The Challenges for Regional Integration - Bolivia joining Mercosur and Cuba – US relations

Date: 26 December 2014

5 February 2016 by Julio C. Gambina

Latin American Integration continues to be discussed as a way of addressing the repercussions of capitalism’s global crisis and aspiring to a different development of the global order.

In recent days, a Mercosur meeting was held in Paraná, Argentina producing the most startling news: a way of surmounting the political and institutional obstacles for Bolivia to become a full member of the regional integration group in the future.

Apart from this news, there is very little that specifically demonstrates developments in independent integration - a march against the liberalizing hegemony and thus free trade, something big transnationals require. New partners are brought in not just from any side, but from countries that lead the experience of confronting the neoliberal strategy: Venezuela and Bolivia.

We recall that the four original members - Argentina, Brazil, Paraguay and Uruguay - incorporated first Venezuela after the rejection of the FTAAs in Mar del Plata 2005, and now Bolivia, which is under the scrutiny of all analyses on account of its economic stability and the growth of broad agreement for the Evo Government.

These two countries, Venezuela and Bolivia, together with Cuba, invigorate the Bolivian Alliance for the People of Our America, Alba – with proposals for an alternative productive and development model.

Thus, now in Mercosur, two directions coexist: the original one that invokes free trade and the alternative, the blueprint of new processes. There is continual doubt on which will prevail at the end of the day.

The Mercosur conclave took place at the same time that Cuba and the United States jointly announced re-establishing mutual relations and somehow , the start of the end of US imperialism’s criminal blockade on the island of liberty.

Thus, discussion is reopened on Cuba’s place and its socialist project in the region. From being excluded from the FTAAs negotiations, Cuba has moved on to being a full member of the “continental” relations system.

It is also worth asking who are the winners and losers? Will capitalist logic bear greater influence on Cuba? Or will Cuba be able to fight back, relying on its impressive record of struggling for self-determination and socialism?

The Challenge of Moving Away From Free Trade

It is worth focussing on the challenges this situation presents, notably the move away from Mercosur’s neoliberal and liberalizing origins at the beginning of the nineties.

This was the era of the end of the bipolar world and the euphoria of the capitalist monopoly. These were times when all economic and political processes in the region were geared to privatization and wholesale liberalization to suit the interests of the private initiative of capital, of the most concentrated type. The imaginary socialist was destined to the trunk of memories of an old utopia – off-centre and destroyed.

Since then, more than twenty years have passed. The political change in the region at the beginning of this century involved some changes in the integration agenda, many of which are still part of the discussion or relate to unrealized expectations.

One of the things we refer to is the announced Bank of the South - seven years have already passed from [the conclusion of] the initial agreement in December 2007. It is no less important to note that there is no instrument for regional financing that presents an alternative case at a time when a worldwide crisis (which also has financial dimensions) is unfolding.

Argentina flagged up the issue of the threat represented by debt, speculation and the combined action of legal and corporate institutionalization of contemporary, criminal capitalism before the Mercosur conclave.

When we refer to alternative financing, we refer to other destinations of financial resources, given that there is funding, whether it comes from commercial banks, the capital markets or international organizations, and now from Russia and above all from China; but the issue is doing away with the case for financing a specific productive and development model. This is why we need the guarantee that a policy of financial sovereignty, independent of the logic and rules of the global, financial capitalist system, is implemented.

In short, we are speaking of a new regional and global financial architecture. Together, our countries can channel their sovereign resources, which include international reserves, and steer them to construct a path towards the independence and sovereignty of our integrated nations.

The reality is that there are some very serious obstacles in the way of autonomy and independence such as the delay in destructing the old financial system, changing the economic policy and defining a “change of course” that goes beyond than the capitalist order.

By investigating the local realities, we confirm in this regard the Law on Financial Entities, that in Argentina dates from 1977 (during the dictatorship). At the same time, this law was classified by the symbolic Minister (Martínez de Hoz) as an essential instrument for reactionary economic reform made necessary by the genocides.

Another issue is that Argentina and other countries in the region continue to be members of ICSID ICSID The International Centre for the Settlement of Investment Disputes (ICSID) is a World Bank arbitration mechanism for resolving disputes that may arise between States and foreign investors. It was established in 1965 when the Washington Convention of that year entered into force.

