PERSPECTIVES ON THE GRAND-NATIONAL ENTERPRISES AND THEIR ROLE IN THE ECOALBATCP: TRADE, PRODUCTIVE CHAINS AND FOREIGN INVESTMENT

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ARTÍCULO ORIGINAL

PERSPECTIVES ON THE GRAND-NATIONAL

ENTERPRISES AND THEIR ROLE IN THE

ECOALBA-TCP: TRADE, PRODUCTIVE CHAINS AND FOREIGN

INVESTMENT

Perspectivas de las Empresas Grandnacionales y su papel

en el ECOALBA-TCP: comercio, cadenas productivas e

inversión extranjera

MSc. Andrea Califano.

1*

_____________________________

1

Collegio Ghislieri. Universita Degli Studi di Pavia, Italia

……….

*

Autor para correspondencia:

[email protected]

Recibido: Junio, 2015 Aceptado: Julio, 2015

Abstract

This paper is concerned with a much needed clarification on the features of the Grand-National Enterprises, starting from the official documents of the ALBA-TCP and the political declarations, though going beyond them. Instead of focussing on the documents released in the framework of the ALBA, on the elements of novelty they introduce, and the importance of the proposals they make, these pages try to define what exactly is to be intended as a Grand-National Enterprise: how a firm shall work and how it shall be composed from a juridical point of view in order to be identified as such. Thus, this essay firstly deals with the presentation of what is conceived to be the economic functioning of this kind of enterprises; in the second part a formalised juridical scheme is proposed, giving also some elements for the distinction of these enterprises from other similar ones.

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Revista Cubana de Economía Internacional

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being aware of the toughness of such an operation, the emphasis is placed on productive chains and on economic policy autonomy, also in consideration of the fact that the ALBA-TCP is not conceived as an area promoting free trade. The objective is to highlight the fundamental economic elements for further investigations on the scope for the development of this kind of enterprises.

Key Words: ALBA-TCP, Grand-National Enterprises, intra-ALBA-TCP trade flows, ALBA-TCP foreign direct investments, Latin American economic integration, ECOALBA-TCP

Resumen:

Este artículo se refiere a la necesaria interpretación de las características de las Empresas Grannacionales, comenzando por los documentos oficiales del ALBA-TCP y las declaraciones políticas, y trascendiendo más allá de las mismas. En lugar de enfocarse en los documentos publicados en el marco del ALBA, en los elementos novedosos que en ellos se introducen, y en la importancia de sus propuestas, estas páginas intentan definir qué puede entenderse exactamente como una Empresa Grannacional, o sea, cómo una firma debe funcionar y cómo debe estar organizada desde el punto de vista jurídico para ser identificada como tal.

Inicialmente se presenta cómo está concebido que sea el funcionamiento económico de este tipo de empresas, y en segundo lugar se propone un esquema jurídico formal, brindando además algunos elementos para la distinción de estas empresas de otras similares. Se muestran datos sobre los flujos de comercio al interior del ALBA-TCP, con el objetivo de establecer el contexto para evaluar el papel que las Empresas Grannacionales pueden tener potencialmente dentro de la Alianza; además se proporcionan algunos principios fundamentales con respecto a la inversión extranjera directa. Aunque se está consciente de la dificultad de tal tarea, el énfasis está puesto en las cadenas productivas y en la autonomía de la política económica, también considerando el hecho de que el ALBA-TCP no está concebido como un área de promoción del libre comercio. El objetivo es resaltar los elementos económicos fundamentales para futuras investigaciones sobre el desarrollo de este tipo de empresas.

Palabras Clave: TCP, Empresas Grannacionales, flujos comerciales ALBA-TCP, inversión extranjera directa ALBA-TCP, Integración económica latinoamericana, ECOALBA-TCP.

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The ECOALBA-TCP as “a shared development, interdependent, sovereign and solidary economic zone” (ALBA-TCP, 2012: Art. 1)1_{has become the main target of the}

ALBA-TCP (among others, Solórzano Cavalieri, 2012; Muhr, 2013). In the intention of the governments involved, one of the major elements to pursue the realisation of the Economic Area would be the Grand-National Enterprises (GNEs) (Empresas Grannacionales).

The institution of an economic area2, the ECOALBA-TCP, with productive relations at its core finds its rationale in the consideration that the Alliance has to structurally enroot itself in economic relations between its members, if it wants to survive the extraordinary political season and effectively pursue its objectives, transforming the social achievements obtained so far – which have addressed the state of social emergency which characterises the participating countries – in structural economic integration linkages capable of favouring the integral development of its members. Apparently, the role of the Grand-National Enterprises is to be pivotal3; nonetheless, they still remain largely “unidentified objects” for what concerns their functioning, juridical organisation, actual development. In addition, the analysis of this kind of firms is rarely coupled with an investigation on the economic relationships between the ALBA-TCP members. For how simplified the present analysis may be, given the limited scope of this paper, some of the shortcomings in GNEs’ research are addressed.

Thus, the first part is concerned with the presentation of what is conceived to be the economic functioning of this kind of enterprises; in the second part I propose a formalised essential juridical scheme, also giving some elements for the distinction of these enterprises from other similar ones. In the final section, I present some of the results of a ground-breaking analysis on intra-ALBA-TCP trade – as related to the GNEs fields of action, trying to provide some cues for further research on the matter: these will concern productive integration and foreign direct investments.

What a Grand-National Enterprise is: the economic perspective

1

All translations are mine.

2_{I prefer the term “economic area” rather than “economic zone”, as the latter recall the concept}

of “special economic zone”. However, as the ALBA-TCP official documents always use “economic zone”, I will apply the two terms without distinction.

3_{“The interest in analysing the concepts of Grand-National projects and enterprises lies, on the}

one hand, in the relevance that these instruments may have in the future development of the ALBA-TCP. On the other hand, as they seem to address the worries – expressed by the militant academia – concerning the accumulation and development pattern necessary in order to set a stable and sustainable economic basis for the Bolivarian Alliance. Clearly, it is a first

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I give now a few insights on the structure the GNEs are meant to work accordingly, getting to the outlining of a model of the functioning of the GNEs4.

As it is clear by reading the official documents of the ALBA-TCP, the GNEs have been conceived in opposition to the transnational companies; the ambition – shared among the governments participating to the ALBA-TCP – is to generate enterprises capable of confronting with the TNCs. Confrontation with the TNCs would necessarily have to be attempted through the creation of firms capable of operating in the environment of an economic system to many extents transnationalised (Robinson, 2008). The primary way in which this would be realised was identified in targeting productive chains which are transversal to the national territories within the ALBA-TCP; the GNEs – public companies owned by two or more states – stretching out across borders will – in the intentions of the leaders of the Alliance – occupy those chains or generate new value chains the most possible unfolding within the region.

