The announcements of the inauguration of the first Latin American office of the planned Bank of the South and the adhesion of three new member countries have come as a direct challenge to the Northern based IFIs struggling to remain relevant to the region.
This page is under construction. Please check back periodically for updates on the Bank of the South.
Tambien disponible en espanol
The advances of the Bank of the South (Banco del Sur), closely aligned with discussions on regional energy policy and the larger project of building a Union of South American Nations, has also tested the South America rhetoric of integration proclaimed most recently at the Cochabamba Summit last December, 2007. This note provides a brief update and analysis of these recent announcements about Banco del Sur, focusing on the implications for the ongoing crises of relevance in Latin America confronting the IMF, World Bank and IDB, as well as the challenges for deeper South American integration.
Prospects for the future of the Bank of the South and South America
Brazil, Argentina and Venezuela reportedly have different objectives for any new regional Bank. Venezuela and others have suggested that Banco del Sur become the IMF of South America. Such an institution would presumably play a significant role in regional monetary policy and provide some form of balance of payments finance. Have less need for protection of its reserves, Brazil is reportedly more interested in steering Banco del Sur toward servicing the infrastructure investment needs of an expanded Mercosur. Argentina is hedging its alliances with both to ensure that neither gains the upper hand in regional politics. The smaller countries are most interested in an alternative, less bureaucratic or Washington biased source of development finance.
Despite the evident disagreements on the scope of these new South American institutions, there is a strong indication that these institutions are moving forward toward the construction of a Union of South American Nations (UNASUR). Not only are these new institutions, such as Banco del Sur, proposed as replacements for Northern dominated behemoths, they have created parallel spaces for the rethinking and negotiating alternative models for integration.