Sur Solidarity: Bolivarian Dreams of Integration Confront Economic Reality

Sudden and sharp shifts in commodities and financial markets in the last few months are realigning geopolitics worldwide. Venezuelan President Hugo Chávez, whose ambitions are greased by oil wealth, is taking an especially hard hit. An early casualty of the global economic slide could be the regional alliances promoted by Chávez to challenge what he considered U.S. hegemony in Latin America.

Even before trouble hit the oil market, Chávez was having problems turning his dream of a unified Latin America into reality. His Bolivarian Alternative for the Americas (ALBA) was intended to thwart the U.S.-promoted Free Trade Area of the Americas. To put teeth into ALBA, Chávez launched the Banco del Sur, a regional bank signed into existence in December 2007 by founding members Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay, and Venezuela. Banco del Sur hoped to raise between $7 billion and $10 billion that would be used to capitalize loans for social programs and for an interlocking grid of highways, bridges, waterways, ports, and power lines...