INTERNATIONAL RELATIONS

OF THE CARIBBEAN

Alternative integration in Latin

American and the Caribbean

Dr. Jacqueline LAGUARDIA MARTINEZ

New Regional Integration

ALBA

CELAC

UNASUR

New kind of regionalism

Globalization and the recent economical crisis attempt against traditionalintegration schemes and encourage the search of alternative integration

frameworks

Search for economic growth and national development out of the Washington Consensus formula: no fundamental gains in competitiveness

through liberalizing regional markets

Look for alternative strategies for regional integration, and equitable and sustainable development

Current regionalism is more than economic liberalization, although influenced by that process. It reflects different socio-economic conditions,

values and ideological positions. It emphasis cooperation and

complementarity

Strong institutionalization and proposal of real goals are indispensable In the region the integration map tends to become a real spaghetti ol

in which bilateral and su-regional agreements and institutions overlap

Common characteristics

Inclusion, cooperation, complementarity, extra

economic goals, emphasis on human development,

respect of differees, Conditioned by four main factors: 1. Dispersion and fragmentation of political interests

2. The role of energy resources

3. The coexistence of new conflicts with more

traditional

4. The wear of the integration processes in Latin

America

Itegratios eefits for the Cariea Possibilities to maximize national capabilities Proper diplomatic framework Unified regional voice Go beyond insularity and mistrust

Development assistance funds available Developmental regionalism South-South Cooperation

Bolivarian Alliance for the Peoples of Our America (ALBA)

2004, Alternativa Bolivariana para las Amricas, transformed in 2009 in Alianza Bolivariana de los Pueblos de Nuestra

Amrica - Tratado de Comercio de los Pueblos (ALBA-TCP)

Membership (9 Members): 2004 Cuba and Venezuela, 2006 Bolivia, 2007 Nicaragua, 2008 Dominica and Honduras, 2009

St. Vincent and Grenadines and Ecuador, Antigua and

Barbuda, 2013 Saint Lucia (Multiple membership of its

members)

Integration platform based on the cooperatives advantages of its members, in order to compensate asymmetries and

advance in developments goals out of the neoliberal logics

and based on endogenous dynamics

Purpose to join the capacities and strengths of the Member countries, in order to produce structural

transformations and the networks needed to achieve an

integral development

It is a political, economic, and social alliance in defenseof the independence, self-determination and the

identity of its peoples

ALBA does not harbor commercial criteria or selfish interests related to business profits or national benefit to

the detriment of other peoples

Solidarity, complementarity, justice and cooperation

What is ALBA?

ALBA Model

Explicit ideological component against the Washington Consensus (counter-hegemonic project)

Flexibility: special and differential treatment as a fundamental characteristic

Respect of sovereignty South-South Cooperation Regionalization of endogenous development State participation Facing asymmetries using complementarity criteria and

cooperative advantages and networks, creation of

productive linkages

1. Trade and investment must not be an end in itself, but instruments to reach a just and

sustainable development

2. Special and Differential Treatment

3. The economic complementarity and the cooperation between the participating

countries and non competition between countries and productions

4. Cooperation and solidarity that are translated into special plans for the least developed

countries in the region

5. Creation of the Social Emergency Fund

6. Inclusive development of the communications and the transport between the Latin-

American and Caribbean countries

7. Actions to enable the sustainability of the development by means of procedure, and which

protect the environment

8. Energy Integration between the countries of the region

9. Promotion of Latin American capital investments within Latin America and the Caribbean

10. Defense of the Latin-American and Caribbean culture and of the identity of the peoples of

the region

11. Measures for intellectual property norms

12. Coordination of the positions in the multilateral spheres and in the processes of negotiation

of all kinds with countries and blocks of other regions

Basic Principles

ALBA has four dimensions

SOCIAL POLITICALSOCIAL

MOV.ECONOMICAL

ACHIEVEMENTS NOT MAJOR RESULTS

ALBA Mechanisms

Grannational Projects: trade, finances, tourism, health, telecommunications, industry, mining, transportation, energy

Petroamrica: Petroandina, Petrosur and Petrocaribe Banco del ALBA ALBA Cultural: Casas del ALBA, Fondo Cultural del

ALBA, Premios ALBA Cultural and ALBA narrativa, TELESUR

Conditionalities of ALBA membership

1. Support for its general principles

2. Use of ALBA funding exclusively for the public

sector (government and state enterprises)