Contrary to some opinions defending the fact that ICSID mechanism has been widely accepted in the American hemisphere, many States in the region continue to keep their distance: Canada, Cuba, Mexico and Dominican Republic are not party to the Convention. In the case of Mexico, this attitude is rated by specialists as “wise and rebellious”. We must also recall that the following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and the 6th most powerful world economy seems to show no special interest in doing so.

In the case of Costa Rica, access to ICSID system is extremely interesting: Costa Rica signed the ICSID Convention in September, 1981 but didn’t ratify it until 12 years later, in 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to the Santa Elena expropriation case, which was decided in 2000 :
"In the 1990s, following the expropriation of property owned allegedly by an American investor, Costa Rica refused to submit the dispute to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID proceedings, and the American investor ultimately recovered U.S. $ 16 million”.
, a terrain subject to the World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, whereas Brazil never subscribed to the protocol of membership and Venezuela, Ecuador and Bolivia denounced their subordination to the logic of profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. and the accumulation of rapacious transnationals.

But we also refer to the spread of contracts and trade agreements for foreign investor freedom and legal protection, articulated in various free trade treaties, or bilateral investment treaties. All these treaties need to be denounced by the region, as a basis for the discussion of new strategic frameworks for sovereign integration and independent development.

Strictly speaking, the issue is not simply neoliberal institutionalization that took place in the eighties and nineties; also at issue is an economic policy that serves contemporary capitalism, organized by transnationals, underpinned in the promotion of the international expansion of capital, with the complicity of the main States of global capitalism and international organizations.

In this context, Latin America and the Caribbean offer a capable, cheap labour force, and an abundant provision of common goods Common goods In economics, common goods are characterized by being collectively owned, as opposed to either privately or publicly owned. In philosophy, the term denotes what is shared by the members of one community, whether a town or indeed all humanity, from a juridical, political or moral standpoint. for imperialist looting.

We insist that the debate is this: whether we can break from the rationale for the functioning of the prevailing order. For this reason, our question and expectation is on the time it will take for regional change to go further and, on the economic side, the time it will take to bring about structural changes, institutionalization and economic policy, to face a new time of social transformation, from a liberating perspective, that will change the matrix of production and consumption, to dream of liberation and another possible world. Clearly, we are talking about the process of the socialist revolution of our time.

The Perseverance of the Cuban Experience

It is good to think of what is “possible” from an anti-capitalist perspective, when this dimension of “the possible” is reduced, is shrinking, in a defensive sense and relates only to policies that “may be possible” under capitalism. We are suffering the consequences of this in our national and regional political processes.

The Cuban example is relevant as an experience of fighting against capitalism and working for socialism; relevant as an example of going beyond what is possible under capitalism and encouraging an anti-capitalist, anti-imperialist struggle, in favour of socialism, with no guaranteed end.

With Cuban socialism persevering to achieve its objectives, the Island, its people, and its government were able to defeat the aggressive and intrusive US foreign policy that, for more than half a century, blockaded and boycotted the Cuban Revolution without success. During the Cold War, it was necessary to prevent the example of the struggle for communism in our America - this explains the Bay of Pigs and the invasion to blockade and the unsuccessful attempt to suffocate the island.

The beginning of US-Cuba negotiations, mediated by the Vatican, can be interpreted at different levels. The first is the success of convictions for the dignity, sovereignty and autonomy of Cuba. But another interpretation is that the United States was being isolated from processes of political dialogue in the region, an issue to which the ruling classes of our countries and the world (including of course the Vatican) are not indifferent.

What a striking contrast with the nineties when the regional agenda was defined by the FTAAs, the US’s absolute hegemony and US expansionist policy validated by governments and local ruling classes.

The facts indicate that it was not only the “No to the FTAAs”, constructed through a popular continental campaign between 2001 and 2005, but also the fact that a new era to discuss integration had also been constructed. ALBA was part of this, as were aspects of Unasur later, and even more so, CELAC. This was especially so in 2013 under the coordination of Raúl Castro, who injected dynamism into regional relations by excluding North America: the United States and Canada.

Furthermore, it is worth taking into account that in Latin America, the Church was vying to obtain the largest number of believers in the world and was interested in stitching the tears or fractures, present or future, of the contemporary order.