It is to be stressed that the GNEs are conceived not to monopolise the value chains across the participating countries. Instead, they aim at exercising a sort of leverage with regards to private firms (particularly small firms, which are those prevalent in the member states)5, in order to exploit their productive capacity and – even more importantly – to involve them in the transnational productive chains and thus in the ALBA project6. Even to this regard, their role is conceived as similar to that played by the TNCs, described in Dicken’s cornerstone economics textbook as one of stimulating complex networks of relationships with a myriad of other firms, being them transnational and domestic, large and small, public and private (Dicken, 2011: 430). For how similar the dynamics activated by the TNCs and the GNEs may be, it is to be highlighted that, on the one hand, in the case of the TNCs, local firms which apparently operate in restricted geographic areas may actually be linked to global production via TNCs (Dicken, 2011: 430); their interests hence will be tied to those of what Robinson

4_{To cut it short, as I once was told by the Cuban economist Lázaro Díaz, “one of the major}

fallacies of the Grand-National Enterprises is that we do not know what they are” (conversation held at the Faculty of Economics of the University of Havana, on 9th January 2014). I try to answer this question.

5

Cuba stands aside on this matter.

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called the transnational capitalist class, even though they do not belong to it (Robinson, 2004). On the other hand, the GNEs aim at mobilising the widest part of societies, involving the greatest part of the productive sectors, around transnational chains which are not subjected to foreign companies direction, and – generally speaking – which are not tied with the process, project, interests and evolution of global capitalism. Instead, those chains would articulate around companies, projects and interests which are those promoted by governments according to the ALBA principles, i.e. within the “ALBA Paradigm”. The idea is to seize control from TNCs’ headquarters, giving it to governments; still putting in practice similar mechanisms and, up to a certain extent, a similar accumulation circuit: at least if we refer to the geographic transnationalised nature of it.

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Figure 1

The functioning of the Grand National Enterprises

Governments' involvement and control to guarantee

ACCESS TO RESOURCES

PROCESSING and DISTRIBUTION Private, mixed and

state enterprises

Governments' involvement and control to guarantee

ACCESS TO CONSUMPTION U P S T R E A M D O W N S T R E A M Grand-National Enterprise

PLANNING

Resources

allocation Regulation Control

PROFITABILITY & SELF-SUSTAINABILITY Productive Accumulation Local consumption Exports

Source: my elaboration, starting from Aponte García, 2011: 189.

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ALBA countries seek emerges. So, their production must be directed to local final or industrial consumption – or to that of other states involved – regardless of any other economic consideration, and the price they charge has to be “fair”. However, this is to be done – and it is “not an easy task, though not impossible to accomplish” (ALBA-TCP, 2008) – preserving profitability (which is intended, I am brought to think, as the necessity that revenues exceed costs), and self-sustainability, i.e. without the use of unredeemable public funds.

If the enterprise succeeds in profitability and self-sustainability, it will be able to proceed besides local consumption to capital accumulation: as already said, profits shall be invested in social programs or reinvested into the firm. Moreover, it will be able and allowed to export: first of all towards ALBA-TCP or regional countries, but also to extra-regional markets. Thus exporting is not the final and primary goal of the enterprise – and consistently, of the national economic system as a whole. On the contrary, as highlighted by the dashed line, it is just a possibility provided the other targets have been met. And, I deem it worth being underlined: exports are not at the basis of the process of productive accumulation – the arrows are two distinct ones. Obviously, this is to refer to the pattern of development targeted by the ALBA countries, which is not to be grounded on exports, hence growth is not scheduled to be led by exports.

The juridical perspective

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To begin with, it is worth quoting extensively: “The juridical challenge the Grand-National Enterprises are facing in their constitution is extremely tough. Not only have they a final purpose which still has not been conceptualised and are they depending on a “constitutional” treaty – the TCP – which still has not been agreed and which will have to be tied to the constitutions of the countries subscribing it. But it also implies the creation of juridical persons whose model and character, for their being “political”, are not contemplated in the juridical systems of the member states, nor in a constitutive treaty of the “Alliance” from which they come, or in a constitutive treaty of its very concept, neither are they comprised in juridical norms shared among the countries which will form these enterprises” (Solórzano Cavalieri, 2012: 95). Besides: “The legislation in force has been taken as basis; then, far from being these enterprises counterpoised to transnational companies, as it is claimed in the ALBA-TCP Documents, they have been developing in accordance with the juridical models of the entrepreneurial concentration or of public owned transnational companies” (Solórzano Cavalieri, 2012: 229). We are then facing a political concept, lacking of a juridical base, thus subject to governments’ will and not enrooted into states’ structural relations, not even in juridical terms, let alone economic ones. However, we read in the subsequent paragraph that, notwithstanding the blurred ground which they are based on, the GNEs are springing – at least as projects – in any field where their presence is perceived as necessary for the progressive institution of the Economic Zone of shared development, the ECOALBA-TCP. Official sources testify of the projected existence of 13 GNEs, inserted, together with 25 more Grand-National Projects7 into 14 fields of action.

The Venezuelan researcher Solórzano Cavalieri, who also worked as an official at the Popular Power Trade Ministry, carried on a meticulous investigation throughout all the Official Journals of the Bolivarian Republic of Venezuela from 2004 to 2012. For this juridical section, I will basically draw on her work, which is based, among those 13 GNEs which are said to be existent, on the following ones:

 The Grand-National Enterprise for Fishing and Aquaculture

 The Grand-National Enterprise for Manufacturing Science and Technology

 The Grand-National Enterprise for Foodstuffs Production

 The Grand-National Enterprise for Coffee Production

These are the GNEs the mentioned author considers the most advanced ones; as her account dates June 2012, I updated it with the latest developments, which regard most notably the last GNE in the list8. The first element to be emphasised is that all these

7

It has to be kept in mind that each GNE shall stem from a GNP, while the contrary does not hold.

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GNEs are in fact bilateral, each of them being comprised of Venezuela and another member of the ALBA-TCP, reflecting the regional radial biased commercial structure and Venezuelan overwhelming economic size. As already said, the GNE for Coffee Production is the most developed one in its juridical architecture, as it is the only one among those analysed by Solórzano whose statute has been signed: thus, it is the only one actually existing, as all the other mentioned GNEs will not be up and running until the social statute will be approved.

