Alejandro Bendaña*

If the goal is development — best
defined as sovereign democratic social transformation — then we must
not speak of making the present "aid" modalities more
effective, but of substituting present day aid and the system in
which it unfolds. One begins by questioning the very nature of the
larger international financial architecture, what it stands for, and
who benefits primarily from it.

"Development aid" as
practiced by the North is part of a system that generates deepening
inequality and dependence across and within countries. In this
context, it is a question of making aid less not more effective, of
ending aid altogether, because on the whole it does more harm that

Think Outflows not Inflows. South to
North. For every dollar of aid that goes into developing countries,
ten dollars comes out as capital flight. Yet this is an issue which
regularly gets sidelined in discussions on development. It is much
more important to focus on how to stop the 9 going out than to keep
the 1 coming in. It has been estimated that developing countries lose
more than 500 billion dollars every year in illegal outflows which
are not reported to the authorities and on which no tax gets paid. In
Latin America amounts extracted over the past 30 years may have
reached some 950 billion dollars, according to figures provided by
James Petras.

No amount of aid, foreign direct
investment or even remittances is going to change the structural
equation over the long run. If one is to speak of new inflows then we
should conceive in the form of the payment of the real historical
debt owed by the North to the South — not "aid" or charity
or private philanthropy but reparations, restitutions, compensations,
payment of the ecological debt to the people and environments of the
South. There is a need to escape from a discourse and vision tightly
linked to the perseverance of contemporary power structures,
including the one upheld and practiced by governmental "aid"

Of course there is a need for
developing countries to retain much more of their own domestic
resources, but we must also recognize that it is not simply a
question of the often inexistent will of domestic financial elites
but of internationally generated impediments that are upheld by so
called free trade agreements, investment protection regimes, IMF
conditionalities, and the like that demand ever greater
liberalization of the flow to capital and goods. Aid and loans are
minuscule compared to the profits made at our expense through unfair
trade, exploitation of our labor, appropriation of our resources,

interests on loans, domination of our
markets, privileges and incentives granted to multinational
corporations. Add to that the cost of reparations and restitution.



First you must conceive it. If you
believe there can be no alternative then there will be no
alternative. This is difficult because it entails a paradigm shift.

Second reconceptualize and change the
role of the market. Markets must take their subordinated space in the
organization of a political economy. Markets and big capital cannot
dictate engagement. Markets have to be embedded in society and
therefore in relations of solidarity, not competition. We need a
political approach to economics. You must be clear about your
indicators. If there is no improvement in

the life conditions and dignity of
people 50 miles outside Maputo, Managua or Manila, then it is no
alternative. We can already report that thousands are benefiting from
the new Venezuelan-led development support schemes outside of Managua
in the form of clinics and eye operations.

The alternatives are constructed by the
interplay of idea and politics. Ideas challenge the dominant paradigm
and introduce the alternatives but the goal is for the alternative
paradigm to become hegemonic.


The combination of ideas and political
shifts is being witnessed today in the Venezuelan led international
collaboration scheme known as ALBA (Bolivarian Alternative for the

In 2004, the government of Venezuela
took a political decision to use its massive oil reserves and
earnings to assist other countries in the world with the clearly
stated objective to lessen their dependence on the dominant trading
and financial international order. According to statistics from
Chavez opposition sources who feel that he is giving away national
wealth, 18 co-operation agreements signed by Venezuela last year
alone total some 4.747 billion dollars, chiefly oil and refineries
projects, but also infrastructure, health, agriculture, housing, debt
cancellation, aluminum plants, and others. Most of the agreements are
in Latin America, but include Iran, the UK, China and even Burkina
Faso. [1] ALBA's premise is that a new form of regional integration
and indeed greater political unity is necessary for independent
development to take place.


It was born as an alternative to the
USA's Free Trade Agreement of the Americas — integration to
reinforce sovereignty and just social relations, as opposed to
liberalization and denationalization. Venezuela and Cuba signed the
first series of bilateral agreements and in 2007 Nicaragua and
Bolivia joined ALBA. "A new political and strategic project for
a new world," said Chavez, comprising cooperation in the fields
of health, industry, food production and energy security, with more
social criteria than mercantile. Its founding charter calls for the
establishment of Council of Ministers but also a Council of Social
Movements to help inform decision-making.