In the eighties, the Church intervened against the conflict and the Polish and Eastern European situation. It intervened to change the correlation of forces in the global class struggle. Now, under different circumstances, the papacy is also intervening with discourses critical of neoliberalism, in these times when the popular struggle has dented the neoliberal discourse, which used to refer to there being no alternative.

Let us recall Margaret Thatcher and her “There Is No Alternative” (TINA), that Carlos Menem broadcasted among us as his own slogan. The alternative began to be expressed as “the other possible world” during the World Social Forum in 2001 in Porto Alegre, and became more apparent by reviving the struggle for socialism that animated the most radical processes in South America, that together with Cuba, fought for more audacious integration, which is still in the process of trying to survive the prevailing critical situation.

Cuba won its battle for reintegration in Inter-American and global relations. Also, the dominant classes use every possible means to avoid revolutionary ruptures in the capitalist order, and in all events, to negotiate to try to favour trade relations, extending markets and responding more to the current crisis. The United States is seeking a market in Cuba, to channel investments that contribute to extending each and every market.

To this effect, there are no small markets, everything adds up; and even when the region appears to be an aggregate of different countries, for capital, they are all markets that include a considerable part of a sustainable market, subject to subordination to the capitalist logic of profit and accumulation. For this reason, they fight for liberalization, economic liberalization and a greater space for transnationals. It is a path that China and Russia also increasingly tread, as well as other countries such as Brazil and its Translatinas which are fighting for a place in regional and global domination.

The problem is capitalism and the need to set in motion the struggle for socialism.

The popular movement needs to extend its path to social, political and cultural accumulation, to make the dispute for popular power and the plea for another possible world in 2001 a reality.

The slogan began to win credibility at the same time as new dreams for socialism, with the Cuban renovation and the different quests for 21st Century Socialism (Venezuela) or Communitarianism (Bolivia), for the objective of Living Well (Bolivia) or Good Living (Ecuador).

Anti-capitalism and anti-imperialism are possible where a mass social majority consolidates for changes, transformation, emancipation and liberation.

The struggle for an alternative integration, against subordinated inclusion, demands a popular body that is organized and conscious to drive the dynamic of society in the struggle against Authority, to suspend debt payments that will liberate funds for a new model of production and development, independently financed by our countries.

We need to learn lessons from Cuba’s dignity in its struggle against isolation and from how it generated the conditions to force imperialism to negotiate and continued to search for new ways of defending its achievements (health, education and culture) and to attain more social and national liberation, by structuring new networks that give life to the dream of a great fatherland in our America.

There are those that incorrectly read the situation and think that these negotiations between the United States and Cuba can be repeated to put an end to colonial processes, for example, those that persist between England and Argentina over the Falklands.

Their mistake lies in characterizing the US government’s decision as unilateral and generous. Much to the contrary: Imperialism was dragged to the negotiating table by Cuban diplomacy, the situation of regional integration without the North American presence, and also clearly, by the moral weight of Ecclesiastical power and the encouraging papacy of Pope Francisco. Hope that comes from a historic role that, in this 21st century, is played to sustain the weight of the Vatican and its growing influence among the population of our territories and other latitudes.

Russia wrote off 90% of the Cuban debt and decided to reinvest the remaining 10% in projects decided upon by the Cuban sovereign, by negotiation and Cuba’s independent integration in international relations. The same may be said of the substance of Cuba’s relations with China, a growing political actor on the Island and in the Latin American and Caribbean region.

It must not be expected that England will agree to discuss sovereignty, imitating the US gesture of détente to Cuba. Argentina must consolidate its plan for independence and only then will England take a seat at the negotiating table. It is clear that this involves making the transition to a path that confronts capitalism and imperialism.

To decide upon the socialist direction, with all the difficulties that it involves and where Cuba acts as a vantage point, marks the only possible way to think of independence and the entire structuring of production focussed on satisfying the needs of our people rather than on the logic of capitalist values of exploiting the labour force and looting our common goods.

This is a political decision that must come from the people. It is only in such circumstances that governments will be able to accept a mandate that confirms an emancipated destiny for liberalization and that materializes the dream of a great fatherland, Our America.

Translated by Anoosha Boralessa in collaboration with Umit Hussein





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