Without coping with the juridical structure of each of them, I will briefly outline the shared elements, so as to get to a general juridical model for the GNEs. All of them are comprised of different juridical institutes: the management of the enterprise is entrusted to an intergovernmental commission (a sort of council of the competent ministers or officials of the states involved), which does not have juridical personality. On the other hand, other juridical institutes included in the structure of the GNEs do hold that status: they constitute themselves as enterprises in conformity with the laws of the country where they are located. The decision-making process follows the rule of consensus; as a consequence, the share in social capital shall not have influence in the process9. Nonetheless, in every case it has been held firmly the share of the country where the enterprise is located to be at least 51%. The exception to this rule is the GNE for Coffee Production. The other fairly developed GNEs foresee the creation of a firm in each participating state, subject to the overall managing of the intergovernmental commission; instead, in that case, the states’ commission rules over an enterprise – VENEDOM S.A. – founded in Venezuela (51% held by this state, 49% held by Dominica), which owns itself (100%) an enterprise acting in Dominica, which is thoroughly foreign for this latter state. The latter peculiarity has been underscored by the dashed line; obviously, the firm belonging to the GNE, founded in state B (Dominica) – which is foreign to that state – obtains its juridical personality according to state B legislation. Instead, the scheme adopted for the GNEs usually entails that the state owning the majority of shares is also the state whose laws the enterprise has to comply with. This architecture has at its core the crucial will to preserve national sovereignty over those firms operating in a given state’s territory; an attitude thoroughly consistent with the principles behind the “ALBA Paradigm” and with the oppositional stance adopted towards transnational companies.

Figure 2

made available by the governments involved to the benefit of researchers, who could instead play a meaningful role in the shaping of the way forward.

9_{“Thus, [...] the actual control within the Grand-National Enterprises is exercised jointly by}

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A model of the juridical structure of the Grand-National Enterprises

Grand-National

intergovernmental

Commision

No juridical personality

Enterprise founded

in state A: 51% state

A - 49% state B

Juridical person according to state A legislation

Foreign enterprise

founded in state B

(100% GNE)

Juridical person according to state B legislation

Enterprise founded

in state B: 51% state

B - 49% state A

Juridical person according to state B legislation

Source: my elaboration, starting from Solórzano Cavalieri, 2012.

The creation of each GNE is decided through an international treaty, which shall be followed by the compilation of the firm’s statute signalling the actual realisation of the enterprise and the beginning of its activities. In the case of the GNE for Foodstuffs Production, the agreement extensively traces object, goals and scope; it also copes with its juridical model, its financing mechanism and the norms for the elaboration of its statute. Thus it may be worth outlining briefly the Framework Agreement for the construction of the GNE for Foodstuffs Production, as it appears in the Official Journal 39.719 (22th of July 2011) of the Bolivarian Republic of Venezuela (República Bolivariana de Venezuela, 2011b). First of all, the target of the enterprise is said to be: “To contribute to the development of the Parties [Venezuela and Bolivia] and to guarantee their food security and sovereignty, through production, processing, exchange, distribution, and commercialisation of different products and food items” (República Bolivariana de Venezuela, 2011b: Art. 1). This will be pursued through the following instruments: the current foodstuffs production will be potentiated, either for the domestic supply of each country and the subsequent exchange of surpluses. At the same time, a potential field for investing resources of both contracting parties in the sector will be explored.

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of technical assistance and training” (República Bolivariana de Venezuela, 2011b; emphasis mine). This is of outstanding significance for the attempt the Grand-National Enterprises do in order to involve small and medium firms into the regional productive chains. For the very same reason, another bullet recommends the fostering of the springing of producers’ associations, so that they will be capable of building up productive networks. The latter elements emphasised are also consistent with the chart on the functioning of the GNEs provided (Figure 1), where private (and mixed) firms are present in the central part of the productive chain going from the extraction of resources to consumption. In order to strengthen the productive chain, the GNE: “Will promote technological research and exchange among producers of the contracting states and among the various scientific institutions of the two states, in the sector of foodstuffs industry and production”10_{. This is also meaningful with regards to the fuzzy}

concept of cooperative advantage: it frequently appears in official documents and political declarations of the ALBA, often considered in the literature as fundamental for what I call “ALBA Paradigm”, though vaguely defined. Cooperative advantage should be the key element to solve the strains emerging from the contrasting objectives pursued by the participating states: specialisation according to each state’s strengths shall be coupled with an integral development of each state’s productive apparatus; moreover, this is to be done in order to overcome asymmetries between countries. Thus, instead of competition, states’ relations should be inspired by the will to pool capacities, potentialities and resources in a cooperative fashion, so as to guarantee an overall advantage of participating countries, i.e. the cooperative advantage of the ALBA-TCP facing other regional blocs, national powers, and transnational companies. This is consistent with the attribute to the Economic Area to be one of “shared development”, and with the stated principle of the sought for complementarity instead of competitiveness. Although cooperative advantage would be a basic tenet of the whole ALBA-TCP, the concept has never been defined – if not vaguely – by the political elites leading the Alliance, nor has it been carefully analysed in the literature. However, some authors provide helpful insights on cooperative advantage: among them, Muhr and Katz (Muhr, 2011; Katz, 2006). The pooling of technological research acquires particular importance in the case of underdeveloped states as those comprising the ALBA-TCP, and I tend to recognise cooperative advantage – though vaguely defined – at the core of the functioning of the whole “ALBA Paradigm” and – more concretely – of the GNEs. Accordingly, the productive chain aims to be regional, i.e. shared between the states taking part to a given GNE – and virtually within the whole ALBA-TCP and between any states subjecting to the “ALBA Paradigm”. This is also shown by other tenets I find worth highlighting: on the one hand the surpluses are

10_{This and all the remaining quotations from this document – if not differently specified – are}

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to be directed, “in the proportion deemed adequate, to the exchange11 and/or the commercialisation in order to satisfy the needs of the countries members to the ALBA-TCP”. On the other hand, and more significantly if we are concerned with productive relationships and the consolidation of structural economic relationships between the states involved, we have that the GNE for Foodstuffs Production holds among its objectives: “The creation of subsidiaries within the ALBA-TCP member states, with the purpose of developing productive chains”.

The text of the agreement goes on listing other generic goals the GNE should aim at, such as: the elaboration of projects for the improvement of the productive systems of both countries; the promotion of productive development respecting the environment and each population’s culture; the organisation of other industrial activities connected with the purpose. And it provides as well indications concerning the financing of the GNE, interesting considering the New Regional Financial Architecture promoted in the framework of the ALBA: Article 3 specifies that the GNE will prioritise the financial operations available from the Bank of the ALBA, and from other institutions inspired by the same principles.

