While browsing the OAS News Clips page today, I saw an interesting article headline that read, “Diputados del FMLN afirman que proyectos Alba seguirán con Chávez o sin él.” I found this, along with the contents of the article to be very interesting, namely, because I am still not entirely sure what ALBA (Alianza Boliviarana para los pueblos de Nuestra América) actually does in terms of concrete economic policies.
The telling line in the article is toward the end when a FMLN (Frente Faribundo Martí para la liberación nacional, the main leftist party in El Salvador) deputy admits that he personally does not know how either ALBA or firms working with it operate, but affirms that it is necessary to maintain it and protect it from its detractors from the right. Part of why he is unable to be more specific about how ALBA functions is because, by and large, it doesn’t do much. A quick perusal of its website finds a lot of links to positive news about the various member states and their leaders, but precious little information about actual programs or even plans for programs that are less than three years old (and many of those are simply dead links). Even the few proposals that do exist are full vague references to economic solidarity and complementarity but little on how they would go about actually achieving these goals.
As it generally functions right now, ALBA is totally unsustainable and of little mutual economic benefit. The biggest program operated under its auspices is PetroCaribe, which is essentially an arrangement where Venezuela sells subsidized oil to allied countries in exchange for the political benefits it gives to the Venezuelan government in those countries. While it is certainly beneficial to those countries to receive cheaper oil than what they would be able to get on the open market (especially when they receive more than they consume and can sell the rest at market prices, like Cuba does), it encourages them to remain more oil-dependent than their economies can actually afford to be. It also is totally unsustainable from a Venezuelan standpoint. A decade of selling subsidized oil, at home and abroad, has been a major contributor to Venezuela’s declining production. Rather than selling the oil at market prices and reinvesting in new technology and other training in its oil sector, Venezuela is instead effectively spending that money to buy political support outside its borders.
Like much of the non-OPEC international economic diplomacy Venezuela has led under Chávez, ALBA is more for show than actual results. ALBA may be directing some investment within its member states and increasing some trade, but mainly it is a way to initiate show projects that offer little long-term economic value to the countries involved, as the comments from that FMLN deputy inadvertently make quite clear.