When Latin America’s leaders gathered around to sign the founding charter of Banco del Sur in December 2007, the new bank’s Western-steered counterparts offered little in response besides a handful of tight smiles and polite remarks. IMF Director General Dominique Strauss-Kahn assured the public that the fund perceived Banco del Sur, or Bank of the South, as “not a problem; it’s maybe an opportunity.” Augusto de la Torre, the World Bank’s chief economist for Latin America reacted in the same tepid fashion. “As far as the World Bank is concerned,” he said, “this new initiative is not perceived as a competitor.”
The truth, however, is that Banco del Sur’s blazing entrance into a field that has been dominated for years by a neoliberal-economic paradigm, is worrying some key players in the game. In fact, an anonymous insider at the Inter-American Development Bank has disclosed that the new Bank of the South was looming large as a new and stubborn threat to institution. “With the money of Venezuela and political will of Argentina and Brazil, this is a bank that could have lots of money and a different political approach,” he explained. “No one will say this publicly, but we don?t like it.”
The West has every reason to feel unsettled. Although the World Bank and the IMF have long been in control of developing countries’ credit lines and development funding, many smaller countries – notably those belonging to the Latin American region – found that the neoliberalist policies of both institutions succeeded only in crippling their own nascent economies. In response to this, Argentina, Bolivia, Brazil, Ecuador, Paraguay, Venezuela, and Uruguay decided that enough was enough. What Latin America needed was a lending institution run by their own leaders, without the dominating hand of a single, rich nation. Most importantly, this bank will have all the liberty to implement new development schemes that respond perfectly to the needs of Latin America’s poorest.
The result of that is the creation of Banco del Sur, Latin America’s most fiery cry for independence from the tethers of Western neoliberalist policy. And while the bank has indeed been criticized by doubting Thomases who are predicting its downfall, one cannot help but notice Brazilian President Lula de Silva’s triumphant message during Banco del Sur’s inauguration. “Developing nations must create their own mechanisms of finance instead of suffering under those of the IMF and the World Bank, which are institutions of rich nations,” he proclaimed. “It is time to wake up.”
Source: Latin America Banks on Independence (In These Times)