The Grand-National Enterprises in comparison with other

initiatives and types of public enterprises

Tracing the juridical outline of the GNEs cannot set aside a few considerations on how they relate with other types of public enterprises. I will not elaborate much on the matter, though there are some important distinctions to make as I verified a great deal of confusion and inaccuracy in the literature. Part of the misunderstandings is directly caused by the ALBA-TCP official documents, or by constitutive treaties of enterprises which are not GNEs – though in some cases aiming at becoming such – but claim they are founding firms which include in their name the term “Grand-National”; sometimes ambiguity is increased for political purposes. The following remarks are done purely as an indication; nonetheless, they introduce in the literature a hypothesis of delimitation of the borders of the Grand-National Enterprises with regards to other types of enterprises which are similar and often included in the same category. As a matter of fact, at times the differences are disregarded; on occasions, on the other hand, similarities are disregarded, getting to ignore the existence of enterprises – such as the Venezuelan based socialist mixed enterprises – which even in official documents are sometimes considered Grand-National Enterprises.

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In relation with other initiatives within the ALBA framework, there are two major elements of confusion to consider: one regards the GNEs facing the mixed enterprises, the other the distinction between the GNEs and the Grand-National Projects (GNPs). Starting from the latter issue, as already said, any GNE derives from a GNP. The reverse does not hold, hence the number of GNPs – either already developed or not – is much higher than the number of GNEs. The GNPs do not require an institutional organisation established in juridical terms; they may well be composed of fuzzy and flexible cooperation agreements. They may stem from the commitment of just one state, provided it has a resource – material or less so – to share with – at least – one other country. And – according to official documents – they do not need to be based on resources and capacities created for the purpose; they can use what the involved countries have at their disposal.

The cooperation scheme which paved the way for the existence of the Alliance as a whole, the so called Oil for Doctors agreement, has then been included in the framework of the ALBA-TCP as a GNP; the same can be said for the alphabetisation campaign, started as well in the context of the bilateral cooperation between Cuba and Venezuela. However, I find it inaccurate to identify – as it is usually done – a GNE for Alphabetisation and Post Alphabetisation, as it simply does not exist as such12. Part of the confusion, in my view, is due to the failed conceptualisation of the ALBA-TCP and its instruments. For instance, an effective way to help in clearing up some misunderstandings is to make use of the broader category of Grand-National Mechanism (GNM): it is a theoretical concept which I will not cope with in this paper, logically independent from the ALBA-TCP as an institution, predates it and its GNEs and GNPs, at the same time comprising those instruments13. Thus, it inspired the Oil for Doctors cooperation – which in fact then became a GNP – and it inspires the GNEs through the “rationalising coordination” done by the GNPs. The three elements, the GNM, the GNP, and the GNE, are tightly linked but to be kept distinct.

More tangled is the relationship between the mixed enterprises and the GNEs. I refer to the former as public enterprises, located in one single country, whose ownership is shared between two or more countries. It is an institutional figure much used in the framework of the Alliance: they are in fact much more developed than the GNEs, in terms of number of operating firms, of their longevity, financial resources, etc. They

12

This is not in disregard for the importance of such projects, or the results they have achieved. On the contrary, I acknowledge that the GNPs represent the most successful part of the ALBA, they have really affected population living conditions, and they have been capable of mobilizing considerable resources. In comparison, the GNEs are far less significant; nonetheless, I perceive the need to move towards a more precise categorisation of the set of initiatives going on within the ALBA.

13_{I elaborated on it during the research leading to my Master’s dissertation, starting from the}

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share the same framework of premises, principles, and goals as the GNEs14. In addition, they are to function in a similar way of the GNEs; just to mention some elements, as they appear in the Constitutive Act of one of these mixed enterprises: they operate according to productive efficiency, they have to be self-sustainable, and they are to foster alliance between resources of different participating countries (República Bolivariana de Venezuela, 2010). Nonetheless, having said so, they are not GNEs: in the case of the GNEs, the goal of creating regional productive chains reflects in their institutional character, as each GNE is a compound entity composed by more than one mixed enterprise (Solórzano Cavalieri, 2012: 138, 192). Thus, it is structurally bound to act regionally: its “business plan” is developed according to a regional planning, the Grand-National Planning. Consequently, the GNEs are ultimately managed by an intergovernmental commission; it is not so in the case of mixed enterprises. Moreover, as it has been shown in the previous section, each of the mixed enterprise comprising a given GNE sees as its majority shareholder a different state, depending on the country where it is situated15. As a consequence, a given GNE is made of “various enterprises, each of them of a different nationality” (Solórzano Cavalieri, 2012: 138). A mixed enterprise instead is a simpler juridical figure (it is in fact a single enterprise), which – though having within its shareholders public entities of different nationality – is to all intents and purposes a single enterprise ruled by the laws of the country where it is situated.

The similarities between the two juridical figures are evident, not only from a substantial point of view, but also from a formal one. It may be argued that mixed enterprises, which are easier institutions to put in motion and are rooted in the history and tradition of public multinational enterprises – and which emerged within the ALBA previously than the GNEs, have achieved far greater results, and are absolutely predominant by number and economic significance –, are thought to tend towards effectively becoming Grand-National Enterprises. It would be a development that would link such enterprises more neatly with the creation of the shared development economic area of the ECOALBA-TCP. This interpretation is somewhat confirmed by the names that these mixed enterprises are assigned with. Examples are:

14

For instance, in the Constitutive Act of the mixed enterprise Grand-National Enterprise for Telecommunications (ALBATEL), we read that the firm aims at: “Fostering integral lasting and

sustainable development of the peoples member to the Bolivarian Alliance for the Peoples of our America […], as a fundamental support for the Struggle of Ideas brought forward by its member countries […]. At the same time, it will pursue the constant enhancement of knowledge and of the life standard and of the dignity of the population”. Among the principles behind it, we find the same principles inspiring the ALBA and its GNEs. For instance, we find mention of: complementarity, cooperation, equity, solidarity, brotherhood and respect for national

sovereignty; the promotion of endogenous development; Fair Trade (República Bolivariana de Venezuela, 2010).

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 The Grand-National Enterprise for Telecommunications (ALBATEL): it sees the participation of all the five Spanish speaking countries member to the ALBA-TCP; it has its headquarters in Caracas (ALBATEL S.A. official website). At its foundation, in August 2010, its capital was worth 2,150,400 Bolívares (República Bolivariana de Venezuela, 2010); the Bank of the ALBA is currently funding some of its projects (SELA, 2013: 19).

