Building An Alternative The South Bank and New Regional Financial Architecture

A New Financial System South Bank Regional Stabilization Fund Regional monetary system –Other initiatives: Withdrawal from ICSID Debt Audit Other initiatives - ALBA Bank, Petrocaribe

Why another development bank? Possibility to finally achieve political independence and financial autonomy from IFIs and North; Recover sovereignty (state and peoples); Stop transfer of resources from South to North; Change balance of power; Promote integration based on solidarity, complementarity and to overcome asymmetries.

What is at stake? Transparency and civil society participation; What development to be financed; Volume of resources; Decision-making structure; Management; Sources of capital; Member countries.

What is at stake? Finance mega infrastructure and agrofuels? Same volume of capital or more capital more power? One dollar- one vote? Immunity for bank officials and private docs.; Bonds; IFIs; other banks and governments. Food and energy sovereignty, local infra- structure…; Capital according to size of economy; One country - one vote; No immunity, public docs., external audits…; International reserves, global taxes and donations.

The South Bank today Lauched Dec. 9th 2007; Offices in Venezuela, Argentina & Bolivia; Capital: –Authorized capital: US$ 20 billion –Subscribed capital: US$ 7 billion (now US$ 10 billion); –Capital allocated on a basis of three groups of countries, considering their GDP: US$ 2 billion Brazil, Argentina & Venezuela; US$ 400 million Ecuador & Uruguay (10) & US$ 100 million Paraguay & Bolivia; A minimum of 20% paid-up share (10% of which can be in local currencies) in five and ten years.

Decision-Making Structure “South-American integration should constitute for the people of the region, a space consecrated for the promotion of economic and social development, the reduction of assymmetries, poverty and social exclusion, towards the convergence and complementarity of the economic integration processes” and that the “organs that direct the South Bank will have an equal representation of each of the member South-American countries, based on a democratic operational system”.

Challenges: Continue struggling against IFIs; Ownership over Southern initiatives: –Participate during all decision-making processes; –Avoid substituting Northern capitalists with Southern capitalists that respond to the same Northern interests; –Overcome sub-imperialism (instrument of North) and reproduction of model and IFIs policies (ie: BNDES and mega infra-structure projects where environment and peoples are considered obstacles); –Better define what we mean by a new financial system; –Better define how we want to participate. Reflect on non-capitalist initiatives considering that debt and profits are at the heart of the system.