Chavez launches his "Bank of the South"
Today Venezuela’s Hugo Chavez launched his regional Banco del Sur (“Bank of the South”) to counter the pernicious effects of global banksters.
The bank links six nations in South America. Each will contribute startup capital expected to total between $5 billion and $7 billion.
Banco del Sur’s interest rates will be similar to those of other international lenders, but it will offer loans to Latin American countries with fewer strings than loans given by the World Bank, or the IMF or the Inter-American Development Bank.
Banco del Sur will be headquartered in Caracas, with branches in Argentina and Bolivia. Finance ministers of Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela will sit on the bank’s board.
Today Chavez and the other leaders signed the “founding act” at a ceremony at Argentina’s presidential palace hosted by President Nestor Kirchner, plus Kirchner’s wife, president-elect Cristina Fernandez (who takes office Monday).
“This is a historical moment,” said Bolivian President Evo Morales, whose country is South America's poorest. Morales praised the bank as a new tool to fight poverty and ease inequalities.
Brazilian President Luiz Inacio Lula da Silva said, “This will be the first international bank truly controlled by the nations of our continent.”
Banco del Sur is one of several proposals under Chavez’s plan to unite Latin American countries in a “confederation of republics.” Chavez' vision also includes trade alliances (e.g. Mercosur), plus a transcontinental natural gas pipeline.
Critics say it the whole thing is a symbolic project that Chavez will use to spread his oil-financed influence.
Others disagree. They call it a bold stroke for Latin America’s financial independence. “In the 190s there was a collapse of a very powerful cartel headed by the IMF,” said Mark Weisbrot of the Washington-based Center for Economic and Policy Research. “This is the first step in creating an alternative.”
Banco del Sur will dispense loans to build roads and railways, ease poverty, and improve infrastructure.
Argentina's economic success is owed to Venezuelan aid, which allowed Argentina to break out of the IMF prison.
There is no attack in Venezuela against capitalism as such, but there is an effort to develop human capital, instead of merely acquiring money.
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In other news, Venezuela’s National Electoral Council has opened 54 percent of the ballot boxes containing the physical votes of the Referendum. Venezuelan voters mark their choice on a touch-screen machine, which then records the vote and prints out a paper receipt for the voter. The voter then deposits the vote in a ballot box.
Nearly 100,000 witnesses (pro Chavez and anti-Chavez) are participating in the process. The mechanisms of guarantee are above international standards. No one is charging “fraud.”
Venezuela will also build more voting centers to make voting easier, with new designs.
The National Electoral Council (CNE) allowed 3,000 national and international journalists to cover the referendum on Sunday 2 Dec. Special observers also came from 39 countries.
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Bush denounced the referendum as a “sham” before it took place. Afterward, Bush said it proved the “democracy works.” (This is probably the first time a “dictator” lost an election.)
Pro-Chavez leaders are analyzing what went wrong. Most think there was doubt and confusion among the population, due to a failure of the Chavez campaign to explain the reform, and to fight media manipulation.
The reforms were not defeated by the opposition, but by the failure to mobilize enough pro-Chavez voters. There are 6 million people registered in the pro-Chavez PSUV party, but 2 million did not vote. Only 115,000 anti-Chavez people were enough to defeat the referendum.
Rather than go after the forces that defeated the referendum, pro-Chavez leaders are analyzing their own side.
Chávez’s government still remains in power with close to a 60% approval rating. Opposition groups still have minority support, and little political power.
Most Venezuelan cities are divided into pro-Chavez and anti-Chavez zones. The anti-Chavez zones are affluent, with shiny mega-malls, tree-lined boulevards, and gated villas. The pro-Chavez zones tend to be informally planned barrios with self-built homes and unfinished streets filled with trash, pollution, and violence.
Mainstream journalists live, work, and play in the rich (anti-Chavez) areas. Their social world is dominated by the opposition.
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Bush will not let up on Chavez. During the Riyadh summit, Chavez proposed that OPEC stop trading in dollars. This triggered alarm bells in Washington.
Chavez also called for a democratization of the Development and Cooperation Fund (worth US $40bn). Until now, Arabia has always managed the fund, and always put it in the hands of US and European businesses. Chavez won that battle. Now US and European firms are not the only ones who manage that fund. OPEC countries themselves (plus other non-Western bloc companies from outside OPEC) control it.
This will allow OPEC to focus on problems affecting OPEC countries, such as how to avoid desertification in the sources of the Niger river. Because of moves like this, Venezuela has been accepted as an observer country to the Organization of African Unity.
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Chavez has also set up organizations such as Petrocaribe, which promotes barter between 16 Caribbean and South American nations. Without Petrocaribe, the 16 member countries - impoverished, lacking infrastructure, and dependent on foreign aid - would face a dead-end, with astronomical prices for oil and food. The extent of the savings on these countries' oil bills is already around US$450 million since they freed themselves from oil market intermediaries and speculators.
With barter (oil for Cuban doctors, oil for Argentine meat and ships, oil for Uruguayan milk and cheese etc.), Venezuela breaks World Trade Organization norms, and gives weaker countries a bigger role in selling their produce and raw materials.
By contrast, under Bush-style "free market" rules, poor countries and the producers of raw materials are at the mercy of price fluctuations based not so much on demand, as on the will of monster corporations.
