Explainer: What Is ALBA?

Updated, August 1—The Bolivarian Alliance for the Americas is a regional bloc that aims to foster integration and cooperation among Latin America and Caribbean countries. Known as ALBA for its Spanish name (La Alianza Bolivariana para los Pueblos de Nuestra América), the group emerged as a joint agreement spearheaded by the late Venezuelan President Hugo Chávez and then Cuban leader Fidel Castro. ALBA has grown from two to eight member countries since its creation almost a decade ago, accounting for 10.4 percent of Latin America and the Caribbean’s GDP.

AS/COA Online explains the origins and goals, membership, and organizational structure of this regional bloc.

Explore by section:

• Origins and Goals
• Members
• Organizational Structure and Projects
• Summits
• After Chávez: The Future of ALBA

Origins and Goals

Named for Latin American independence figure Simón Bolivar, the bloc was originally called the Bolivarian Alternative for the Americas. Chávez initially proposed the alliance in 2001 at the Third Summit of the Heads of State and the Government of the Association of Caribbean States as an alternative to the U.S.-backed Free Trade Agreement of the Americas. ALBA defines itself as a political entity with a mission that promotes “solidarity, complementarity, justice, and cooperation” in order to unite member strengths, and outlines 12 principles that focused in the fields of economic development, social welfare, natural resources, and energy cooperation.

On December 14, 2004, ALBA was officially created after Chávez and Castro signed the Joint Declaration in Havana, Cuba. The bloc added the Peoples’ Trade Treaty (TCP) upon Bolivia’s incorporation in 2006, and changed its name to the Bolivarian Alliance for the Americas in 2009, retaining its acronym. The TCP emphasizes that there are “no bosses, only partners” via specialized tariff policies that favor smaller economies, as opposed to a one-size-fits-all free-trade agreement.

Members

ALBA has eight member countries with a combined population of 70.6 million and GDP of $557.6 billion, as of 2012.

The following countries are full members of ALBA: Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines, and Venezuela. Honduras was also a member, joining in 2008 under President Manuel Zelaya, but withdrew in 2009 after Zelaya’s ouster. At the eleventh Summit in February 2012, ALBA granted the ascension of Suriname and St. Lucia as guest members—a prerequisite for full-fledged membership. Haiti, an observer since 2007, was confirmed as a permanent observer during the summit and has also expressed interest in becoming a full member. Iran and Syria are observers.

Organizational Structure and Projects

A number of councils make up the alliance, which plan, coordinate, and advise on various topics that determine the function and flow of ALBA.

Structure:

• The Presidential Council is the most powerful council in the alliance, made up of heads of state from each country. The Council is responsible for the highest levels of decision-making for the alliance.
• The Political Council comprises foreign ministers from each member country, and is tasked with advising the Presidential Council on strategic policy issues.
• The Economic Council consists of ministers appointed by member countries within the fields of economy, finance, trade, and development. Members coordinate strategy, policy, and projects related to an “economic area of shared development” within ALBA. Working groups play an important role, and cover areas such as energy, food safety, technology, commerce, and infrastructure.
• The Social Council incorporates ministers that manage social areas in their home countries, and seeks to provide oversight for work related to education, health, employment, and culture.
• The Social Movements Council is the “principle mechanism that facilitates integration and direct social participation” in ALBA. This Council is responsible for articulating the social movements of member and non-member countries.

Projects:

While success is mixed, ALBA has advanced several social development programs called Grand National Projects.

• Telecommunications: Created in 2005 as a “counterweight” to CNN, TeleSUR is a Spanish-language regional news outlet headquartered in Venezuela, its main funder, with contributions from other members. Its broadcast reaches beyond Latin America and the Caribbean to parts of Europe and Africa.

• Banking and Finance: Venezuela founded the ALBA Bank in 2008 with $1 billion in capital. Seeking to serve as an alternative to the IMF or World Bank, the institution does not impose loan conditions. The bank supports agriculture production, energy cooperation, and has invested $170 million in social programs related to education, culture, and health. During ALBA’s eleventh summit in 2012, member countries agreed to contribute 1 percent of their international reserves into the bank to fund development projects.

  In 2009, the bloc introduced the sucre, a virtual currency that would be used for trade between members and put it into effect the following year. Short for “Unitary System of Regional Compensation,” the electronic currency would also circumvent the use of the U.S. dollar. Transactions are conducted between central banks. This year, member countries made 1,500 transactions worth 550 million sucre, or $670 million. Though it’s not a member of ALBA, Uruguay requested entry into the system to use the regional currency in March 2013.

• Oil: In 2005, Chávez established Petrocaribe, an oil trading bloc through which Venezuela supplies Caribbean members oil at reduced rates. Petrocaribe and ALBA are separate entities that have some overlap of member countries, but plan to become closer. In January, the Venezuelan government announced plans for an “economic zone” between ALBA-TCP and Petrocaribe. The proposed zone’s objectives would advance investment, trade, tourism, and development projects between member countries of both groups.
• Social Programs: According to an official Venezuelan press statement, the ALBA Bank has invested $170 million in social programs. These initiatives range from elementary school education programs in Bolivia, Dominica, and Nicaragua to scholarships for cultural research and art exhibitions.

Summits

Since its inception, ALBA has held 18 summits, with the most recent held in February 2012 to discuss projects and decide on trade agreements. Heads of government met on July 30 in Guayaquil, Ecuador to discuss economic integration and food sovereignty issues, in addition to indigenous and Afro-descent populations in member nations. Venezuelan President Nicolas Maduro and Ecuadoran President Rafael Correa convened before the summit for the first bilateral meeting since Chávez’s death.

After Chávez: The Future of ALBA

In a memorial letter to Chávez after his death, ALBA pledged to continue its “Unionist work.” But the post-Chávez outlook for the alliance is uncertain. In the Spring 2013 issue of Americas Quarterly, Executive Director of Focus on the Global South Pablo Solón notes that “the key to progress in Latin America is not ALBA itself, but rather the continuity and enhancement of the social movement against neoliberalism—of which ALBA is one expression.” In order to survive, he notes,“ALBA’s leadership must act more collectively to maintain the alliance’s forward progress.” Gregory Weeks, professor and chair of the Department of Political Science & Public Administration at the University of North Carolina at Charlotte, countered that “ALBA’s longevity will depend on both the will of the Venezuelan president and the strength of the Venezuelan economy.” But, he added: “With a high probability of flagging enthusiasm for ALBA both at home and abroad, and without Hugo Chávez’ guidance, there is little reason to believe it will continue in any consequential manner in the late president’s absence.”

With a void after Chávez’s death, some observers wonder if Correa will try to assume leadership of the bloc. However, as Center on Global Prosperity Senior Fellow ÁlvaroVargas Llosa points out in Foreign Policy, Ecuador lacks the funds and oil exports to be able to subsidize other countries. Correa himself said in May that he does not wish to become a regional leader, explaining that he has enough work to do in Ecuador.