Latin American governments and civil society organisations that are critical of current neoliberal policies are pushing for the establishment of the “Bank of the South.” The Bank is hoped to provide an alternative institutional, economic, and political model to the current multilateral financial institutions which have negatively affected countries in the region.

Six Latin American countries—Argentina, Bolivia, Brazil, Ecuador, Paraguay and Venezuela—together with regional and international civil society organisations and movements are now pushing for an alternative to current neoliberal policies imposed by financial institutions such as the World Bank and International Monetary Fund.

Dubbed as the “Bank of the South,” this alternative bank is envisioned to change power relations within multilateral development banking. It is hoped to fulfil its goal of offering alternative sources for financing development in the region.

According to a report of Rede Brasil, a network of non-profit civil society organisations working on monitoring and intervening in issues related to international financial institutions, “In the past few decades, the World Bank, International Monetary Fund, and Inter-American Development Bank (IDB) have been dictating “rules of good behaviour” to Southern governments, thus violating the sovereignty and right to self-determination of nations. Indeed, such rules have been responsible for a significant economic, cultural, environmental, and social destruction in those countries.”

Civil society, however, cautions that the Bank should be careful of not reproducing the institutional, economic or political model of current multilateral financial institutions. Instead, the Bank should act as protector of Southern countries against the negative impacts of the economic and political globalisation by supporting autonomous development at regional and national levels.

“It is necessary to generate an alternative regional financial system that is consistent with the need to give absolute priority to the overcoming of the poverty, marginality, and structural underdevelopment caused by the huge public and social costs of the financial disasters, the policies of deregulation and privatisation promoted and conditioned by the lending institutions, and the growth of a gigantic illegitimate debt,” said the civil society organisations in their open letter to the Presidents of Argentina, Bolivia, Brazil, Ecuador, Paraguay, and Venezuela.

In an open letter, Jubilee South and the Committee for the Abolition of Third World Debt (CADTM), among other signatories, reiterated the demand to put in place necessary information, participation, and consultation with organisations in societies which will be affected by the creation of the Bank of the South.

From its inception at a meeting between Venezuelan President Hugo Chavez and Argentine President Nestor Kirchner on February 21, 2007, the Bank of the South has taken shape in a series of regional meetings held since then. Representatives from Argentina, Bolivia, Brazil, Ecuador, Paraguay and Venezuela are expected to sign the Bank’s charter on June 26, 2007 in Caracas, Venezuela at the opening of the Copa America football tournament.

Sources:
“Open letter to the Presidents of Argentina, Bolivia, Brazil, Ecuador, Paraguay, and Venezuela on the Bank of the South” from Choike.org, posted on June 20, 2007, <http://www.choike.org/nuevo_eng/ifis/informes/639.html>.
“Southern Bank: A road towards a new financial architecture” from Choike.org,  <http://www.choike.org/nuevo_eng/informes/5631.html>.
“Southern Bank: An alternative for development finance?” from Choike.org, posted on May 15, 2007, <http://ifis.choike.org/informes/600.html>.
“The Southern Bank on the final stretch” from Choike.org, posted on June 14, 2007, <http://ifis.choike.org/informes/636.html>.