In early 2008, the ALBA heads of State,
now including the small island state of Dominica, announced the
creation of the ALBA Bank with a capital of 1 billion dollars. Its
stated aim was to boost industrial

and agricultural production among its
members, support social projects as well as multilateral cooperation
agreements among its members, particularly in the energy field. The
objective was to tackle the negative effects that neo-liberal
globalization, including in finance and trade, was having on its
members. It constitutes yet another piece in the construction of an
alternative international economic order but unlike its predecessor,
the Bank of the South composed by South American nations, the ALBA
Bank is less influenced by the interests of conservative Brazilian
mega-capitalists who wield strong influence in the Bank of the South.
One must however await the publishing of the constituent documents
and the actual project financing procedures before rendering a final

Of greater importance to the Caribbean
and Central American nations was the formation of Petrocaribe in
2007. Fourteen countries, chiefly of the Caribbean, along with
Nicaragua and Honduras, have joined the scheme whereby Venezuela,
through its oil company PDVSA, agrees to guarantee 100% of member
country energy requirements, principally oil and derivatives, at
market prices (Venezuela as a member of OPEC cannot do otherwise),
with 40 to 50% payable within 90 days (terms vary slightly in the
different bilateral accords) and the remainder at an average of 25
years with 2% interest and 2 to 3 years grace. Proceeds of the later,
presumably accumulated by the respective state energy companies or a
designated governmental agency, are to form part of a development
fund for social and infrastructure spending. As in the case of the
ALBA Bank, procedures are being worked out in practice by way of
bilateral negotiations.


Obviously given the sheer novelty and
scale of ALBA makes it difficult to comprehensively assess the
process underway. Nonetheless, as with the Bank of the South, Latin
America's social movements and regional networks are monitoring
closely, and some concerns can, should and have been expressed but
within a framework of general support for the initiative and its
anti-imperialist dynamic.

These concerns revolve around:

— A predilection for mega-projects,
particularly the construction of refineries, pipelines and transport
infrastructure that are of concern to environmental groupings

— Insufficient attention to the need
to contest the dominant oil-centered energy matrix, possibly
perpetuating dependence and consumption of oil

— The fact that PDVSA is the
Venezuelan counterpart institution and apparently in charge of the
key facets of the cooperation including financial and technical

— The difficulty encountered by civil
society organizations (at least in Nicaragua) in obtaining
information about the specific bilateral agreements with
corresponding transparency concerns

— The stated decision of at least one
government (Nicaragua) to privatize the cooperation, handling it as a
private commercial debt and therefore not subject to legislative
budget scrutiny and reporting, prompting suspicions of partisan use
of the funds escaping accountability

— A lack of appreciation for the
autonomy and working dynamics of social movements and their regional
networks who, as a matter of principle, reject the notion of being
"convened" by any government or of allowing the governments
to select which movements should form part of the Social Movements

— The absence of credibility of the
Ortega government in Nicaragua which continues to pursue neo-liberal
and confessional policies and is opposed by the Nicaraguan and Latin
American social movements, particularly its women's contingents

What does this all mean in terms of the
2008 Aid Effectiveness Debate (Accra, 2008) sponsored by OECD and the
UN's Financing for Development (Doha, 2-4 September, 2008)?

 From a social movement
standpoint, including Jubilee South, the "aid effectiveness"
debate is a non-starter. It is a contradiction in terms,

unless the "effectiveness"
works to the benefit of finance capital and is an instrument for
domination, a lubricant for corporate capital penetration. Nor can
there be talk of effectiveness in the context of aid increasingly
becoming an open instrument of security and foreign policy goals,
including the so called war on terror or simply tied to the
acceptance of trade and financial liberalization (for example, the
current EU "partnership agreements").

Entering the aid debate in preparation
for Accra can only be justified if the objective is to utilize that
debate to explain and denounce the institutional and historical
foundations of the international aid regime, and that the emphasis
should be on stopping the inflows of capital and wealth from the
countries of the South.

"Finance for development" is
a more straightforward proposition. The objective should be to better
identify and challenge the international impediments (including
so-called aid) that stand in the way of domestic accumulation and its
domestic mobilization, including the behavior of domestic capitalists
in shipping national wealth abroad, including its citizens expelled
by the impoverishment that is linked to the enrichment of global
elites. Finance for development should take the form of reparations
and restitution due from the North to the South

— the only real, legitimate debt — on
account of centuries of looting and exploitation, including the
wrecking of the environment.

Under no circumstance should we be
under the illusion that "aid" and "loans" by
"donors" — that discourse needs to be rejected — are
intended to "help" the people of the South. To actually
believe that is either "tragic ignorance or unforgivable
arrogance", states Lidy Nacpil, International Coordinator of
Jubilee South


The shift in power is underway, but it
is not complete by any means. The first point to stress is that the
way forward for development cannot be separated from, and indeed
forms part of, the construction of

emancipatory democracy.


