Bank of the South CP - Northwestern 2013 6WeekSeniors

8/11/2019 Bank of the South CP - Northwestern 2013 6WeekSeniors

1/41


2/41

NDI 20136WSBank of the South

Counterplan


3/41

***Bank of the South CP***


4/41

1NC Shell Reform

The Banco del Sur authority should fund __________________ and

pass and comply with reforms that:

-divides the bank into a regional development and central bank-passes a credit policy directed toward the strengthening of publicly owned companies

Current lack of consensus prevents bank success- reforms and inclusion of national bank

efforts would solve

(Marshall 11 - B S N w Lkg I J P 2011)

These objectives cover a wide gamut of institutional responsibility. Given the fact that there is still no consensus on the

basic structure of the bank in its mature form, there is also no agreement regarding whether the banks shouldattend to all the mentioned objectives. If Banco del Sur is only to operate as a regional development bank, only objectives 5 and 6can be given full attention. However, if the bank functions as two entities, one resembling a central bank and the other resembling a

development bank, Banco del Sur couldfulfill all the objectives listed in Table 1.In Marshall and Rochon (2010), we expand

on the framework established in the Quito Declaration (CADTM 2008) and propose a bank that would be divided between a

regional development bank and a regional central bank, which would issue a regional currency. Under this

scheme, each member country would retain all the functions of its national central bank and

would continue to use its national currencyin domestic transactions. Yet under a regime of capital controls,national currencies would not be convertible with any currency except for the regional currency, which would in turn be fully

convertible with all other currencies. As such, the central banking role of Banco del Sur would be to act as a

clearinghouse between member countries at the regional level, converting all domestic

currencies into the regional currency for international transactions. Simultaneously, its relations with therest of the world would not differ tremendously from a typical modern central bank, managing the price of the regional currency inrelation to currencies outside the region. Banco del Sur would therefore operate under a similar scheme as that proposed by Keynesat Bretton Woods, favoring regional equilibrium while acting as a financial buffer between the region and the rest of the world.

This monetary framework would aid in narrowing regional imbalances and reducing capital

flight. It wouldalso provide the necessary framework for member countries to create and channel domestic credit, although

this task would primar- ily be the responsibility of national banks, as will be argued throughout the rest of the paper.Such a

proposalvaries from other schemes, which do not mention possible downstream linkages with

already existing publicly owned banks. Whether Banco del Sur operates as one entity or two, it is always envisionedas an institution completely independent and apart from the entities that govern the banking systems of its member countries. As

will be argued, this vision excludes the relevant supports that national banks, in particular publicly owned

ones, could offer to the regional bankin the future and omits the role that these types of banks have played in the past,

effectively achieving many of the objectives proposed for Banco del Sur in diverse times and

places.


5/41

BOS CPNeolib Net BenefitCP solves

Counterplan solves neoliberalism--

The Bank of the South is a critical turning point for mobilizing more effective activism againstneoliberalism

(Hart-Landsberg 09, Martin Hart-Lbg P Lw k g Lg LB Bk S: g Pb Rw 2009 V 61 I 04)

The current period is marked by three overlapping developments: the failure of neoliberalism, the crisis of the East Asian export-led

growth model, and South American efforts to advance an alternative regional development strategy. The

combination has created a political environment offering important opportunities for those committed to the international struggle to supplant capitalism. The failure of

neoliberalism to deliver its promised growth has led to the creation of anti-neoliberal political

movementsthroughout Latin America and Sub-Saharan Africa. Although a welcome development, their emancipatory potential has remained

limited, in part, because many activists and intellectuals continue to draw a sharp distinction

between neoliberalism and capitalism: while they strongly oppose the former, they remain

unwilling to reject the latter.Most tend to blame the development failures of their respective nations on government policies that liberalized, deregulated, and privatizedeconomic activity. Many believe that the East Asian experience demonstrates that active state direction of economic activity can produce successful capitalist development. Therefore, they have often directed

their efforts at enhancing the capacities of their respective states in an attempt to recreate East Asian economic successes.However, we are now at a point where it

may be possible to win a majority of these activists and intellectuals to an anti-capitalist

perspective, a critical change if we are to build the movement clarity and strength needed to advance a socialist alternative. One reason is that the

exploitative nature of East Asian growthis becoming clearer. Another is that the regions export-led growth

strategy has finally run up against its own limits as an ever-deepening global economic crisis, triggered by imbalances in the U.S. economy, has thrownthese economies into their own downward economic spiral.P w b g ( b -market and state-directed forms) has weakened,

the governments of a number of South American countries are working to advance new regional initiatives that have the potential to promote

and strengthen socialist-inspired development alternativesthe most significantare the Bolivarian Alternative for the Americas (ALBA) and the

Bank of the South. Although these two initiatives do not have the explicit mission of promoting socialist transformation, they are important because they concretize the existence ofalternatives to capitalist growth strategies and, in the case of ALBA, offer support to governments that are themselves pursuing a socialist-inspired process of transformation.

