Authors:
José Alberto López Rafaschieri and Luis Alberto López Rafaschieri
www.morochos.net
One theme that emerges from the ALBA proposal to establish the sucre as a common currency, is the exchange rate stability.
From a macroeconomic perspective, the smallest economies are the most vulnerable to domestic and international events. In that sense, a common currency would be beneficial for the ALBA countries as it would be backed by a larger economy, which would allow the new monetary unit to better withstand the impact of the economic problems than the currency of a single nation could resist.
However, that's the theory, because a practical problem for the sucre is that the ALBA is composed of only nine members -of which Venezuela is the only with resources for such a project- and has failed to attract the interest of giants like Brazil and Mexico. This creates an obstacle because those who make up the Bolivarian Alternative for Latin America and the Caribbean are small economies with serious difficulties, that will have many setbacks when devoting resources to support a multinational exchange rate.
Therefore, until the leading nations of the region do not join the ALBA, it will threaten the goal of the sucre to provide exchange rate stability to the countries that adopt it.
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