the death of the dollar

Latin America is again making strides in their plans for greater regional co-operation and integration. This week UNASUR (the Union of South American Nations) has been meeting in Buenos Aires. The bloc has been working on strengthening economic and political ties for a number of years, co-ordinating approaches at an international level. One example already highlighted by this blog has been the case of Palestine, where contacts between UNASUR and the Arab League led to a wave of recognitions for Palestine from Latin American countries, something which has led to the imminent UN vote on recognition.

The Buenos Aires summit saw agreement on economic issues, less on diplomatic issues. UNASUR failed to agree a common line on Libya, unsurprising as Colombia has already recognised the TNC, whilst Venezuela still vocally supports Gaddafi. The remaining countries have been fairly consistent in calling for, together with the African Union, a negotiated and peaceful process to resolve the conflict in Libya.

Economically the biggest decision was to take steps to create a new multilateral payments system, which will lead to the replacement of the dollar in inter-country trading. It follows a similar initiative by the ALBA countries, where trades have started to take place in the SUCRE. Neither payment system will lead to a new currency like the euro – the new ‘money’ will be for recording trades only (see here for more details).

This was one of the subjects which cropped up in the discussion led by Pablo Navarette in his ALBA workshop in the El Sueno Existe festival in Machynlleth last week. Pablo took the view that the number of ALBA countries were unlikely to increase in the near future. The most likely candidate for a new ALBA member is Peru. But Pablo’s view is confirmed by statements that Ollanta Humala, the new President of Peru, made in the election campaign.

Whilst the growing confidence and reach of UNASUR is a welcome development, it lacks one of the main planks of the ALBA, the relationships based on solidarity. The latest film by Tortilla con sal examines how ordinary Nicaraguans have benefited from signing up to ALBA, something Daniel Ortega did the day after taking power in January 2007.


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