print    send   Correct 

The "Summit for the Friendship and Integration of the Ibero-American Peoples" took place in Santiago, Chile, from 8 to 10 November, concurrently with the Summit of Ibero-American Heads of State and Government. Rede Brasil and Jubilee South/Americas organized a workshop on 8 November to discuss the implications of the creation of the Bank of the South and define strategies for advocacy.

Beyond the specific activity in relation to the Bank of the South, representatives of both organizations highlighted in different fora the importance of the founding of the Bank and the benefit of counting with the participation of civil society to guarantee that the new institution does not reproduce the model of the Multilateral Financial Institutions (MFIs).

Workshop participants included Fabrina Furtado (Rede Brasil/Jubileo Sur), Pablo Herrero (Jubileo Sur/Américas), Camille Chalmers (Papda Haiti/Jubileo Sur Américas), Adhemar Mineiro (Dieese/Rebrip), y Fátima Mello (Fase/Rebrip), among others.

At the start of the activity Fabrina Furtado, Ejecutive Secretary of Rede Brasil, put into context the founding of the Bank of the South and expressed her concern over the negotiations taking place. Furtado reminded participants of the importance of the creation of the Bank not only as a real alternative for sovereign and autonomous financial development, which would encourage support and complementarity among the countries of the South, overcoming the dependency of the region on the MFIs, but also as an instrument that may allow for the design of a new financial architecture.

Given that this proposal has not yet been created, it provides civil society with a unique opportunity to influence negotiations, especially with respect to the type of development the Bank will promote through its financing - as well as with respect to its operation and structure. The launching of the institution - which has already been postponed twice - has been set for the first week in December. It is therefore necessary to build strategies to affect the process before the statutes are closed 60 days after the launch. The problem so far is that access to information and participation has been practically non-existent, and has only taken place through the media or the government of Ecuador.

The ongoing negotiations cause concern in relation to the following points:

1) The official proposal includes the creation of a development bank, a bank with the functions of a central bank and a monetary system. However negotiations so far have only advanced with respect to the creation of a development bank.

2) The Bank's Function: ¿To finance infrastructure megaprojects mainly through the IIRSA, or food and energy sovereignty, generic drugs, research and development, local infrastructure, microfinances and new Environmentally Friendly Development Mechanisms (proposed by Ecuador) or even the promotion of human, economic, social, cultural and environmental rights, as demanded by civil society? For civil society's proposal to prosper, the Bank will need to have a different management and structure, built on the basic principles of transparency, participation and social control.

3) Volume of resources: we are in favour of it being proportional to the economies of the member countries, without affecting their power of decision, although this point has not yet been decided.

4) Power system: ¿One country - one vote, as held by civil society and especially Ecuador, or decision-making in proportion to the resources invested in the Bank following the model of the MFIs? The governments had decided that the power system would be egalitarian, but there is no consensus on this point. At the last encounter, Brazil and Argentina put forward the possibility that the governors (i.e., the countries) of the Bank should have the same power to vote, regardless of the resources invested, but the power of the executive directors (responsible for daily decisions) would be in proportion to the capital investment. This would give more power to countries like Brazil, Argentina and Venezuela, replicating the inequality of the MFIs. Another problem is that even if the countries decide on a "one country - one vote" system but demand, unfairly, the same share of capital from each country.

5) Management: Immunity for officials and private documents as in the MFIs? Or officials without immunity, public documents, participation of civil society through formal and informal mechanisms for the production, implementation, monitoring and evaluation of financial operations, and operation of the Bank and external auditing of financing as well as of the operation of the Bank? During the workshop, in response to the trade unions' defence of immunity for officials, Fabrina Furtado and Adhemar Mineiro explained that in the case of banks it is important that officials are responsible for the problems related to funding.

6) Capital sources. ¿International reserves, global rates and donations or the shares market and the IFIs? Civil society supports the first proposal since it allows countries to overcome the dependency on the markets, which in the case, say, of the MFIs, justifies the search for a return over any type of cost. Brazil appears to defend the market resources that provide the necessary "guarantees". All the governments propose that the MFIs should be allowed to invest in the Bank, but with no voting power. Civil society organizations do not believe that the Bank should accept investments from MFIs or donations from certain governments from the North, since even without the power of the vote, such a decision would normally grant them political influence.

7) Member states: Brazil is in favour of limiting the Bank to its South American members. The organizations, however, propose a Bank for Latin America and the Caribbean, and other countries from the South.

Bearing these points in mind, the organizations set themselves the task of producing a specific proposal, similar to the BNDES Platform. However one of the main problems is that the debate over the Bank of the South does not figure in the agenda of many of the movements and organizations of the region. Some participants argued that this was because of the lack of information, but also to the fact that "many movements believe that because it is Chávez's initiative, it is automatically good".

Another point that was mentioned is the difficulty that Brazilian organizations have in influencing the process effectively. On the way of more transparency and public debate brazilian CSOs are afraid of being used by their government - which does not appear to want the creation of the Bank - in order to stuck the negotiations.

Finally the organizations agreed to make public the debate on the Bank of the South, exchange information about the process and follow up the negotiations with a view to the Summit of MERCOSUR Presidents that will take place in Montevideo on 18 December 2007.

print    send   correct