by Julia Eder
The EU’s descent into a state of crisis has prompted several calls for its transformation. The problem is that these suggestions are often very vague. The aim of this chapter is to provide ideas for how a different kind of intergovernmental cooperation might be conceived. They are not intended as ready-made counter-proposals, but are to be taken as starting points for a debate on alternatives in Austria and Europe as a whole.
Within Europe, most of our knowledge about processes of regional integration has been shaped by the EU. Because of this, it can be difficult for us to imagine other forms of intergovernmental cooperation, let alone to implement them. Because of this, it is important to draw inspiration from different forms of cooperation in other parts of the world. One starting point could be the long tradition of South-South cooperation, or interstate cooperation between countries of the Global South.
A strategy of regionalism is defined as two or more states in a particular region coming together to organise their cooperation as a joint political project. While this can sometimes be confined solely to the economic or political level, it usually involves both. In some cases, it also incorporates social aspects.
if we work on the assumption that the EU represents “traditional” or “conventional” regionalism, what, then, might alternative regionalism look like? Essentially, the term “alternative” refers simply to something being “different than now”. As such, it does not imply a particular direction of change. With this in mind, a better way to explore the question might be to examine what prevailing forms of regionalism currently look like. At a general level, we have regional cooperation oriented primarily towards free trade and other forms aimed primarily at economic (sometimes also social) development. Mixed forms can also occur. In addition, the emphasis of such cooperation often shifts with changing times, as it has done in the EU.
The starting point for regional cooperation is usually a free trade agreement between several neighbouring states. They pursue a phasing out of tariffs and other barriers to trade in the regional bloc. Research on regionalism often uses a phased model that describes the characteristics of the individual stages. The fundamental assumption is that once regional cooperation has begun, it will inevitably progress towards becoming broader and deeper, with no reversal being planned or desirable. One reason for this is the unquestioned assumption that all participating stakeholders are benefitting from the project. In light of this assumption, issues of unequal distribution (and the resulting disadvantages) that affect individual groups or class factions within the participating countries are rarely spoken of. The issue of political right of co-determination is also rarely engaged with at this level.
Turning this argument on its head, it would therefore appear self-evident that alternative regionalism should not place a central focus on free trade, nor should it pursue solely economic goals. Instead, it should pursue economic development in conjunction with social goals and political co-determination. Yet even in today’s Latin America, most projects of regional cooperation are aligned with the European-influenced phased model. The Bolivarian Alliance of the Peoples of Our America (ALBA)1 is one exception to this trend.
The origins of ALBA
During the late 1980s and 1990s, various countries in Latin America were witnessing considerable waves of social mobilisation against neoliberal policies and their effects. Social movements rejected the US’s plan to enforce a centralised free trade agreement (a Free Trade Area of the Americas, or FTAA), while social movements from the two Americas organised themselves jointly as part of the Hemispheric Social Alliance. One of their achievements as part of this alliance was to develop the document “Alternatives for the Americas”, which was published in 2002 and demanded, among other things, fair trade instead of free trade relations. This concerted approach across various countries played a significant role in bringing the FTAA project to its ultimate demise in 2005. Later, ALBA heeded the long-standing call of the alter-globalisation movement to establish complementary, solidarity-based trade relations. In 2006, Bolivia, Cuba and Venezuela signed the “People’s Trade Treaty”, or “TCP” in Spanish. This treaty was partly inspired by the Bolivian concept of vivir bien – “living well”. Its principles were adopted by all ALBA states in 2009, whereupon ALBA became formally known as ALBA-TCP.
It is important to point out that the numerous electoral victories of Latin American left-wing governments from 1998 onwards were preceded by social mobilisation and struggles. As a result, the newly elected political representatives were required to build relationships with social movements that had not previously existed. When military officer Hugo Chávez won the elections in Venezuela in December 1998, he became one of the first candidates to fall into this category. Shortly after his victory, he began a progressive government project centred on redistribution and political participation. Cuba – which had been completely isolated within Latin America in the preceding years – was an important ally in these endeavours from 2000 onwards. In 2004, cooperation was consolidated under the “Bolivarian Alternative for the Peoples of Our America”, with “Alternative” being replaced by “Alliance” in 2009. Initially, the alliance consisted solely of bilateral agreements aimed at solving highly specific issues, such as the deployment of Cuban doctors and nurses in exchange for Venezuelan oil.
In subsequent years, left-wing governments came to power in other Latin American countries and joined the original members of ALBA. These countries included Bolivia (2006), Nicaragua (2007) and Ecuador (2009). Honduras joined, but withdrew following the right-wing coup in 2009 after just one year of membership. Several small Caribbean island states also signed up, namely Dominica (2008), Antigua and Barbuda, Saint Vincent and the Grenadines (both 2009), St. Lucia (2013) and Grenada and St. Kitts and Nevis (both 2014); these then received special forms of support from the other ALBA members, including preferential trading prices and their own terms of credit. It is for this reason that bilateral treaties are much more common than multilateral treaties amongst the ALBA countries, since they make it possible to offer optimal support to the weaker partners. As such, ALBA is a broad network based on shared principles. Within the network, the exact manner of cooperation is agreed upon at a micro level.
