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Two paths in the face of the capitalism’s global fracture

Some of the presidents of the ALBA bloc.

By Luis Bilbao, translated from the December 2008-January 2009 issue of America XXI by Federico Fuentes, for Links International Journal of Socialist Renewal. Luis Bilbao will be a featured international speaker at the World at a Crossroads conference, in Sydney, April 10-13, 2009.

Two presidential meetings were held in November in the face of the international financial collapse and the ominous warning signs it represents for the future of humanity. The first, convoked by US President George Bush, brought together the Group of 20, G20, in the National Construction Museum in Washington. The second meeting, initiated by Venezuela’s President Hugo Chavez, united the countries that make up the Bolivarian Alternative for the Peoples of Our America (ALBA), and met in the Ayacucho Salon in Miraflores Palace.

In the capital of the empire the G20 agreed upon an erratic document lacking any precise definitions, except the common aim of propping up capitalism and correcting what different heads of states classified as “excesses resulting from the lack of regulation”. In Caracas, after diagnoses that expounded the graveness of the systemic crisis and its structural character, transcendental economic and political measures were adopted, such as the creation of a common monetary zone, the decision to put an end to the hegemony of the US dollar in international trade, and defence of a multipolar world.

If Bush could boast about having attracted China, Brazil and Argentina to his meeting of imperialist powers, the ALBA meeting concluded with a dinner where the Russian head of state dropped by: a clear outline of the new global political map that the crisis is beginning to draw up.

It would be over the top to call it the “Ayacucho of the 21st Century”. But the spirit of Antonio José de Sucre, the victor of the final battle against the Spanish empire, was present in Miraflores Palace on the morning of November 26, when the heads of state of Cuba, Venezuela, Bolivia, Nicaragua, Dominica, Honduras and Ecuador, accompanied by minimal committees, began an unusual debate for these types of meetings. So much so that, seven hours later, following a heated battle of ideas, characterisations and proposals, the heads of states and governments approved the creation of a common monetary zone and gave birth to the Sucre, currency which will act as an instrument for trade, and which moreover is the name of a new mechanism created: the Unitary System of Regional Compensation. (In Spanish the new mechanism is called Sistema Unitario de Compensación Regional, which when abbreviated becomes SUCRE.)

The III Extraordinary Summit of the Bolivarian Alternative for the Peoples of Our America-Peoples Trade Agreement (ALBA-TCP) was not just one more of the countless presidential encounters held over the last few years. Not only because a different climate reigned amongst the participants, removed from formalities and diplomatic nonsense, but because in line with the features that characterise them, Hugo Chávez, Ricardo Cabrisas, Evo Morales, Daniel Ortega, Roosevelt Skerrit, Manuel Zelaya and Rafael Correa sought out and found responses to the crisis which is shaking the planet from a perspective not only autonomous, but frankly opposed to that held by the imperial centres.

Siren without voice but with power

The true significance of the decisions made at the ALBA meeting become clear when we take into consideration the presidential encounter in Washington. To classify the meeting of the G20 as a vain gesture of an outgoing president of the United States is to leave aside its real strategic objective. The vagueness of the final document is explained by the obvious impossibility of finding a clear response – much less a common one – to the capitalist collapse. Nevertheless, it is debateable whether the organisers’ objective had been to emit a proclamation of imperialist principles. The unusual convocation had another purpose. Due not to the impulse of a unpopular president lacking power like never before in the history of the United States, but rather the decision of the strategists in the State Department, who have their sights set on an objective of a strictly political nature: impede China and Latin America lining up in the direction of the formation of regional financial subsystems and entering into the new international scenario opened up by the crisis with action plans independent of the will and the interests of the G7 (United States, Germany, Japan, France, Canada, Italy and Britain).   

The siren call of the US dollar no longer has the capacity to enrapture the marines that accompany Ulysses in the stormy sea of the disordered financial system. Nevertheless, it has a sufficient gravitational pull for some helmsmen to divert their boats from the path to Itaca in order to redirect themselves towards the mortal reefs surrounding the White House. The real balance of the G20 Summit consists of the fact that China, Brazil and Argentina took up Bush’s invitation (the rest of the countries in the group, above all India, Mexico, Saudi Arabia, Indonesia and South Korea, for the moment do not see the danger of moving out of the orbit of Washington).

In some ways, the result of the encounter was conclusive regarding what the State Department was seeking. China is conditioned by the very grave effects of the world recession on its economy and threatened like nobody else by the eventual final collapse of the dollar. It is unlikely that the photo of Hu Jintao standing alongside Bush will guarantee that Beijing and Washington will walk side by side in the period to come. The same goes for Brazil, whose economy suffers more than any other in South America and faces extreme risks as of 2009. Brazil’s President Lula smiled uncomfortably at the support of the wandering ghost that still occupies the White House. For its part, Argentina, doubly hit by the detonation of the economic crisis and the political weakening of the government due to causes of another nature, guarantees everything except firmness behind a definite path.

