IS ALBA A NEW MODEL OF INTEGRATION? REFLECTIONS ON THE CARICOM EXPERIENCE

• DOI: https://doi.org/10.2307/41945943
• Pages: 157-180
• Published date: 01 July 2011
• Date: 01 July 2011
• Author: Norman Girvan

IS ALBA A NEW MODEL OF INTEGRATION?

REFLECTIONS ON THE CARICOM EXPERIENCE

Norman Girvan

University of

the West Indies

Abstract

This article is a

step

towards

evaluating

the claims of

ALBA to

be

a new model of

integration

that is

superior

to neoliberal

integration

schemes.

It draws lessons

from the

experience

of

three Caribbean countries

which at one

and the same time

are members of the Caribbean

Community

(CARICOM); participate

in

an

Economic

Partnership Agreement

(EPA)

with the

European

Union and are

members of

ALBA. Simultaneous

participation

in

the three schemes

allows identification of

the

key

differences between

competing

models of

integration

and

evaluation

of the

advantages

and

disadvantages

of each.

This serves to

explore

issues

including

the

compatibility

of simultaneous

membership, Special

and Differential

Treatment,

ALBA

as

'alternative

alignment'

vs.

'complementary

relationship',

opportunistic

vs.

ideological

motivation

in

participation,

asymmetrical

vs.

non-reciprocal

solidarity

in

cooperation;

and

sustainability.

There

are some tentative

conclusions and

suggestions

for further research.

Keywords:

ALBA, CARICOM,

Caribbean,

Venezuela,

economy, integration,

neoliberalism

ALBA vs. Neoliberal Integration

Neoliberal

integration

schemes

Neoliberal

integration

schemes

provide

for

reciprocal

free

trade,

the free movement

of

capital;

and

binding government

policies

in 'trade-related' areas

including

the

treatment of investment and

services,

intellectual

property protection

and

the

opening

of

government

procurement

markets.

Their

purpose

is to entrench the

rights

of investors and

exporters by

removing

barriers

to trade and investment and

prohibiting government

policies

that

discriminate

in favour of local firms and local

investors. Neoclassical

trade

theory

holds that this

will lead to better allocation

of resources

along

the lines of

country comparative

advantage,

more efficient

production,

more

investment,

higher employment,

higher

economic

growth

and

greater poverty

reduction.

In Latin America

and the

Caribbean,

neoliberal

integration

schemes have

generally

taken

the form of

'Open

Regionalism'.

This

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158 ACADEMIC

ARTICLE

-

NORMAN GIRVAN

means that trade and investment barriers between the

region

and the rest

of

the

world are

lowered

at the

same

time as they

are eliminated

within the

region

(Bulmer-Thomas 2001). Neoliberal

integration

schemes and

Open Regionalism

are

closely

associated with

globalisation

and

in

particular

with

WTO trade rules.

These schemes have been criticised from

a developmental standpoint.

The

theory's predictions

of

benign

effects

only

follow under

highly

restrictive and

unrealistic

assumptions.

Market

integration by

itself

is

unlikely

to accelerate

development

among

small,

undiversified economies

with few

products

to trade

among

themselves. Between

developed

and

developing

economies,

neoliberal

integration may

accentuate,

rather than

attenuate,

differences

in

development;

for the richer

partners

have a far

superior

ability

to

compete

and

trade;

and

governments

of the

poorer partners

are

deprived

of

'development policy

space'

(Khor

2008). In

the

EU,

it has been

necessary

to

pump

huge public

resources

into the

poorer

members to modernise

their infrastructure

and

make

them more

attractive to investors.1

In

Mexico under

NAFTA;

peasant agriculture

has been

decimated

by cheap imports

of subsidised

agricultural

commodities from the

United

States;

manufacturing

has been transformed

into a supplier

of

low-wage,

low-domestic value

added

goods

to the

US;

and

social

and

inter-regional disparities

have

widened.2 Similar

criticisms are made of other bilateral

North-South FTAs

in Latin America.3

The CARICOM Single

Market and

Economy

- CSME

The Caribbean

Community

(CARICOM),

launched

in

1973,

has four

integration

'pillars':

economic

integration, foreign policy

coordination,

functional

cooperation,

and

security.

Economic

integration

consists

of the creation

of the CARICOM

Single

Market and

Economy

(CSME),

a neoliberal

Open

Regionalism integration

scheme.

The goal was first

adopted

in 1989 but the

CSME is still far from

completed.

The CARICOM Single

Market was

formally inaugurated

in

2006,

but

some

elements are still not

yet

in

place;

and there has been

but little

progress

towards

implementing

the CARICOM Single Economy

(Girvan 2010b). This

requires

a great

deal

of

work

in

the

harmonisation of

policies,

laws,

institutions

and

regulations. Implementation

shortfalls

are often attributed to the absence

of a supranational

element

in CARICOM governance.

The

governments

of all

twelve CSME participating

countries

are

required

to

agree

on the entire

range

of measures to be adopted;

following

which each

government

is

responsible

for

implementation.

This is a formidable task which strains

the human and

institutional

capacities

of most member

states;

which

may

also be constrained

by

the

perception

that

there

are limited economic benefits

to be derived from the

arrangement.

The CARICOM reality

is that

intra-regional

trade is dominated

by

a single country

- energy-rich

Trinidad and

Tobago

with

its

strong manufacturing

International

Journal

of Cuban

Studies

3.2 & 3.3 Summer/Autumn

2011