 The Grand-National for Mining Mariscal Sucre: Venezuela and Ecuador are the countries that hold its shares; it is located in Quito. It is currently deploying its operations in two sites in Ecuador, and apparently complying with its annual objectives (Gran Nacional Minera Mariscal Sucre C.E.M. official website; Torres, 2014).

In other cases, even though the term “Grand-National” does not appear, the mixed enterprises mention in their name the ALBA acronym. Examples are:

 The enterprise ALBA de Nicaragua s.a. (ALBANISA), owned by the public oil companies of Venezuela (PDVSA, 51%) and Nicaragua (Petronic, 49%) (Central America Data, 2009)16. It is located in Managua and guarantees to Nicaragua favour conditions for the purchase of Venezuelan oil: Nicaragua is even authorised to pay the oil bill in goods17.

 The ALBA Cultural Fund: this is an extremely significant case of mixed enterprise, and holds peculiar features which bring many scholars and also official sources (Alba Cultural official website) to consider it a GNE. It is not so, as acknowledged by PDVSA official webpage (directly managed by the Venezuelan government), which provides the most accurate account on the firm. It was founded in Caracas in 2007 as a mixed enterprise between Cuba and Venezuela; it then increased its scopes up to the generation – following the 2008 Conceptualisation of the Grand-National Projects and Enterprises in the Framework of the ALBA – of the Grand-National Project ALBA Cultural18: “as a political-cultural project, it can already count on the important instrument of the ALBA Cultural Fund, whose pivotal importance is enhanced by its juridical personality, capacity for managing resources and entrepreneurial vitality” (Petróleos de Venezuela, S.A., official website). What makes this mixed

16

These shares are in fact in contrast with those generally characteristic of the GNEs, as previously presented: here the foreign country has the majority share.

17

For the purpose, another mixed enterprise has been created: ALBALINISA, a joint venture between ALBANISA and PDVSA, which purchases alimentary commodities from small Nicaraguan private firms and resells them to Venezuelan retail chains (International Monetary Fund, 2013). This and the other listed enterprises make for a further example of the usefulness of using the concept of “ALBA Paradigm”: these are enterprises which formally have not to do with the ALBA-TCP as an institution.

18

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enterprise utterly peculiar – and its borders with the figure of a GNE extremely fuzzy – is the fact it manages the Casas del ALBA (Houses of the ALBA), institutions (and – concretely – buildings) for cultural-political promotion which are being built all through Latin America and the Caribbean. Thus its influence already spreads in the whole region, generating integrated chains spreading throughout the region. Its three years strategic plan for 2008-2010 could count on 20 million of US dollar (Petróleos de Venezuela, S.A., official website). I made just a few examples of mixed enterprises; it actually is an extremely relevant element within the “ALBA Paradigm”, most notably developed in the bilateral relationship Cuba-Venezuela19: according to Romero, as for as 2011, 36 mixed enterprises involving the two states were already set up and running, while 200 were in the final phase of negotiation20 (Romero, 2011: 185-186).

Now I briefly consider the confusion regarding the relationship between the GNEs and other transnational public companies21. The ambiguities derive from the fact that: “Until the ALBA-TCP does not constitute juridically and the member states do not create a regulative body for this type of enterprise, these enterprises fall within the regulations and categories currently existing in national and international law, taking the characteristics proper to the transnational state companies, as they are recognised by the United Nations” (Solórzano Cavalieri, 2012: 174-175).

19_{Though one of the most relevant examples of mixed enterprise – if not the most successful at}

all – is that of Telesur, the Television of the South, “a Latin American communication multimedia with a social vocation, oriented at leading and promoting the processes of union of the peoples of the South”. It started broadcasting in 2005 and it definitely goes beyond the borders of the Alliance. First of all, its free broadcasting covers the whole American continent, Europe, Middle East, and North Africa. There are a Spanish version and an English one. Secondly, besides the five largest members of the Alliance, it includes among its shareholders Argentina and Uruguay as well (Telesur official website). Its cultural, political, and ideological relevance is difficult to overestimate: “[it] is a highly efficient instrument of radical identity formation and social

transformation at inventing counter-hegemonic representations, creating a new common sense, propagating critical knowledge so as to challenge pre-given representations and the existing common sense” (Gürcan, 2010: 27).

20

For how much overlapping of the lists of different types of enterprises (mixed, GNEs, etc.) there may be, the relevance of these figures is all but unquestionable. Of extreme interest, among them, those enterprises comprising a wider project labelled Building Food Sovereignty!: they are the Socialist Mixed Enterprise Porcinos del ALBA (pork meat), the Socialist Mixed Enterprise Arroz del ALBA (rice), the Socialist Mixed Enterprise PESCALBA (fish), the Socialist Mixed Enterprise Lácteos del ALBA (dairy), the Socialist Mixed Enterprise Avícola del ALBA

(poultry), and the Socialist Mixed Enterprise Leguminosas del ALBA (legumes) (Porcinos del ALBA S.A., official website).

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However, although in principle the GNEs share with the TNCs some juridical features, such as22:

 they have a single decisional centre, as previously shown;

 they work according to a transnational planning; in the case of the GNEs is the Grand-National Planning;

 they are characterised by a flexible organisational structure;

 they are public enterprises, as it may well be in the case of public transnational enterprises;

 they are projected to manage considerable capital and to have subsidiaries in different countries;

they cannot be assimilated to TNCs, as they have been created exactly with the purpose of opposing them. Their principles are utterly different – if not contrasting – and they insert within the “ALBA Paradigm”, a framework conceived and historically declined with the very objective of generating an alternative to the so called neo-liberal economic order, which has at its core the TNCs.

However, there is a crucial element to point out – concerning the GNEs’ future perspectives – as it has been remarked – with the usual accuracy – by Solórzano Cavalieri: “Considering that the principles opposing the transnational companies […] are included in a declarative and not binding document, while the Grand-National Enterprises, on the contrary, have a juridical stability doomed to last independently from political interstates relationships, […] it may happen that in the future the Grand-National Enterprises may lost their principled nature” (Solórzano Cavalieri, 2012: 175). It is a perspective to evaluate, as in the intentions of the ALBA-TCP governments the GNEs have not been created to play a role similar to that of the TNCs: they have not been simply conceived as transnational companies with some sort of social responsibility.

An integration between trade flows and productive chains to

understand the role of the Grand-National Enterprises

The ECOALBA-TCP does not present itself as a free trade area; it is instead conceived as a “shared development area”. Thus, it should be addressed as such: data on trade, for instance, are not to be seen – most notably at this embryonic stage of development of the ECOALBA-TCP – as a parameter for the assessment of the results of the project23. Furthermore, the available data are on trade in goods; services are not

22

The list is taken, with minor modifications, from Solórzano Cavalieri (Solórzano Cavalieri, 2012: 174).

