Honduras coup, ALBA and the Caribbean

August 21, 2009

The military coup carried out by masked soldiers in the early hours of June 28 against the democratically elected president of Honduras, Manuel Zelaya, was a bandit act with differing messages for different audiences.

One audience was the oligarchic groupings throughout the hemisphere, who will be emboldened by Washington's tacit tolerance of the coup. Another audience was the Latin American leftist and popular governments, who were being told their agendas could be trumped by non-democratic means.

And there was yet another audience: the predominantly English-speaking Caribbean governments who, like Zelaya, are far from ideologically opposed to capitalism. But they are aware of their inability to improve the overall quality of life of their societies within capitalism's current structures.

As a result, many of these island governments are edging towards regional agreements based on principles opposed to capitalism.


This explains why English-speaking Caribbean nations account for 10 of the 18 countries participating in the Venezuelan-led regional agreement PetroCaribe.

Launched in 2005, PetroCaribe lets Caribbean governments purchase oil and natural gas on terms that allow for the financing of up to 60% of the costs over a 25-year period at interest rates of around 1%. The agreement also include mechanisms to finance costs associated with building energy infrastructure projects, such as refineries and fuel storage facilities, and also fertiliser costs to increase food production.

These Caribbean countries have typically grappled with debt-to-GDP ratios ranging between 50% and 150% for the better part of the past two decades. They are economically dependent on tourism and the export of a very narrow range of agricultural commodities and natural resources.

They remain highly vulnerable to hurricanes, tropical storms, sea level rises and climate change.

This new ability to finance a large portion of their energy requirements creates much needed economic space to pursue domestic agendas that include: creating national food security; repairing and maintaining infrastructure such as roads and airports; and strengthening social services such as health care and education.

More simply, this helps build some degree of self-sufficiency, albeit within a program based on a capitalist approach to development.

The ability to more freely pursue their domestic agendas is the main reason why, over the past 18 months, three English-speaking Caribbean states have become members of the Bolivarian Alliance for the Peoples of Our America (ALBA — a nine-nation trading bloc initiated by Cuba and Venezuela). Under Zelaya, Honduras also joined ALBA.

In their view, the regional bloc is not oriented towards a competitive model that exploits weaknesses, but is an example of a cooperative model that creates space to cultivate some degree of self-sufficiency.

The coup against Zelaya, the illegal removal of Haitian president Jean-Bertrand Aristide in 2004 and the short-lived 2002 coup against Venezuelan President Hugo Chavez all show that international capitalism cannot tolerate any domestic agenda that includes an objective of self-sufficiency.

Added to this intolerance is capitalism's long-standing fear of the threat of a good example.

Located in the eastern Caribbean, the three English-speaking states of Antigua and Barbuda, Dominica and Saint Vincent and the Grenadines form one third of ALBA. These islands are also members of three other important regional blocs: the 15-member Caribbean Community (CARICOM), the 12-member Caribbean Single Market and Economy (CSME) and the nine-member Organisation of Eastern Caribbean States (OECS).

These groupings, composed mainly of English-speaking Caribbean islands, have done much to create a unified relationship among their members. As such, the experiences of Antigua and Barbuda, Dominica and Saint Vincent and the Grenadines within ALBA will undoubtedly be watched by other islands in the region.

Each of these islands has been trying to mitigate the challenges facing them over the past two decades. They have had little success, as demonstrated by their weakening economies, degrading environments and alarmingly, declining social indicators such as mortality.

By one measure, life expectancy in the English-speaking Caribbean has fallen by four years over the past decade.

Regional cooperation

ALBA's strength lies in its ability to identify member-states' weaknesses within capitalism and devise projects to mitigate and overcome their challenges. This analytical quality has allowed for the emergence of a large number of projects organised under ALBA's four main institutions: the ALBA Oil Agreement, the Bank of ALBA, the ALBA Peoples' Trade Agreement (TCP) and the ALBA Cultural and Sport Initiative.

The sometimes overlapping projects are in various stages of development and implementation. They are free to be used or ignored by any member state.

Modeled on the principles governing PetroCaribe, the ALBA Oil Agreement is a mechanism for member states to finance their oil purchases on a long-term, low-interest basis, of which a portion can be repaid in goods and services. For countries in the Caribbean, whose annual energy costs represent expenditures between 15% and 30% of their GDPs, the agreement is quite attractive.

Similar to PetroCaribe, infrastructure projects designed to facilitate or increase oil delivery, storage capacity and refining capabilities have been undertaken with the goal of reducing the overall cost of each barrel of oil these countries import.

Part of the agreement is a project in which 25% of every oil receipt accumulates in the ALBA Fund — designed to be loaned to member states for social development projects.

In line with this objective, the Bank of ALBA was established in 2008 to offer member states access to capital to pursue social development projects. Although the bank has a total capitalisation of only a small fraction of the value of other regional multilateral lending institutions, it offers a far more egalitarian governance structure, for example a rotating directorship among member states, and a decision-making structure where each member has an equal vote.

Established in the shadow of the global food crisis, the bank's first projects have involved establishing a food distribution company to create an efficient distribution network between member states and a regional food production fund to assist member states with domestic agricultural initiatives.

Both projects aim to create some degree of regional food security.

ALBA-TCP is devised to coordinate the trading of goods and services within the bloc. It outlines the specific obligations in the form of actions to be taken by each participating member states.

The agreement attempts to locate areas of need within each participating state and match these with goods and services available in partnering member states. The result is a series of bilateral agreements between participating member state.

To date, only Bolivia, Cuba and Venezuela are active in ALBA-TCP.

Sport and culture

The ALBA Cultural and Sport Initiative takes the form of developing localised independent media outlets and cultivating cultural exchange through sport. The most developed of these initiatives is the ALBA games project, which has been held on a biannual basis since 2005 and is meant to facilitate competition and training.

There are very good reasons to project that, left unmolested, ALBA has the potential to offer Caribbean states a space where self-sufficiency can be striven for. An appealing quality of ALBA projects is they have no political strings attached to them. Countries are signing on because the regional arrangements primarily offer economic flexibility.

Countries are able to follow development paths of their choosing, which in the Caribbean still seems to be a Keynesian-inspired form of state capitalism. For most countries in the region, this means establishing a much greater degree of self-sufficiency, in the form of food security, social development and economic growth.

In keeping with imperialism's sordid history, the reactionary forces in Honduras have demonstrated the lengths to which they are prepared to go to obstruct any goal of self-sufficiency that excludes oligarchic domination.

The government of Zelaya was not revolutionary. However, it was looking to better the lives of the people who elected it and saw that ALBA was one mechanism by which it could fulfil this objective.

This is precisely why the coup against the democratically elected government of Honduras is rightly being seen as a threat against the ALBA bloc. It should be seen as a threat against like-minded governments throughout the region, who are slowly edging towards ALBA.

[Faiz Ahmed is a doctoral student in sociology and focuses on the study of islands and the political economy of capitalist-led sustainable development plans. This article is abridged from

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