Globalization has ended in massive failure. 

One response to this crisis has been to dump export-oriented industrialization and reemphasize the primacy of the national market in sustaining economic growth. 

Another response, complementary to this, has been to build regional associations or regional blocs.

Regional economic blocs are not new.  However, some of the more prominent ones have either not moved beyond a primitive stage, as in the case of SAARC in South Asia, or have been based on neoliberal principles, like ASEAN in Southeast Asia.  ASEAN’s idea of integration is to see it as a step towards full-scale globalization, a process that is termed “open regionalism.”

The most interesting efforts at integration, in the view of many, are those taking place in Latin America, among them Trade Treaty of the Peoples and ALBA or the Bolivarian Alternative for the Americas to which eight countries now belong.  These experiences are at an early stage and yet they already contain lessons for other parts of the world.  It is for this reason that the organizers of this conference decided to hold it in Asuncion, bringing in activists and government officials from Asia and Africa to interact with people in this region to discuss the lessons that developments here have for the rest of the world.

For many of us from outside Latin America, the dynamics of ALBA hold particular interest.  One item that fascinates us is the use of barter as a key method of trade, for instance, the exchange of Venezuelan oil for Bolivian soybeans or of Venezuelan oil for medical services rendered by Cuban volunteers.  Another is the subsidization of the oil needs of 14 Caribbean countries by Venezuela, which sells fuel to them at 40 per cent off the world price.  We are intrigued by the comment of President Hugo Chavez during the World Social Forum in Caracas in 2006 that these practices “go beyond the logic of capitalism.”

Yet we cannot romanticize these efforts.  For instance, the plan to build oil and gas pipelines from Venezuela to the furthermost areas of South America is probably dangerous and damaging not only to the environment but also to the indigenous peoples.  Some elements of the ALBA perspective, as expressed by some people, reflect the perspective of 1950’s-style national capitalist industrialization, which is probably not suitable for the current period.

The challenges confronting us today cannot be met by either neoliberalism or the old developmentalist model.  Let me mention some of these challenges to contemporary regionalism in Latin America and other parts of the South.

• The first is how to build regional blocs that go beyond trade to include industrial policy, a shared agricultural policy, macroeconomic coordination, and technology sharing.

   

• The second is how to ensure that building complementarity among economies does not reproduce the old, unequal division of labor between stronger and weaker economies.

   

• The third is how to promote a development process that does not reproduce social inequalities at the regional and national levels in the name of capital accumulation.

   

• The fourth is how to promote a development process that is sustainable, that is, one that is built on ecologically benign technologies and is not based on ever-rising material consumption per capita, though of course the spreading of material wealth via income redistribution is necessary to bring people out of poverty.

   

• The fifth is how to avoid a technocrat-led process and promote instead the democratization of decision-making in all areas of the economy.

   

• The sixth, related to the previous point, is how to move away from a statist process and institutionalize civil society participation in all key areas of economic decisionmaking.  Civil society must not only provide a check to both the state and the market, but it must be the leading force in the new economics.

   

• Finally, the last I would mention is how to undertake a process of regional integration that transcends the logic of capitalism, to borrow the words of Hugo Chavez.

I propose these as some of the key questions to guide our discussion of regional integration over the next two days.

Thank you.