23_{“It [i.e. the ALBA-TCP] is grounded on the idea that integration cannot be limited to trade,}

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included. It is likely that this factor reduces much the breadth of trade relations within the ECOALBA-TCP. The whole project actually builds upon Cuban exports in medical services and in services connected to education. In addition, other factors tend to deflate the significance of trade within the ALBA, such as compensated trade.

Having said so, economic relationships between member states are worth being investigated; moreover, I consider this investigation unavoidable when dealing with the Grand-National Enterprises: in order to analyse both their current deployment and their future possibilities. Although other scholars (among them Ramírez Cruz, 2013) and even the ALBA-TCP Secretariat (Zambrano, 2011) have been trying to address the matter, the most advanced and reliable investigation is undoubtedly that conducted within a research initiative of the Business Administration Faculty of the University of Puerto Rico – Recinto de Rio Piedras. It is also the most thoughtful and knowledgeable, as the leader of the group, Maribel Aponte García, has been dealing with the subject for many years (see for instance Aponte García, 2009; Aponte García, 2011). Alongside with the results, there we find most advanced methodological approach – and the one I consider the most interesting, which is carefully described before presenting the data. I now briefly outline the results of the mentioned research, adding a few considerations of mine concerning further developments of such investigation.

Two are the outstanding features of Aponte García’s most recent work concerning trade flows (Aponte García, 2014): firstly, commercial flows – whose data are taken from the UN Comtrade database – are re-elaborated according to the Grand-National Projects and Enterprises fields of action. Secondly, there is the attempt to link the analysis of trade flows with that of production and productive chains.

The results of the study are the following. The increase in trade from the pre-ALBA-TCP period 1998-2004) to the post-ALBA-pre-ALBA-TCP (2005-2011) amounted to 42%: trade between the ALBA-TCP members increased from 6.4798 billion of US dollars (1998-2004) to 9.1937 billion (2005-2011). Thus the year of the foundation of the ALBA-TCP splits the overall amount of trade (15.676 billion) in two parts, one amounting to 41%, the other to 59% (Aponte García, 2014: 207-209).This is a considerable result, also taking into account the different economic situation the countries had to face in the two periods: the second time lapse was in fact characterised by the outburst of the economic crisis. I would comment as missing an analysis integrating the growth in trade flows with that in total GDP: apparently, however, taking into account the mentioned aspect does not alter the relevance of the rising trend. As a matter of fact, aggregating the data of the overall GDP expansion in the ALBA-TCP period for the five largest members (CEPALSTAT data), accounting for more than 99% of the overall

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ALBA-TCP economy, the expansion in GDP was approximately 38% for the period 2005-2011, thus lower than the expansion in trade.

It is outstanding that – contrary to the main critique raised towards the Alliance (for instance, see Burges, 2007)24, and according to the mentioned study – the sector which experienced the largest increase in exports is not oil. Instead, oil is one of the few which experienced a decline, probably the steepest. On the other hand, the fields of action of GNEs and GNPs which had the best performances were those of foodstuffs and agriculture, whose importance more than doubled in the second period considered, and of industrial supply, while the sector which grew the most is that connected with health and medicine, which more than tripled.

The evolution of the most important five fields of trade is analysed in the considered book; however, there is no elaboration on the underlying trends which could have been obtained from the data. In effect, while the trend in oil trade is anything but regular, showing peaks and troughs, two sectors show a clear ascending trend for the 14-year long period: industrial supplies and foodstuffs. For the latter the ALBA-TCP creation apparently marks a turning point, starting from which the slope has acquired a higher momentum, not affected by the global crisis. It is a significant feature to remark.

What highlighted so far, makes for a necessary introduction for the attempt to integrate the analysis on trade flows to that on productive chains. Figure 3 shows – in thousands of US dollars – the evolution of trade flows disaggregated according to the BEC classification (Broad Economic Categories). What already said on the industrial categories which displayed the best performances allows for drawing some implications connected with the data depicted in the following figure. To be fair, the text at the basis of this section does not expand on this cross checking, which in my opinion it should be the starting point for further research. We may infer that the fields of exports which experienced the best performances in the ALBA-TCP period, being composed by just a narrow number of sectors so markedly outperforming the others, are in fact those in which the trade in intermediate goods had the greatest relevance. Thus, in those sectors the scope for the actual realisation of GNEs and the consequent development of productive chains is apparently more significant. In any case, Figure 3 deserves a great deal of attention in itself.

Figure 3

Intra-ALBA-TCP trade by industrial categories, 1998-2004 and 2005-2011

stocks (thousand US$)

24

It is the opinion of the influential journal The Economist, as well (among other articles: The Economist, 2005). Briceño Ruiz introduces the hypothesis of the ALBA being an

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*First set of columns: Capital; second set of columns: Consumer goods; third set of columns:

Intermediate goods; fourth set of columns: Primary goods.

Source: Aponte García, 2014: 212.

Again, contrary to the “dependency on oil” critique to the ALBA-TCP, the graph highlights that the exports in primary goods are those which actually declined passing from the pre-Alliance period, to the Alliance one. Massive is instead the growth in intermediary commodities exchange. Consumer goods rose as well, but the category which marked the best performance is that of capital: it more than doubled, even though still representing the least significant. This class is a particular one: “not directly connected with a ring of the chain, but with the chain as a whole” (Aponte García, 2014: 204), is a sort of factor which may allow the development of the chains.

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they were given in an official publication of the Commission (Durán Lima and Alvarez, 2008). In the following table the figures – as calculated by Ramírez – are shown.

Table 1

Intra-ALBA-TCP Trade Index and Intra-ALBA-TCP Trade Intensity Index,

2004-2011

2004 2005 2006 2007 2008 2009 2010 2011

ITI 6.46 5.37 5.09 6.50 8.88 5.61 5.66 5.87

ITII 18.01 12.04 10.25 23.09 29.15 18.90 23.81 11.19

Source: Ramírez Cruz, 2013: 74,76.

With regards to the ITI, not only values are low if compared with those of other Latin American integration blocs, but also no clear trend is visible. In addition, while interpreting absolute values of the ITII is a much disputed operation, what can be said for sure is that no clear trend is anyway visible, not even in this case.

One major explanation for this lacklustre performance in trade within the ALBA-TCP is that its members have trade patterns conditioned by other integration agreements they are participating to; this is particularly relevant in the case of South American countries. Venezuela has among its five biggest trading partners Colombia, member of the Andean Community (CAN, by its Spanish acronym), which Venezuela withdrew from in 2006; and Brazil, the most prominent MERCOSUR member. This is even more striking in the case of Ecuador: its second, third and fourth export partners – respectively Chile, Peru and Colombia – are all members of the CAN, which includes Ecuador itself and Bolivia as well. The latter is apparently not so heavily influenced by its participation to that scheme, being Peru the only CAN member state to mention among its major trading partners.

