liberalization and privatization, it is obvious that the objective is the generation of corporate benefit and the global expropriation of public services.

The Bolivarian Government of Venezuela is firmly opposed to the processes of liberalization, de-regulation and privatization, as they limit the capacities of the State to design and implement policies focused on defending the right of the peoples to access good quality and reasonably priced public services. For this Government, public services exist to satisfy peoples’ needs, not as an object of trade and economic profit. Therefore, the provision of these services can never be subject to profitability criteria, but to social interest. In fact, these services represent one of the most significant social rights ever obtained, and they are indispensable if we want to end social inequality. The provision of social services must be governed by the individual’s social needs, and not by his ability to pay for them.

If the National Treaty proposed by the FTAA is enforced, the liberalization process will have catastrophic consequences. The treaty demands that multinational corporations are given the same privileges of small companies and local cooperatives, while banning measures that show preference for local production, or that discriminate against foreign companies. We must also be wary of the demand for “access to markets”, which forbids nations from restricting the incursion of foreign service providers in liberalized sectors of the economy. The intention of multinationals is to subject developing countries to their dictates, stripping them from their right to demand sovereignty and social justice.

Compensatory funds for the correction of asymmetries within the ALBA

As part of the process of construction of the ALBA, Venezuela proposes the creation of Compensatory Funds for Structural Convergence. The objective is to significantly reduce the asymmetries existing in the levels of development of the nations involved. The mechanism of compensation must be guided by concrete socio-economic goals, appropriately established deadlines and follow-up systems.

As a starting point, we need a reliable way to measure the asymmetries existing in the region. Venezuela suggests that we need to agree on specific terms and definitions, in order to facilitate the development of effective strategies. We have identified a group of socio-economic variables that will help in identifying those economies in higher need of assistance, so that eventually they can also compete in fair conditions with countries in the free trade area.

Within the ALBA, the varying levels of development and the size of the economies involved are an issue of maximum priority. Some proposals aimed to address this issue involve:

In stark contrast with the FTAA, which aspires to the intensification of existing differences, the ALBA is equipped with specific proposals and mechanisms aimed to overcome the inequalities between and within nations. Due to its nature, the project of Latin American and Caribbean integration is fully committed to solve this issue.

The ALBA’s governing principles:

From neoliberal integration to a Bolivarian alternative for the Americas and the Caribbean

“There was never in America, from the day of its independence to this day, a matter requiring such a degree of common sense, awareness and detailed examination, than the abuse perpetrated by the powerful United States against less powerful American nations, filling these countries with unmarketable products and determined to extend their dominions in the continent” Jose Marti

Copyright © por ALBA .:Alianza Bolivariana para los Pueblos de Nuestra América:. Derechos Reservados.

Publicado en: 2009-04-29 (2477 Lecturas)