3. Orientation of projects and social cooperation

to disadvantaged socio-economic sectors of the

population

2007, Bank of ALBA

Credit policy: To finance cultural, healthcare, food security and education projects, reconstruction

funding (50 millions USD in Haiti)

Monetary policy: SUCRE (Sistema Unitario de Compensacin Regional de Pagos), hile sucre identifies the system Common Currency Unit (Unidad

de Cuenta Comn)

Development promotion policy XI ALBA Summit (2011): Each member will place the

1% of international financial reserves in the Bank of

ALBA (it represented 500 million USD in 2012)

ALBA TRADE RELATIONS

Non-reciprocity - Cuba agreed to grant duty-free access to Venezuelan imports and to remove non-tariff barriers; while

in return Venezuela has agreed to eliminate only non-tariff

barriers on Cuban imports

Compensated trade - through direct product exchanges Dominica is allowed to pay for 40% of its Petrocaribe oil

imports with exports of bananas

Trade agreements negotiated on a case-by-case basis, allowing for flexibility of commitment according to country

circumstances

Reciprocal Credit Arrangements Venezuela-Cuba Agreement

Trade using the sure (millions)Sistema Unitario de Compensacin Regional

Source: Centro de Investigacin de la Economa Mundial (CIEM), Cuba

2010 2011 2012

Operations 6 431 2.135

Value 12.6 216.0 700.0

In March 2013, Uruguay began using the sucre. It is

the first non ALBA member country to use the system

GRANNATIONALS It is an essentially political concept. Has several components:1. Historical and Geopolitical Basis: Focused on the Bolivarian vision of the

union of the Latin-American and Caribbean republics for the shaping of the

great nation

2. Socio Economic Basis: Based on the fact that the strategy for the development of the economies of our countries in order to meet the social

needs of the great majorities cannot only be restricted to the local sphere

3. Ideological Basis: It is determined by the conceptual affinity regarding the

critical conception of the neoliberal globalization and the need to break

the world trade patterns based on the free market fiction

Grannational Project: Program of action intended to comply with the principles and objectives of ALBA.It s implementation involves two or more

countries, for the benefit of the social majorities

Grannational Enterprise: Enterprises from the ALBA countries, whose productions will be fundamentally destined for the INTRA-ALBA market to

shape up a fair trade area, and its operation will be carried out efficiently

PETROCARIBE Created in June, 2005 Energy Cooperation Agreement to coordinate and articulate

energetic policies, including oil and oil-products, gas, electricity

and technological cooperation

Membership (18, 12 Members of CARICOM): Antigua and Barbuda, Bahamas, Belize, Cuba, Dominica, Grenada,

Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua,

Dominican Republic, St. Kitts and Nevis, Saint Vincent and the

Grenadines, Saint Lucia, Suriname and Venezuela

ALBA-Caribe Fund: It has been allocated 179 millions USD to 85 projects in 11 countries; 29 millions USD to 3 energy projects

Trinidad and Tobago and Barbados do not belong April 3-4, 2014: Meeting in Caracas regarding Plan de Accin

para la Erradicacin del Hambre y la Pobreza en la Zona

Econmica de Petrocaribe (more than 60 millions USD)

Petrocaribe pros and cons Oil supply in advantage conditions to the Members: lower

prices and facilities of payment (even more important in the

current global economic crisis)

To pay the oil bill with products and services stimulate domestic production and trade

ALBA/Petrocaribe provides public sector financing that, compared with conventional sources, is (i) low-conditionality

and host-country determined, (ii) low-interest and (iii) quick-

disbursing

However, the rising debts to PetroCaribe have generated debate about the long term sustainability of this strategy and

the imperative to balance it with other solutions to energy

security, such as increased investment in renewable energy

sources in the region

Operacin Milagro: 1,6 millions of persons

recover eyesight (until June 2009)

Literacy Program Yo s puedo (Yes I can): 3,8

millions new literate persons (until June 2009)

15,000 young people of low incomes study

medicine in Cuba and Venezuela (June 2009)

4,000 graduates in Cuba (Until August 2008)

ALBA Social Achievements: some figures

While traditional regional groupings experience evident stagnation, most Caribbean countries joined the Petrocaribe

initiative to combat difficulties of energy cost and availability.

