Caracas, Mar 6. ABN.- Laura is from Bolivia, in a future she will not have to request dollars to visit her friends in Quito. Miguel, from Nicaragua, will not need bolivares to spend some days in Caracas. Raul, from Venezuela, will forget the cordobas to go to Managua, as well as Julia, from Cuba, with the lempira to visit Tegucigalpa.

Adrian and Luis, both from Ecuador, want to visit La Havana and shall not need Cuban pesos. And Jose, from Honduras, who always goes to La Paz, will stop buying bolivianos, because the Sucre will be the single currency used in the region.

This is just part of what the people, living in the countries proposing a single regional currency, could do.

The same happened with the citizens of the European Union. They never imagined that twenty years after the creation of the European Currency Unit (ECU) in 1979, they would have the Euro, a regional currency that has brought direct benefits to the people traveling by the Euro zone, because they do not lose time or money exchanging currencies.

The Sucre

The Unique System of Regional Compensation, Sucre for its Spanish acronym, which is also the name of the former Ecuadorian currency – Ecuador dollarized its economy in 2000-, is another idea of the members of the Bolivarian Alternative for the Peoples of Our America (Alba) and Ecuador, as a proposal to face world economic crisis.

The Sucre does not exist yet. Member countries are still in talks, but its creation is a reality because it counts with the necessary political will of a bloc of countries of the region.

In its beginnings, the Sucre will be a currency with no physical emission. It will be used for trade and financial exchanges between the countries of the region. The States that are part of this initiative are: Bolivia, Cuba, Dominica, Honduras, Nicaragua, Venezuela and Ecuador.

The Sucre will be a Common Account Unit (UCC, Spanish abbreviation), as it was the Euro in its beginning with the ECU, and Sucre's value will depend on a currencies' basket.

Such basket will be comprised by the local currencies of the Alba countries (boliviano, Bolivia; Cuban peso, Cuba; east Caribbean dollar, Dominica; lempira, Honduras; cordoba, Nicaragua; and Bolivar, Venezuela) and Ecuador (with the Ecuadorian dollar), which will determine the value of the UCC.

The participation of each currency to form the basket will be based on the relative weight of each country's economy in the international field. Diverse variables have to be used to establish the relative weight of participation of local currencies in the basket. In addition, it will be necessary to establish the conversion between the Sucre and other currencies (such as the Euro or the Dollar).

The creation of the currency basket will allow, further, to keep progressing in the currency integration process, with a physical emission of a real regional currency, according to the technical group studying Sucre's creation.

To administer the Sucre is necessary just a Payment Compensation Chamber, where each member State will have an open account, that could be made in the Central Bank of the member countries or in the Bank of the Alba.

Sucre's immediate impact

This currency will allow the complementarity of the Alba and Ecuador economies; that is to say, “what other country needs and what I have, in the framework of a fair and beneficial trade for the peoples,” explained the Venezuelan economist Robert Bonillo. Consumers of the region will have access to new products.

As a consequence, the welfare of the peoples in the region will be improved, because a greater exchange capacity will generate more activity, more employment, investment and trade. “The idea of a Common Account Unit is to generate stability in the exchange mechanism to increase the inter-regional trade,” he said.

In a direct way, the countries of the region using this currency will have lower dependence on the dollar, which would protect them from any instability of such currency. The simple fact of implementing the Sucre would represent a progress towards the regional monetary and financial independence.

In addition, this new system of inter-regional payment would reduce currency exchange transactions and, therefore, the need of international reserves addressed for the international trade.

According to the technical commission, the dollar, often used for the multiple commercial and financial transactions within the region, would be out of the regional market.