The Unasur economy and finance ministers, meeting in Buenos Aires to discuss measures to brace the South American bloc for impact of the international financial crisis, suggested to create a South American or Latin American reserve fund and adopt the use of regional trade compensation systems, which could include the SUCRE, Venezuelan President Hugo Chávez said on the Contra Golpe TV show.
The final document of the three-day meeting in Buenos Aires that ended Nov. 25 will frame the discussion at a summit of Unasur presidents Dec. 3 in Caracas.
An expansion of the SUCRE system, of which Cuba is a part, to the larger South American economies would make its use much more attractive for supply- and hard currency-starved Cuban companies. The SUCRE aims at growing intra-regional trade by eliminating the expensive use of dollars and euros in transactions between regional economies.
Chávez, who called the meeting in Buenos Aires a “total, big success,” said there was “consensus” among the ministers about the Venezuelan proposals, which included creation of the fund and the Banco del Sur development bank, as well as adoption of the SUCRE trade compensation system. He cautioned that the final document still “required many definitions.”
In addition to the SUCRE, which was introduced by the ALBA bloc early last year, another compensation system has been in use: In 2008, a bilateral system began to function between Brazil and Argentina. Also, the SUCRE system includes two countries outside the Unasur bloc — Cuba and Nicaragua.
It is not clear how the bloc could adopt two trade compensation systems. According to Argentine Economy Minister Amado Boudou, who chairs the Unasur economic working group, the ministers agreed that Unasur “needs two or several efficient payment and compensation systems.”
Unasur encompasses all 12 South American countries, including Brazil.
The use of the SUCRE has gradually increased; Banco del ALBA officials expect the 100 mostly state companies from Bolivia, Cuba, Ecuador, Nicaragua and Venezuela that are participating in the system to perform more than 300 trade transactions worth a total of $300 million this year. Goods involved in the transactions range from palm oil to rice, textiles and pharmaceuticals.
Although the the very first SUCRE transaction was a rice purchase of a Cuban state company from a Venezuelan producer, the Cuban government is propagating SUCRE use, and the mechanism could help Cuban companies save money on imports, only a handful of SUCRE transactions have involved businesses on the island. Because most Cuban companies are sourcing supplies in Europe and Canada rather than Venezuela or Ecuador, they are eager to generate dollar or euro income from their exports to fellow ALBA markets.
Even so, an expansion of the SUCRE to include larger producing markets such as Brazil or Argentina would make the system much more appealing to Cuban companies.