Nevertheless, all this cannot act to obscure the relative success of the imperialist strategists: looking only at this hemisphere, with the exception of ALBA, none of the regional bodies have met to take into consideration the issue of the crisis and design a common response. The Union of South American Nations (UNASUR), a recent formidable conquest in the direction of South American convergence, remained mute and paralysed, likewise Mercosur, not to mention the moribund Community of Andean Nations (CAN). Rather than convoking an urgent meeting of UNASUR, Brasilia and Buenos Aires went to Washington. Meanwhile, the heads of state of Peru, Chile and Colombia took refuge at another summit which Bush attended, APEC (Asia-Pacific Economic Cooperation), which met in Lima.

Reversal of the tendency?

Following eight years in which the centripetal forces in South America have produced a drastic geopolitical change to the detriment of imperialism in general, and more specifically the United States, an unknown remains: is the tendency reversing and will a centrifugal force accentuated by the global collapse destroy the conquests achieved so far this century?

The increasing number of clashes for the most diverse reasons between Brazil and Argentina, Ecuador and Brazil, Uruguay and Argentina, Paraguay and Brazil are indicative of the multiple gravitational pull of internal and externals forces that are working to undermine the process of regional union which has predominated in the last years. As was noted in these pages some time ago, following the great victory against ALCA (Free Trade of Americas Agreement or FTAA), an imperialist counter-offensive introduced a number of factors that pull in the opposite direction of South American convergence. Nevertheless, the most potent forces of disintegration result from the role played by the regional bourgeoisies. The competition for markets prevails and the more powerful the dominant classes of each country are, the more they feed internal shock troops. With the eruption of the world crisis, these objective forces come together in order to drag with them governments verbally committed to the Latin American cause. This is the crossroads at which all will have to make their choice without further delay.

Weight and measures

Washington continues to act according to the strategic direction that has guided it over decades: wherever Brazil goes, Latin America will go. That is what is behind the call for the G20 meeting. That also helps explain the transcendence of the extraordinary ALBA summit. The economic, geographic and population weight of Brazil is obvious. With the passive concourse of Argentina, its weight far surpasses that of the six countries that make up ALBA (plus Ecuador). But simple arithmetic does not always get on well with politics, less so with strategy. The internal reality of Brazil, Argentina, Mexico and Colombia – to only look at those countries with the largest economic weight – do not play in favour of an orientation that leads to subordination to the necessities of the imperial metropolises. It seems that politicians, intellectuals and the media have not yet understood the magnitude of the crisis that is occurring across the entire globe. Whether there is a further collapse or not in the immediate future, the world economy is marching towards a depression without precedent in the history of capitalism. A volcanic political transformation is blossoming that to different degrees, but with an even violence, will change the map from Alaska to Patagonia. The traditional political apparatuses of the dominant classes – without excluding the Democratic and Republican parties of the United States – will melt into air. Fascism will be the inevitable outlet of all those tendencies that reject a perspective based on the necessities of the peoples.

Within this framework one begins to see the real dimension of the agreements reached in Caracas by the countries of ALBA. The final declaration of the summit affirmed the decision of “constructing a monetary zone that initially includes the country members of ALBA (Dominica will participate with the status of observer) and the Republic of Ecuador, through the establishment of a common unit of accounting, Sucre (Unitary System of Regional Compensation) and a chamber of payment compensation. The creation of this monetary zone will be accompanied with the establishment of a stabilisation and reserves fund with contributions from the member countries, aimed at financing expansive demand policies to confront the crisis and sustain a policy of investments for the development of complementary economic activities.”

The heads of state present unanimously approved the decision to create “an economic and monetary zone of ALBA-TCP that protects our countries from the depredation of transnational capital, foments the development of our economies and constitutes a space liberated from the inoperative global financial institutions and the monopoly of the dollar as the currency for trade and reserves”. They affirmed the decision to “come up with a regional response, driven by ALBA-TCP, which seeks independence in respect to the global financial markets, questions the role of the dollar in the region and advances towards a common currency, the Sucre, and contributes to the creation of a pluri-polar world”. From its anti-imperialist perspective, moving in the direction of socialism of the 21st century, ALBA shifted from word into action, in sharp contrast to the rest of the countries.

In the middle of December the presidents of South America will once again meet, this time in Brazil. Nothing definite will come out of there. It will be one more episode in the struggle to define a path. Regardless, the destiny of more than one government will be at play there. And we will see much more clearly what path each one takes at this historic crossroads for the continent.

[Luis Bilbao is founding editor of America XXI. He is professor of political economy and international politics at TEA, School of Journalism; fauthor of 16 books, most recently Venezuela in Revolution: the rebirth of socialism; and currently a central participant in the construction of the mass United Socialist Party of Venezuela (PSUV) and the Union of South American States (Unasur).]

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