ALBA is often referred to as “anti-systemic” in theoretical works due to the fact that its actions are oriented against the prevailing economic system. The term “counter-hegemonic” is sometimes also utilised, since the alliance aims to neutralise the political and cultural dominance of the US and national elites. To this end, ALBA seeks to create a new type of solidarity on a regional level – not only by focusing on inter-state relations, but also by involving different social groups. In its capacity as a project of left-wing governments, this new model of cooperation focuses on the marginalised as the main beneficiary of its actions, with the economy being seen primarily as a tool for achieving social goals. However, this political orientation has also meant that the wealthier countries of Latin America, such as Chile, Argentina and Brazil, have refused to join. As a result of this, the countries of the ALBA group do not share common external borders. In addition, financing was and still is highly dependent on Venezuela.
Bases for cooperation
The political sphere
The highest body in ALBA is the Council of Presidents. Subordinate to it are the Political Council, the Social Council and the Economic Council. The relevant ministers of ALBA states are called in whenever these councils meet: the social ministers for the Social Council, the foreign ministers for the Political Council and so on. The Economic Council can be made up of industrial, economic, financial, trade, planning and/or development ministers. A Council of Social Movements exists at the same level to enable citizens to submit proposals on ALBA initiatives. All the committees make decisions by consensus; however, the functions of the Ministerial Councils and the Council of Social Movements are purely advisory in nature. Like the European Parliament, they are not able to sign agreements and, if they object to an agreement, they can only advise against it being signed by superordinate bodies. If they view a project in a critical light, they are sometimes required to carry out protests outside of the official ALBA structures. However, social movements in the region have not limited their work merely to protests and objections. The “Social Movements of ALBA” platform links social movements outside of the official ALBA framework and across the borders of member states.
Unlike the EU, ALBA has no permanent supranational institutions, but pursues an intergovernmental model of cooperation. This means that political decision-making bodies are made up of national governments and that the members swap in and out on a session-by-session basis. This is designed to ensure the political independence of the member states – an important value of Latin American politics since as far back as the War of Independence, especially because this independence is regularly threatened by the US. Permanently established supranational bodies tend to lose their connections with the populations they represent, become “entities unto themselves” and ultimately threaten national political sovereignty. At the same time, however, this setup depends very significantly on national balances of power. If a left-wing government is voted out, an immediate exit from ALBA will likely follow, as was seen in Honduras in 2009. A change of government in Venezuela would have particularly dramatic consequences, since virtually all progressive programmes are funded by rents resulting from its oil abundance. This is clearly not sustainable.
The social sphere
Collaboration within ALBA focuses on social goals. The basic needs of the population are to be secured, while poverty and social exclusion are to be reduced. This focus means that, in purely economic terms, the comparatively weaker countries benefit more from integration than their stronger counterparts (e.g. Venezuela). From a social perspective, however, all participants are able to draw significant benefits. A large number of social projects – so-called “Grand National Projects” – have been planned in order to exploit these benefits. They are currently being carried out in (or are set to be carried out) a number of socially important fields – not only education, health and culture, but also infrastructure, transport, telecommunications, fair trade, energy supply, food production, mining, industry and developmental finance (in the form of the Bank of ALBA).
Grand National Projects can sometimes be affiliated with Grand National Enterprises that facilitate the projects’ social goals. Examples from the food production and processing sector include Grand National Enterprises for fisheries and aquaculture, coffee production and food production. There is also the Grand National Enterprise ALBAFARMA, which distributes pharmaceutical products (often Cuba-produced) throughout the ALBA region at fair prices. Particularly on the small Caribbean islands, these initiatives have made it possible to achieve major improvements in the supply situation.
In this regard, it is particularly worth highlighting Cuba’s efforts and achievements. This Caribbean state, which has an excellent health and education system, provides its wide-ranging health expertise and excellently trained staff to countries with less well-established health services. Cubans working outside the country’s borders have the specific task of training their local partners such that these partners will be able to work autonomously after a certain period of time. Various billing models exist for this purpose and are selected depending on the financial strength of the partner in question. As part of its ALBA obligations, for example, Cuba sent medical personnel to Venezuela over a period of several years and was paid for this in oil. By March 2014, 2.8 million people from the ALBA area had undergone surgery to improve their eyesight, with the operations being mostly performed by Cubans and paid for by Venezuela. The literacy campaign “Yo sí puedo”, which was established in Cuba after the revolution, taught reading and writing to almost 3.82 million people in the ALBA area. It enabled a total of 1.17 million people to catch up on the primary education they had missed.