Second, to build critical
consciousness, in both North and South, about the centuries old
extraction of wealth from the South to the North, from poor to rich,
within and among countries — not as a policy or technical issue but
as a moral and political one – and to address not simply poverty as a
contemporary reality but as an historical process of enrichment.


Third, to restate the importance of
solidarity and international mobilization of that consciousness. To
put the heat on the street. Without resistance there can be no
alternative — resistance is alternatives in the making. Support for
the right of a people and region to exercise the right of economic
self-determination, part and parcel of real democracy, in the face of
what will be the unremitting hostility of the USA and its allies.
Cuba continues to build its alternative, Venezuela its own, and
Bolivia too — and all are the objectives of USA led destabilization

Fourth, to engage critically. While we
support the greater emphasis on the State now being emphasized in
ALBA and the Bank of the South, we do not wish to substitute the rule
of one group of Northern capitalists by a group of Southern ones.
Banks are problematic and REDES and Jubilee South America have
already made public those concerns. Hopefully at least some of those
concerns will be addressed in the new ALBA Bank configuration. But
one should always keep in mind what Bertolt Brecht said: "What
is the robbing of a bank compared to the founding of a bank?"


Fifth, not to lose sight of the goal of
shifting power, and that is as much a product to be attained in the
future as a process that requires practice in the present. It is not
a matter of simply moving away from Bretton Woods and corporate
capital's domination to State-led ones: the change must be coupled
with a greater democratic shift because to transform the
international reality we have to transform our national ones. We
welcome Venezuela's decisive leadership in breaking some rules of the
game — this historically unprecedented mobilizing of one country's
resources for the benefit of the others, transforming sovereign debt
to solidarity debt. But this is not an end but the beginning, whether
the governments like it or not. Aid, banks and debt are instruments
of social and political control.


The shift of power as a shift away from
capitalist mentalities and paradigms, where

  • People are considered not as
    consumers but as citizens
  • Countries are not seen as
    markets but as nations
  • Capital and governments serve
    people and not the other way around


Forging a new development model and
development solidarity architecture is fundamentally a political and
a social task. It is one expression of the larger struggle for human
rights and sovereignty, and that struggle must increasingly be more
led by women and youth and less by white men. By social movements, by
uncivil society, in our continent by the indigenous and the
environmental and debt movements who demand not aid effectiveness but
historical justice in the form of the payment of the social and
ecological debt that has accumulated over the past five centuries.


Support for alternative development
path means support for the right and ability of the poor to build
their own independent movements and bring sustained political
pressure from below. Advancing "non-reformist reform"
coalitions that can push state power to implement real development
policies that are justice based. Support for and participation of
movements that will struggle for solidarity economies, for national
democratic governance, and for changes in financial and economic
policies, structures and systems that can allow alternatives to be


We need to bring more movements into
the picture, as this struggle is certainly not technical but
political and therefore alliances must be constructed. At this
conference we could have benefited from the presence of leaders of
the native aboriginal communities in Canada who no doubt would have
key things to say about development assistance. With your
environmentalists and their fight against tar sands exploitation
which is making the world poorer. With peace and justice advocates
that contest the notion that Canadian troops are bringing development
and peace to Afghanistan. Without the involvement of movements and
their perspectives on alternatives the Accra and Doha conferences
will simply mean two more boring male-dominated meetings

In 1933, John Maynard Keynes wrote,
"[Capitalism] is not a success. It is not intelligent, it is not
beautiful, it is not just, it is not virtuous — and it doesn't
deliver the goods. In short, we dislike it, and we are beginning to
despise it. But when we wonder what to put in its place, we are
extremely perplexed."


Well in much of Latin America people
are no longer perplexed and are beginning to put something in its
place, as did the Cubans some 50 years ago. Socialism or, better
stated, socialisms in the plural for the 21st century are back on the
drawing board — not following any model or purporting to invent any
one model, but as a set of principles to guide human interaction in
all its diversity and in its relation to


Progress is being made although we
don't know where we will be at the end of the day, but in Latin
America we are convinced that there is a new political dawn of
certainty and decision that must be supported and extended.


* Alejandro Bendana is the director of
Centro de Estudios Internacionales (Centre for International
Studies), Nicaragua. This paper was presented at the conference "The
Changing Face of Global Development Finance: Impacts and implications
for aid, development, the South and the Bretton Woods Institutions,"
Halifax Initiative, Ottawa, Canada, February 1-2, 2008.

(1)  "Ayuda de Hugo Chávez
en crisis", La Prensa, (Managua), January 15, 2008. Figures by
the opposition Centro de Investigaciones Económicas de
Venezuela (CIECA)