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Table 2

ALBA-TCP members’ five biggest trading partner in 2013 (as a percentage

of total exports and imports)

Exports

Venezuela Ecuador Cuba Bolivia Nicaragua

1 USA 26.4 USA 44.6 Venezuela 40.3 Brazil 31.1 USA 45.9

2 China 11.9 Chile 9.9 China 13 Argentina 17.9 Mexico 13.2

3 Colombia 11.2 Peru 7.5 Canada 11.9 USA 14.8 Venezuela 8.3

4 Netherlan ds

9.1 Colombia 3.7 Netherland s

10.9 Peru 5.3 Canada 7.3

5 Brazil 8.3 Russia 3.3 Spain 2.7 Japan 3.7 El Salvador 4.5

Imports

1 USA 23.5 USA 25.2 Venezuela 42.3 Brazil 18.4 USA 17.9

2 China 16.9 China 16.7 China 9.2 China 13.1 China 12.5

3 Brazil 10.1 Colombia 8 Spain 7.3 Argentina 13.1 Net. Antilles

9.8

4 Mexico 5 Panama 4.8 Brazil 4.6 USA 11 Mexico 9

5 Colombia 4.8 Mexico 4.3 Canada 3.4 Peru 6.7 Costa Rica 8.9 *For Cuba: 2012 Oficina Nacional de Estadísticas website data. For Bolivia: 2012 data.

Source: my elaboration based on International Trade Centre data.

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The only other figure showing a significant relationship in the pattern of trade between the ALBA-TCP members is the one for Nicaragua, which sees Venezuela as its third exports destination. In this case the political commitment25 behind the evolution of trade flow is clear, as explained in this example by Muhr: “For instance, the […] [agreement] signed between Venezuela and Nicaragua on 11 January 2007, foresees the purchase of 1.250 metric tons of red beans at a fixed rate above the world market price by Venezuela […] [from a Nicaraguan] peasant umbrella organisation. This means a diversion of exports which under FTA/DRCAFTA would have gone to the North at lower world market prices” (Muhr, 2008: 154. Emphasis is mine). Thus, although Nicaragua is part of a FTA including the US, and notwithstanding the fact that its exports to all world areas declined by between 6.6% and 37.5% between 2008 and 2009, in the same period exports to Venezuela rose by almost 300% (Muhr, 2011: 112). In this case we are really witnessing a process of trade reconfiguration, which brought the figure for Nicaraguan exports to Venezuela to the considerable share of 8.3% of the overall value.

Venezuela may in fact be seen as the central point of a radial structure of trade: this is well emphasised by the feature that the bilateral trade of the ALBA-TCP members with the Bolivarian Republic amounts to more than 88% of the overall intra-Alliance trade flows for 2011, or approximately 1.82 billion of US dollars out of roughly 2.07 billion (UN Comtrade data)26. However, although Venezuelan imports from the ALBA-TCP countries sharply rose by 90.7% between 2006 and 2009 (Muhr, 2011b: 112), which of course is a remarkable result, in 2011 they represented a share of just 4.63% of the country’s total imports (UN Comtrade data).

Overall it can be said that trade flows between the members of the Alliance have increased significantly, though they still amount to a marginal portion of members states’ trade. Further qualitative studies would be needed; I trace here just a few hints on the matter. First of all, as already mentioned, the considered data neglect the component of trade in services27: it is reasonable to presume they are relevant, particularly in the case of Cuba. Not only is this inferable by its strong surplus in the

25_{It is however to be remarked that: “It is not a matter of governments taking the political}

decision to set up trade; rather, the economic conditions reciprocally offered must be

competitive […], otherwise the creation of the economic zone will be fictitious. It is not an act of political voluntarism applied to trade what will ensure the sustainability of the project” (García Lorenzo, 2012: 219).

26

Although I verified inconsistences with the data obtainable from each country national statistic unit, I believe the percentage to be reliable, at least to get an idea of the bias. Moreover all of the data used to calculate the 2011 trade flows come from the same database, thus they share the same criteria. I am considering here just the five largest countries of the Alliance.

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balance on services (CEPALSTAT data). But also, trade in Cuban services is actually precisely what the whole ALBA-TCP is grounded on. It in fact took off from the notorious Oil for Doctors agreement between the island and Venezuela. Since then, Cuba has exported its services, most notably in the medical and in the education sectors, to all the other members of the Alliance. This is confirmed by many accounts and statistics – especially connected to social achievements. The Oil for Doctors exchange may also be taken as an example to illustrate another general attitude characterising the whole ALBA Paradigm and affecting trade figures, pushing them downwards. Since that agreement, compensated trade has in fact become one of the most important features of Fair Trade in the context of the ALBA, and it is an institutionalised principle both in the ALBA-TCP and in Petrocaribe28.

It is not clear how this is recorded in trade statistics; it is reasonable to suspect that schemes of compensated trade of a vast scale such as those realised within the ALBA-TCP lead to an underestimation of the figures. Furthermore, although the GNE ALBAEXIM is in course of being realised for the purpose of increasing trade relations between member states, in the framework of the ALBA Paradigm – as already shown – trade holds a status all but instrumental: the development of trade within members is neither its primary object nor its primary objective. This entails a series of implication on trade policies, as they are not necessarily aimed at improving trade relations.

Foreign direct investment and economic policy autonomy

In the assessment of the current situation of the ECOALBA-TCP and of the elements which are of help in evaluating potentialities for further viable development, I propose integrating data on trade with data on foreign direct investment (FDI). Analysing FDI flows and stocks is an extremely complex task, one which I cannot deal with exhaustively here. Also because – to my knowledge – there are no published studies available on the matter specifically focussed on the ALBA-TCP countries. Nonetheless, the Cuban scholar Tania García Lorenzo is working on the subject; it is her who highlighted to me the importance of taking FDI into account as an element to be considered when investigating the margins for autonomous economic policies the ALBA-TCP may or may not be able to have. In the following quote from her works, it is definitely clear how important is to go beyond the analytical focus on trade; this matches with the material necessity to move from trade relations among members, to productive integration. It may serve as well as a final word commenting on the size of trade flows: “There are integrations which improve interdependency, with no impact in the dependency towards others. This is a fundamental point in the analysis, as what shape dependency and independency are the accumulation pattern, propriety relationships, production’s relationships and not the model of international insertion used” (García Lorenzo, 2011: 124).