Likewise, six countries joined ALBA. Both organizations easily fit

the labels of deelopetal regioalis ad outh-South ooperatio Cuba-CARICOM cooperation, ALBA and Petrocaribe have

considerably narrowed the gaps that existed between Latin

American and Caribbean understandings of regional spaces

and identities

ALBA and Petrocaribe have had a positive impact as providers of development assistance and social programs

Its funds have helped to alleviate the effects of economic crisis and provide some protection for vulnerable populations

In favor

ALBA economic sustainability

Favorable international prices for energy, minerals and agricultural products since 2003

Natural resources and agricultural sector (water and biodiversity)

Major State control over national natural resources and its exploitation

Financial mechanisms within ALBA

But Extractivism has eidet liits!!!!!

Presence of the US as main investor and trade partner in ALBA countries

Insufficient integration among the national economies (still compete more than complete)

Asymmetries among the ALBA Members Rentist model (oil and natural resources,

remittances)

POTENTIAL NEGATIVES OF ALBA

Donor dependency Energy dependency Economic vulnerability Political vulnerability State-etri, as opposed to grassroots or ouity-

based development

Capital intensive, potentially environmentally damaging projects

Transparency/accountability issues Potential for corruption

ALBA vs. FTA in Latin America and the Caribbean

ALBAFTA

SUCRE

Banco del ALBA

GrannationalsTransnationals

DOLAR

IMF, World Bank

PRENSA LATINA, TELESURCNN, ABC, NBC

ComplementarityCompetition

UNASUR / CELACOAS

Iterestig 11 of the 18 Caribbean countries that benefit from

Petrocaribe credits are non-members of ALBA

Non-members access loans from the ALBA Caribe Fund, from the ALBA Bank and from the ALBA Food

Security Fund; all three are financed by PetroCaribe

CARICOM non-ALBA beneficiaries of these programmes includes Bahamas, Belize, Grenada,

Guyana, Haiti, Jamaica, Suriname and St Kitts and

Nevis

Community of Latin American and

Caribbean States (CLACS/CELAC)

December, 2011: Foundational Summit in Caracas January, 2013: I CELAC Summit in Santiago de Chile January, 2014: II CELAC Summit in Havana

It is a forum that brings together 33 sovereign States of the region, which looks for the deepening of political, economic, social and cultural integration of Latin America and the Caribbean, based on full respect for democracy and human rights

http://www.youtube.com/watch?v=Jn0CAMBWRjo

II Summit CELAC: highlights

eogitio of the Uity i the Diersity priiple ad the construction of an space of dialogue and political coordination

Support of regional integration, sustainable development (climate change adaptation), indigenous and afrodescents rights, nuclear

dismantling

Latin America and the Caribbean as a Peace Zone Special mentions to Haiti and Puerto Rico upport Argetias lai oer Malvinas Condemnation of the USA blockade against Cuba Support the Colombian peace negotiations Establishment of a China-CELAC Forum and a Dialogue Mechanism

with the Russian Federation

Special Declaration on Small Island Developing States (SIDS)

CELAC PLAN OF ACTION 2014 Food security and nutrition and eradication of hunger and poverty

Family farming Education Culture and dialogue between cultures Science, technology and innovation Productive and industrial development Infrastructure Finance Latin American and Caribbean preferential tariff Energy Environment Post-2015 Development Agenda International humanitarian assistance in case of disaster situations Migration World illicit drug problem and addictions Struggle against corruption and its prevention Citizen participation Security of citizens Cooperation Regional and sub-regional integration mechanisms International policy

Created in 2008 Members (12): Argentina, Brasil, Uruguay, Paraguay,

Venezuela, Bolivia, Colombia, Ecuador, Per, Chile, Surinam,

Guyana

CAN: Bolivia, Colombia, Ecuador and Per MERCOSUR: Argentina, Brasil, Paraguay, Uruguay, Venezuela

and Bolivia

Goal: To encourage the regional integration in energy, education, health, environment, infrastructure, security and

democracy

To promote the development of an integrated political, social, cultural, economic, financial, environmental and

infrastructure space, recognizing the different ideological

conceptions, corresponding to the plurality of its Members

Union of South American Nations (UNASUR)

Bank of the South (Banco del Sur)

Established in 2009 by Argentina, Brazil, Paraguay, Uruguay, Ecuador, Bolivia and Venezuela

Goal: to lend money to nations in the Americas for the construction of social programs and infrastructure

Main functions: Financing basic infrastructure projects, support investments that strengthen the integration and

combat asymmetries. To provide technical advisory services

and training

An alternative to borrowing from the IMF and the World Bank

Equal representation of its Members Decisions are taken by consensus