News Focus
ALBA: A new kind of bank
WORKERS, MAR 2008 ISSUE
With the capitalist world's banking system apparently on the edge of collapse, a quite different story is emerging across the Atlantic. New banks are being established to help Latin America and the Caribbean to become independent of the US, the IMF and World Bank and to move towards forms of integration based on respect for national sovereignty.
Members of ALBA, the Bolivarian Alternative to the Free Trade Area of the Americas (FTAA), met in Caracas, Venezuela to establish the ALBA Bank. The President of the Cuban Central Bank, Francisco Soberon, announced "In the face of international financial turbulence, the ALBA Bank guarantees stability and sustainability." Soberon emphasised that "the bank is emerging at a time when the world is more than ever witnessing capitalism's lack of viability." The ALBA bank will allow improved structuring of the financial policies of ALBA members – Venezuela, Bolivia, Cuba and Nicaragua – and to help develop sustainable social, agricultural, energy and industrial programmes. President Daniel Ortega of Nicaragua commented that the ALBA Bank "will bring mutual benefits for our countries. For instance" he said, "Nicaragua is ready to use the bank to support farming programmes at home to supply Venezuela with milk and beef."
The ALBA Bank follows the establishment of the Caracas based ‘Bank of the South' by Venezuela, Argentina, Brazil, Paraguay, Uruguay, Bolivia, Ecuador and Colombia. The Bank of the South will offer loans without the strings attached by the International Monetary Fund or the World Bank. Despite the fact that both Nicaragua and Colombia have free trade deals with the US, the concept of these banks, and in particular ALBA itself, is gaining ground in the region with Ecuador, Dominica, Antigua, Haiti and many others queuing up to join. Even Iran wants to join as an observer, with its foreign minister describing ALBA as "a development and cooperative model based on principles of solidarity and mutual respect among the countries that belong to it".
These are somewhat different values then to capitalism's banking system, based on greed and profit. As Cuban foreign minister Felipe Roque said referring to the health, social care, media and energy programmes of ALBA, "We are building the road. In Latin America and the Caribbean, there are 33 countries, and almost 500 million inhabitants, with a very significant GDP. If we act in a united way we can be a great force. The results of the ALBA programmes are already visible in our countries. It is not a theoretical discussion and it's not a document to store away in a drawer. These are concrete programmes that benefit our countries."