Bank of the South: Some concerns
As
usual, everyone plays his own game
By Eduardo Dimas Read Spanish Version
I think
that any president who five years ago had attempted to create a
totally Latin American bank would have been called mad. However, on
Oct. 8 — perhaps to commemorate the 40th anniversary of the murder
of Che — the creation of the Bank of the South was agreed upon in
Caracas.
This
bank, which is expected to have an initial capital of $7 billion,
will allow its members (Argentina, Brazil, Bolivia, Ecuador,
Paraguay, Uruguay and Venezuela) to enjoy a relative financial
independence, because they will be able to obtain "soft"
loans for emergency situations or the development of social-service
works.
They
will also be able to free themselves from the neoliberal measures
imposed upon them by the International Monetary Fund, the World Bank,
and the Inter-American Development Bank. That’s nothing to scoff at,
if we consider the nefarious history of those financial institutions
throughout the Third World.
The bank
will have its main office in Caracas. It will begin operations on
Nov. 3, when the presidents of the member countries sign its birth
certificate. If it is finally agreed upon that each country will
contribute 10 percent of its cash reserves, we shall see a new form
of relationship between the states, a relationship that takes into
account the economic asymmetries and the real possibilities of each
country.
Of
course, there remain many questions about the operation of the Bank
of the South, particularly about how interested each government is in
being a participant. On Oct. 12, President Alvaro Uribe of Colombia
asked to join the new entity, as part of his "country’s
incorporation into Latin American integration."
Needless
to say, Uribe is one of the main allies of the United States in the
region. At this moment, his administration, along with Peru and
Panama, is pressing for U.S. Senate approval of a Free Trade
Agreement (FTA.)
I find
it hard to believe that Uribe is truly interested in Latin American
integration, because in practice he does exactly the opposite. The
same, though differently, occurs with other presidents, whose
policies are aligned with the United States, such as the presidents
of Uruguay and Brazil.
The
government of Tabaré Vázquez recently signed an FTA
(under another name) with the United States, while the government of
Brazil has become the principal promoter of the production of
ethanol, one of the priorities of President George W. Bush and
family. The effects of the production of this bio-fuel can already be
felt in the rising prices of the basic foods.
In the
case of Brazil, it is fair to point out that Lula has declined to
sign an FTA with the United States, and has been one of the principal
adversaries — along with India, South Africa and other countries —
of an agreement on agricultural products in the so-called Doha Round
of the World Trade Organization (WTO.) One pinch of salt, another of
sugar.
It is
evident that, without the participation of Brazil, the principal
economy in the region, the Bank of the South would not be a strong
entity. Perhaps for that reason, Brazil delayed joining. Even today,
we don’t know exactly what its position will be in the bank or what
conditions it will place upon its operation.
We
mustn’t forget that the Brazilian oligarchy aspires to lead the
region. That desire is supported by the United States, as a way to
provoke divisions within the process of integration.
The
government of Argentina was among the first to support the creation
of the bank, after President Hugo Chávez of Venezuela made the
proposal more than two years ago. President Néstor Kirchner
has also refused to sing an FTA with the United States. Argentina
still remembers the economic crisis caused by the application of the
neoliberal model, which it experienced a few years ago.
Argentina
would be one of the major beneficiaries of this bank, because — in
punishment for Kirchner’s decision to suspend payment of an important
portion of Argentina’s foreign debt and to break away from the IMF —
the country receives no credit from any international financial
institution.
Some
observers of the Argentine reality point out that the government’s
objective is to obtain soft loans not for social-service works but to
improve the credit conditions of the country’s entrepreneurial
sectors. In any case, Argentina — South America’s second-largest
economy — is taking a positive step on the road to economic
integration.
Kirchner,
Chávez and Bolivian President Evo Morales were the first
national leaders to sign an accord for the creation of the Bank of
the South. In the case of Chávez and Morales, the objectives
were quite clear: to achieve South America’s financial independence,
and to gain resources for the execution of works of social benefit,
such as hospitals and schools, and agricultural and industrial
development.
Later
on, Ecuador would join the bank. Ecuadorean President Rafael Correa,
an anti-neoliberal economist who advocates profound changes in social
justice, proposed the creation of a common currency for South
America, as a way to shun the dollar. That new currency will not come
into effect for a while, but it would be an important complement to
integration.
As
regards another Bank of the South member, Paraguay, one of the
poorest participants, it is evident that its incorporation answers to
internal needs that cannot be postponed. Paraguay is undergoing an
electoral process that is hard to forecast, and it is possible that a
progressive government will come to power. If so, the bank and the
process of integration will be strengthened.
It is
obvious to think that national interests rank foremost among the
members of the Bank of the South, that is, among the dominant classes
in each country. The result is that each country has a different
outlook regarding the objectives and the perspectives of the bank.
The stance of Venezuela, Bolivia, Ecuador and (to a lesser extent)
Argentina is not the same as that of Brazil, Uruguay and Paraguay.
Not to mention Colombia, given its strategic alliance with the United
States.
Not
everything will be rose-colored in the Bank of the South. We can
predict conflicts and contradictions among its members. But it is one
more element of regional integration, along with the nationalization
of the natural resources in some countries, the creation of
infrastructures like the Gas Pipeline of the South, highways and
railways that will unite the economies of the Latin American
countries.
The Bank
of the South is not part of the true integration represented by the
Bolivarian Alternative for the Americas (ALBA), whose extraordinary
work in health and education has already benefited millions of Latin
Americans. But it is part of a process of change, apparently
irreversible, that leads to economic (and maybe political) unity of
the countries in the region. Let us, then, welcome it. May it have a
long and fruitful life.
