Cash, Clothes, and Construction by Kate Maclean;

Author:Kate Maclean; [Maclean, Kate]
Language: eng
Format: epub
Tags: POL023000 POLITICAL SCIENCE / Political Economy, BUS069020 BUSINESS & ECONOMICS / International / Economics & Trade, POL057000 POLITICAL SCIENCE / World / Caribbean & Latin American
Publisher: University of Minnesota Press
Published: 2023-11-28T00:00:00+00:00

Currency and Sovereignty

Bolivia’s participation in ALBA and the SUCRE is an example of scaling up dynamics of community exchange to the level of the nation-state and regional trade, and so changing the logic that made solidarity and cooperation subordinate to competition. The creation of ALBA was vaunted around the world as a potential alternative to the system of global trade that had positioned member countries as providers of natural resources to industrialized nations and had given the U.S. dollar hegemonic power as the international clearing currency. Naomi Klein described it—idealistically—as “essentially a barter system, in which countries decide for themselves what any given commodity or service is worth, rather than letting traders in New York, Chicago or London set the prices for them” (Klein quoted in Cusack 2014, 1). In 2006, Bolivia joined the regionalist project ALBA-PTA—the Bolivarian Alliance for the Peoples of Our Americas–Peoples’ Trade Agreement—led by Venezuela and Cuba, which was created explicitly to challenge the dominance of IFIs and the hegemony of the United States in trade agreements. ALBA came to represent the “pink tide” nations of Latin America, all of whom embraced solidarity and community at the level of government and global trade, and these principles were explicit in the treaties underpinning the trading bloc. The aim was to create regional production networks based on solidarity between countries that had been exploited by the world system and were as a result highly indebted. Each country would have specialized national produce—Venezuelan petrochemicals, Cuban medics, Nicaraguan wood, and Bolivian textiles—which could be exchanged in the spirit of solidarity and partnership rather than competition and comparative advantage (Rosales, Cerezal, and. Molero-Simarro 2011). Surplus from this trade would be paid into a Structural Convergence Fund that would manage aid to less-developed regions.

In order to reduce dependency on the dollar, members of ALBA, chiefly Presidents Rafael Correa of Ecuador and Hugo Chávez of Venezuela, proposed a “new financial architecture” along the lines advocated by Keynes during the Bretton Woods summit. This would include the creation of a Banco del ALBA and Banco del Sur, which would be able to invest in development and infrastructure projects, and a regional clearing currency, the SUCRE (Sistema Unificado de Compensación Regional de Pagos; Unified System for Regional Compensation), which enabled trade within the ALBA group without reliance on the U.S. dollar. The creation of the SUCRE was inspired by the Keynesian idea of the “bancor,” which would be based on the price of gold and enable international trade without the domination of the richer countries. The SUCRE, mirroring Keynes’s scheme, was to be based on donations from member countries, proportionate to GDP, and has been referred to as a “monetary tool toward economic complementarity” (Rosales, Cerezal, and Molero-Simarro 2011, 4). Chávez also declared it “an important step towards the sovereignty of our peoples and freedom from the dictatorship of the dollar, the neoliberal dictatorship and the dictatorship of transnational corporations” (Vaca 2009). The vision of the SUCRE went beyond other regional trading currencies—for example, the

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