The economic space
It is important to note that focusing on social goals does not mean neglecting the economy completely. Only with a well-functioning economy can the basis for social change be achieved. However, ALBA does not compel each member country to specialise “rationally” according to their relative advantages and exchange the resulting goods among the bloc. The “Trade Treaty of the Peoples” is intended to achieve mutual complementarity, which only comes into play when goods cannot be produced or grown by a country on its own. In all other cases, local or national production takes precedence. A common goal is to limit the imports of third countries to as great an extent as possible.
Within ALBA, the intention is to reduce imbalances between states. This is viewed as a collective task and is achieved by applying different rules to different members in accordance with their level of economic development. Economically weaker partner countries are permitted to protect their economies more closely, for example through the unilateral application of import duties. This model is known as “Special and Differential Treatment” (SDT) and can also apply to a lesser extent to non-member states. In addition, ALBA countries struggling to pay for imports due to a shortage of dollar reserves can swap goods directly for other goods (Venezuela, for example, obtains foodstuffs including sugar and coffee from Nicaragua in exchange for oil). Another possibility is the use of the SUCRE currency – the ALBA system of regional payment compensation – in trade transactions. This renders the dollar superfluous as a medium of exchange, which also favours the weaker countries. Originally, the SUCRE was designed as part of a broader New Regional Financial Architecture (NAFR in Spanish), within which the 2009-founded Bank of ALBA was intended to serve as the main institution for development finance. Together with the “Bank of the South”, which has not yet come into operation, it aspired to challenge the dominance of the World Bank and the IMF.
In their intended capacity as rivals of transnational corporations, the above-mentioned Grand National Enterprises are yet further examples of different type of economics. They are required to be owned by two or more ALBA states and operate in every participating state, and their profits must be reinvested in their own operations or channelled into social programs. In addition, they are required to create new regional value chains that integrate private small and medium-sized enterprises and guarantee high labour standards. Most of these companies are planned to be financed by the Bank of ALBA.
Which factors could be relevant as we seek to establish a new European model of cooperation?
The purpose of this chapter is not to provide off-the-peg solutions, since effective solutions can only be developed in the course of broad societal discourse. Nor is it aimed at contrasting the successes and failures of ALBA and taking a subsequent position for or against transferring the model to Europe. The reason for this is that every region of the world has different requirements and options for cooperation. In its capacity as a South-South Cooperation, ALBA faces many problems that are not present or are only somewhat present in Europe. The EU has sufficient foreign currency reserves, modern technologies and several economically strong member countries; however, it lacks a fair distribution of resources. As such, actors in the EU must urgently seek to answer the question of how interstate cooperation can be organised such that vulnerable members of society are protected, not forced to shoulder the heaviest burden. In order to do this, we have an urgent need to stop thinking of nation states as homogeneous units. Brexit has reminded us that there are also marginalised and disenchanted groups even within the “winning” countries.
The examples given in this chapter illustrate clearly that there are various potential forms of intergovernmental cooperation, with the EU being just one example. Despite this, over the past decades, it has consolidated itself globally in people’s minds as the model of regional cooperation. Much knowledge has been squandered as a result. At the same time, there has been a lack of effort to propagate alternative models, or at least to do so in any kind of broad sense. Our task is now to fill these gaps.
- We must define new principles of regional cooperation. These principles must be aimed at mutual assistance with consideration for the needs of the weak and vulnerable, not free trade at all costs.
- We must learn from experiences of other regions of the world. The last hundred years have seen the development of many good ideas and, in some cases, entire models of alternative regional cooperation.
- We must consider the as-yet-unresolved question of adequate opportunities for co-determination in regional blocs. To this end, we must seek to develop participatory models of regional cooperation whose protagonists are not restricted to national governments and supranational institutions.
Azzellini, Dario and Eder, Julia (2016) ALBA – an alternative regional alliance? An outline. Rosa Luxemburg Stiftung Brussel Office.
Eder, Julia (2016) Trade and Productive Integration in ALBA-TCP – A systematic comparison with the corresponding agendas of COMECON and NAM. In: Journal für Entwicklungspolitik 32 (3), 91–112.
Hemispheric Social Alliance (2002) Alternatives for the Americas.
Alliance for an Alternative Trade Mandate (2013) Trade: time for a new vision. The Alternative Trade Mandate.
1This article is a translation of a German version written in the year 2016. Due to the current crisis in Venezuela, cooperation in the framework of ALBA has mostly come to a halt and many projects have never been started. However, the author of these lines (still) considers that some of the ideas on alternative cooperation promoted by ALBA could enrich the debate in the Left, pluralizing the currently euro-centric debate on (EU-)integration.