The Privatization Of Venezuelan Aid

Nicaragua & ALBANISA: The Privatization Of Venezuelan Aid

After Nicaraguan President Daniel Ortega took office for his second presidential term in 2007, Venezuela’s Hugo Chávez announced his plan to meet Nicaragua’s oil needs. The leaders’ ideological ties led Ortega to push for Nicaragua’s membership in the Alianza Bolivariana para los Pueblos de Nuestra América (ALBA). The Venezuelan President established this political bloc with the intention of countering the U.S. ambition for a Free Trade Area of the Americas or Acuerdo de Libre Comercio de las Américas (ALCA). Comprising leftist nations such as Venezuela, Cuba, Bolivia, and Ecuador, ALBA seeks to promote an ideology of solidarity that emphasizes social welfare policies rather than the kind of competitive capitalist agreements that have pervaded throughout the hemisphere in its recent history. While ALBA serves as a symbolic opposition to the free trade agreements that the U.S. has negotiated with desperate Latin American regimes in the past, many skeptics have debated its practical impact due to a lack of concrete results produced by the Chávez-led body. Nicaragua’s simultaneous membership in the Central American Free Trade Agreement (CAFTA) suggests that ALBA does not quite play the revolutionary role to which its proponents initially aspired. (For more on ALBA, see COHA’s report here)

ALBA has proved a destabilizing force in an already polarized political environment. In Nicaragua, Venezuelan cooperation through ALBA led to the creation of a private company called ALBANISA (ALBA de Nicaragua, S.A) to manage the anticipated investment funds. The company has come under a great deal of heat: as a privately held company, ALBANISA is not required to disclose its funds to the public. However, it has turned out that the government has used its funds for state expenses. The secrecy enveloping ALBANISA expenditures has led some to fear the worst.

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This analysis was prepared by COHA Research Associate Brendan Riley

ENDS