Bank of the South to rival IMF and World Bank
Venezuela's leftist government is leading Brazil, Argentina and other regional economies in creating a new bank with the ambition of casting off unwelcome oversight by the IMF and World Bank.
The idea was first announced by Venezuela's President Hugo Chavez last December as part of his crusade against US influence and international financial institutions that he says are merely "tools of Washington."
The finance and economy ministers of Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela met last week in Rio de Janeiro to outline the main elements of the "Banco del Sur" -- or Bank of the South.
The lender will provide "a new financial architecture" for development in the region, according to the seven backers, whose initiative comes just ahead of annual meetings of the IMF and World Bank this weekend.
"There will not be credit subjected to economic policies. There will not be credit that produces a calamity for our people and as a result, it will not be a tool of domination," said Venezuelan Finance Minister Rodrigo Cabeza.
Chavez speaks of liberating regional countries from the tutelage of the IMF, the World Bank and the Washington-based Inter-American Development Bank (IDB) which, he argues, impose economic policies that condemn millions to poverty.
Bolstered by robust economic growth, Latin American countries are displaying a new assertiveness toward the IMF now that several of them -- notably Brazil and Argentina -- have paid off their debts early.
The new bank enjoys backing from Brazilian President Lula Inacio Lula da Silva, who despite his leftist profile has overseen an economic policy marked by fiscal restraint and growing reserves since coming to power in 2003.
But South America's economic giant declined to give its agreement until clarifying that the bank's role would be limited to aiding investment in the region.
"Brazil shows less interest because it has the greatest credit capacity," said the country's finance minister, Guido Mantega.
However, "we continue to support the project because it will benefit our commercial partners and Brazilian businesses," he added.
The Bank of the South is supposed to finance public and private projects for development and regional integration. The official launch and the signing of a founding charter is set for November 3 in Caracas, which will host the bank's headquarters.
With seven billion dollars in capital, the Bank of the South will begin operating in 2008.
"The idea is to rely on a development agency for us, led by us," Cabeza said.
The seven founders hope to secure the membership of five other countries: Chile, Colombia, Peru, Guyana and Suriname.
Colombian President Alvaro Uribe said Friday on the margins of a summit with Chavez that his country wanted to join the Bank of the South, as long as it was "not a rejection of the World Bank and the International Monetary Fund but an expression of solidarity and brotherhood."
In 2006, the World Bank and the IDB allocated six billion dollars in credit for the region, according to Interamerican Dialogue, based in Washington.
Source: AFP
16.10.2007
http://english.pravda.ru/business/finance/16-10-2007/98884-bank_south-0
This is interesting for two reasons:
1. It is an appropriate reaction to the abuse of economic and political dominance exerted by the World Bank and the IMF in the past, often with devastating effect on the client developing countries. Try to compare the World Bank's last country report on Indonesia before the crisis broke in 1997 with the next following one. That will show you the international political corruption and naked aggression on that country.
Read also former chief economist of the World Bank, Nobel Prize laureate Joseph Stiglitz' books and articles and Paul Blustein's "The Chastening - Inside the Crisis that rocked the Global Financial System and humbled the IMF" which describes very clearly who are behind the decisions of the IMF.
2. The press coverage of the new Bank of the South: Try to Google it and you will find nothing!
Thank God for Pravda! I had never thought that it would come to the point when you will have to resort to Russian and Chinese media in order to find out what is going on in the world! Are they the only ones which are not owned or intimidated by the Zionists?
in the planning. And last week, when Ahmadinejad visited South America, it was announced in the Iranian press, that Iran has applied to become an observer.
So my guess is, that Iran is giving the South Americans some good advice from their own experience of non-interest based banking.
1)” In 2006, the World Bank and the IDB allocated six billion dollars in credit for the region, according to Interamerican Dialogue, based in Washington.”
Six billion dollars in credit means six billion dollars in DEBT, plus compound interest. The IMF and World Bank have unlimited cash, since they deal in credit. They do not dole out gold or anything like that. They offer bribes to key people in a country, which sparks greed, which causes problems. Fortunately the IMF and World Bank are there to help with those problems. They will “restructure your loans” if you sell them your national assets for pennies on the dollar. Then new debt is applied, and the cycle is repeated until the bankers and the multinational corporations have everything. This is what Chavez means when he says that any dealings with the IMF and World Bank lead to mass poverty.
More timid leaders, such as Colombian President Alvaro Uribe, want to enter into the Chavez sphere, but they are afraid of Bush and the bankers. Chavez knows he must be patient with them.
2) "Brazil shows less interest because it has the greatest credit capacity," said the country's finance minister, Guido Mantega.
Despite Venezuela’s vast oil wealth, almost two thirds of South America’s entire economy is in Brazil. Thus, Brazil can take on more debt – i.e., it has more “credit capacity.” Thus, Brazil straddles the fence. Argentina leans more toward Chavez, but it too walks a cautious line, since Argentina is largely controlled by Jews. Chile is largely controlled by huge agricultural interests (many of which are Jewish).
Thus, it’s going to take some time to weed out the IMF / World Bank toxins.
To me the most exciting thing is Chavez’ proposed changes to Venezuela’s constitution in which Venezuela’s state bank will be nationalized, and private monopolies outlawed. This will be a major step forward if it passes.
3) But South America's economic giant declined to give its agreement until clarifying that the bank's role would be limited to aiding investment in the region.
In other words, Brazil will work with Chavez if Chavez works with the IMF and World Bank. Chavez refuses to do this. Once again, he knows he can’t undo centuries of tyranny and corruption overnight. Brazil will let Chavez be involved in peripheral investments, but that's all. The IMF and World Bank have their claws sunk too deeply in Brazil's huge economy.
Bottom line: South America has a way to go before it is truly free of the international bankers. Still, this is good news.
ERLENDA: you said Iran has interest free banking. Have you seen anything about that on the Internet? Can you provide any links? I would be most interested.
quote:
Bottom line: South America has a way to go before it is truly free of the international bankers. Still, this is good news.
>>>>>>> It's good news. Many small things add up to something huge...