28

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An investigation on all these issues is obviously out of reach; this section will be limited to provide some guidelines and hints on FDI.

The starting point may be assessing FDI intensity, showing the ratio of incoming FDI stock to GDP for each of the five major member states. FDI intensity is conventionally taken as an indicator for the openness of a given economy (Higginbottom, 2013: 194). The figures for this indicator included in the table below are the most updated ones (2013), as they can be found in the 2014 World Investment Report edited by the UNCTAD – with the exception of Cuba, whose data refer to 2011. On the other hand, those concerning the largest investors by country of origin refer to 2012: those were the most recent data available29.

Table 3

ALBA-TCP 2013 FDI stock (million US$ and percentage to GDP), and 2012

stocks by country of origin (percentage on total stock)

FDI

stock

(million

US$)

FDI stock

(percenta

ge GDP)

1st FDI origin

(percentage on

total stock)

2nd FDI origin

(percentage

on total

stock)

3rd FDI origin

(percentage on

total stock)

Venezuela 55766 14.9 Netherlands 17.4 USA 15.8 France 7.2

Ecuador 13785 14.6 Mexico 10.6 USA 6.5 Switzerland 5.2

Cuba 426.65 0.6 n.a.30

Bolivia 10558 35.4 Spain 30.9 Brazil 12 UK 10.7

Nicaragua 7319 64.9 Mexico 5.5 USA 3.4 Denmark 0.3

Source: based on CEPALSTAT31; UNCTAD World Investment Report 201432; UNCTADSTAT33;

knoema34.

29

Data concerning countries of origin for stocks of FDI in Nicaragua and Ecuador were not exhaustively including all the sources of FDI; they thus may be disputable, though I presume that the tables presented by the UNCTAD comprehend all the most relevant sources of FDI.

30

There are no available data for Cuba. A report resulting from the collaboration of the Cuban Centre for the Studies of the Cuban Economy with the European Union, dating 2012, refers that at the end of 2009 there were 307 foreign economic businesses in Cuba; among them, 45% were Spanish, 10% Canadian, and 10% Italian (Vidal Alejandro, et al., 2012). Though, we are facing all but negligible amounts and percentages of GDP.

31

FDI stock: 2011 data for Cuba, 2013 for all the others.

32

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Even in this case, Cuba shows its peculiar situation: the stock of FDIs currently present in the country is all but negligible, resulting from insignificant flows, which only in the most recent years have slightly risen, still at levels incomparably lower than the other members of the Alliance. At the opposite side of the board Nicaragua stands out as an extremely open economy; this has also to do with its special relationship with the US, which was clear looking at trade flows too, highlighted by its participation in a FTA with the Northern neighbour. Nonetheless, the Nicaraguan FDI stock appears to be more fragmented than that of any other country of the Alliance, even though, as mentioned, the UNCTAD does not provide a complete outline of this state’s situation. With a FDI stock of almost 65% share of GDP, and FDI flows over 10% in 2011, it is legitimate to raise the doubt that its government may not be able to thoroughly control the dynamics behind its economic policies. Thus even the Nicaraguan scope for truly autonomous political and economic stances in the framework of the ALBA may be questioned. It is something we could have suspected considering its participation to the free trade, neoliberal agreement CAFTA-DR.

Bolivia is a considerably open economy, though the 2013 figure is markedly lower than that for 2000: in that year Bolivia recorded one of the highest values in the continent, with a FDIs intensity of almost 62%. The declining path in its “dependence on FDIs” is the result of measures taken “in direct response to the popular water wars and gas war that brought Evo Morales to government” (Higginbottom, 2013: 194-195)35_{. Bolivia is}

also the only state among the considered ones not to have the United States within its three most relevant foreign holders of FDI stocks. On the other hand, they seem to be extremely concentrated in the hands of its first FDI partner, Spain, which holds a stock with the value of more than 3.2 billion of US dollars. Also Venezuelan and Ecuadorian figures for FDI intensity, the lowest among the ALBA-TCP members, are the result of a declining path, which brought the two countries to more than halve their values in slightly more than ten years: the 2000 figures were respectively 30.3% and 39.8%. “The governments of Bolivia, Ecuador, and Venezuela carried out limited nationalizations in 2006 and 2007 and have increased their regulation of foreign investment over the past decade […]. In Venezuela, Hugo Chávez has regained control of the hydrocarbon sector from the domination of foreign capital […]. What is clear is that they have sought less one-sided terms of engagement with foreign investors. They have all withdrawn from the World Bank’s International Center for the Settlement of Investment Disputes” (Higginbottom, 2013: 195)36_.

33

FDI by country of origin.

34

Cuban data.

35

The historical series data quoted in this paragraph are also from this paper.

36

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It is not surprising then to find these three countries, together with Cuba, as the most prominent promoters of the “ALBA Paradigm” and its autonomous pattern of development seeking what they call “the second and true independence of our region”. Nonetheless, it is also to be said, in relation with the latter quoted sentence on the withdrawal from the ICSID, that the flows of FDIs do not show a clear declining path in the years of the Alliance. This will be outlined further on. It is worth remarking the Venezuelan situation as well, with regards to the US share in the stock of FDIs: it amounts to more than 8.8 billion of US dollars. This is – together with trade relations between the two countries – an element to be considered, not only when assessing the perspective of the Bolivarian Revolution and the political stands adopted by its leaders, but also when analysing the viability of the ECOALBA-TCP project. Moreover, in no state of the Alliance any other member comes even close to be a major exporter of FDIs.

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Figure 4

FDI flows towards ALBA-TCP biggest members, 2004-2013 (percentage to

GDP)

Source: my elaboration based on CEPALSTAT data37.

Although the FDIs component generally is not a volatile one among the different components of international flows of capitals – as shown by the no more than mild decline that the countries included in the graph experienced in the years of the outburst of the crisis – these flows may actually hide elements to be considered when evaluating the scope for autonomous economic policies in the framework of the would-be economic space ECOALBA-TCP. Of course, how FDI flows actually affect an economic system depends much on a given government’s regulation and intervention in the matter; which are topics well at the core of the “ALBA Paradigm”38_.

It is important emphasising that the introductive outline carried out in this section has no claims of being exhaustive. There are anyway a number of observations that can be drawn. The United States presence is relevant but not overwhelming; this remark, however, should be supported by an analysis of the sectors which FDIs are directed to. Preliminary results of the complex investigation Tania García is committed to, suggest

37

Data for Cuba come from Index Mundi.

38_{“It is not a matter of how much domestic and how much foreign market is favoured in}