Bank of the South

Those of you who do not live under rocks know that several South American countries are coming together to start their own lending organization called Banco del Sur, or Bank of the South. This is an organization that will lend money to South American countries for constructing social programs and infrastructure. It will take the place of the World Bank and the IMF, whose heavy hands only worsened the economies of these countries.

How this works is each of these countries will put equal shares of money into the organization and, in return, they can borrow this money for relevant projects. Each country will contribute $7 billion so that no country has a higher share in the organization than the others.

Venezuelan President Hugo Chávez is encouraging all members of Bank of the South to withdraw membership from the IMF. This is partially to promote use of the new organization as well as a protest against the failing policies of the IMF.

It was launched December 2007 with these founding members: Venezuela, Brazil, Bolivia, Argentina, Ecuador, Paraguay, and Uruguay, with Columbia joining soon after it started. Lending is not limited to these countries, however; all South American countries can lend money from the organization.

I personally am happy that the countries were able to get together to plan such an organization. With failures such as the Cochabamba Water Wars of 2000, “outside banks” have continuously walked over these countries for years. The Bank of the South will, hopefully, have a far clearer picture as to what these countries need, as well as give them the autonomy they sorely need. Foreign governments have no place telling these countries what to do.

Sources:

“Cochabamba Protests of 2000.” http://en.wikipedia.org/wiki/Cochabamba_protests_of_2000

“Bank of the South.” http://en.wikipedia.org/wiki/Bank_of_the_south

“Chomsky: Poorer Countries Find a Way to Escape U.S. Dominance.” http://www.alternet.org/audits/76657/