The Bank of the South solvessends a global signal about the sustainability of neoliberalismby redefiningthe role of emerging markets

(Paez 11, Pedro Paez, Plenipotentiary Ambassador for the Ecuadorian Government on the New International FinancialArchitecture and Chair of the Ecuadorian Presidential Technical Commission for the design of Banco S F gbeyond the crisiscreating an innovative Ob 2011http://www.tni.org/sites/www.tni.org/files/PedroPaezInterview-en-final.pdf)The second vector is related to the transformationof the relationship between the financial and the productive spheres in order to

recover the coherence betweenproduction and consumption, which has currently broken down due to the

exacerbated fragmentation caused by the evolutionary process of globalization and the parasitic hypertrophy of

financial capital. The development of thecapitalist system in recent decades has demonstrated that the financial sector hashijacked the process of accumulation, separating it from the productive process through financial instruments and innovation,

which ratherthan facilitating and empowering the development of productive forces, create mechanisms to

undermine the value generated in the real economy under the umbrella of profit and the

exploitation of society as a whole.Under this horizon, a fundamental aspect is to open space in an

economy based on a rationale that is different from the capitalist one and which is currently beingassimilated into this logic by the forces and conditions of the market. The structural crisis of capitalism as a way of production and

life, can onlybe overcome from a logic that puts the life of the people first, which is to say human labour, and which recognizesanother type of productive logic, another type of distribution mechanisms and a structure of incentives that give rise to processeswhich, while they are not dominant under the current logic of the market and capitalist profitability, can gradually stabilize and

moreover can be replicated and are sustainable in time.Finally, the third fundamental vector of the New International

Financial Architecture, which is based on the previous two, is related to the renegotiation of the role of emerging


6/41

economies as a peripheryin the international division of labour. This is built on afoundation of a new articulation between the

private capitalist economy, the role of the State and the grassroots economy in all of its diversity. On the other hand, a new

relationship between production and finances could redefine the role of emerging economies

as a periphery in the international division of labourthat is now outdated. In fact, one of the clearestexpressions of the structural crisis we are currently facing is related to global macroeconomic imbalances. The logic of growth based

on the growing debt of central countries, accompanied by the creation of a semi-periphery that produces

manufactured goods and a periphery that is increasingly relegated to providing raw materials. This is absolutely

unsustainable, not only in environmental and social terms but also from the local of capital

itself.


7/41


8/41

BOS CPSolvencyEconomyOnly the CP solves the economy sustainably by avoiding neoliberalism

Solves debt dependency

(Lendman 07,Stephen Lendman, Research Associate of the Centre for Research on Globalization, The Bank of the South: AnAlternative to IMF and World Bank Dominance, Centre for Research on Globalization,http://www.globalresearch.ca/the-bank-of-the-south-an-alternative-to-imf-and-world-bank-dominance/7207,29 October 2007)

Venezuelan finance minister Rodrigo Cabeza explained the bank will help develop the region by offering South

Americans more credits I bg b w bk

Italso aims to increase liquidity and revive socioeconomic

development and infrastructure investments in participating countriesand keep them outside therestrictive control of the IMF and World Bank that are fast losing influence and being phased out of the region.In 2005, 80% ofIF $81 b w L T 1% w $17 b g Tk

Pakistan. The World Bank is also being rejected. Venezuela had already paid off its IMF and World Bank debt ahead of schedule

when Hugo Chavez symbolically anno 30: We will no longer have to go to Washington nor to

the IMF nor to the World Bank R wg H IFdebt, suspended World Bank loans, accused the WB of trying to extort money from him when he was economy and finance minister 2005 Bk g x he face.

The Banco del Sur will replace these repressive institutions with $7 billion in startup capital when it begins operating in 2008. It will

be under a new financial architecture for regional investment with the finance ministers of

each member nation sitting on the banks administrative council with equal authority over its

operations as things now stand. Venezuelan Finance Minister Rodrigo Cabeza stressed the banks Latin roots saying:T g b b g gation

proj H : 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 like the international

lending agencies.Hg z b g IF Bk I-AmericanDevelopment Bank (IBD) control that condemn millions to poverty through their lending practices. Helped by windfall oil profits, his

government is already doing it with an unprecendented commitment to provide financial aid and below-market priced oil to regional S $9 b k g-controlled kind, it comes at

low cost and with good will, a cooperative spirit and few if any strings.Nb J Sgz gz z

B S Ob 10 H One of the advantages ofhaving a Bank of the South is that it would reflect the perspectives of those in the South (while in IF Bk ) (g) Stiglitz met with Hugo Chavez on his visitand praised his redistributive social policies. He also crz g b x g () g q g g get as

b t the expense of the region and its people.Venezuelas acting

ambassadorto the Permanent Mission to the UN, Aura Mahuampi Rodriguez de Ortiz, warned the world body

about Latin American debtduring her participation in the General Debate on Macroeconomic Policies in October. She

: The persistence of the foreign debt of the developing countries affects negatively on

its process of development. It is not worthy to direct resources for the development of poor

countries if such resources end up directed to the payment of the foreign debt gg

economic development internally. She also spoke of the new Bank of the South, how it will help strengthen

regional integration and also fairly distribute investments and finance projects to reduce

poverty and social exclusion.A less publicized Bank of ALBA (Bolivarian Alternative for the Americas) will also beging b w g w g ncialreso Venezuela, Cuba, Bolivia and Nicaragua.Chavez first proposed ALBA as an alternative to theFree Trade of the Americas (FTAA) in 2001 with Venezuela, Cuba and Bolivia its original members in December, 2004. Nicaragua thenjoined the alliance in January, 2007 under its newly elected president, Daniel Ortega, who signed on as his first act in offi LBg b I g g I

boldly based on member states complementarity, not competition; solidarity, not domination; cooperation, not exploitation; and g g g b g rate giants.In April, the5th ALBA summit was held in Caracas to discuss ways to improve the alliance. Initiatives covered included a Permanent(coordinating) Secretariat and a plan to create 12 public companies to be co-managed by ALBA member states. Its goal is to
http://www.globalresearch.ca/the-bank-of-the-south-an-alternative-to-imf-and-world-bank-dominance/7207http://www.globalresearch.ca/the-bank-of-the-south-an-alternative-to-imf-and-world-bank-dominance/7207http://www.globalresearch.ca/the-bank-of-the-south-an-alternative-to-imf-and-world-bank-dominance/7207http://www.globalresearch.ca/the-bank-of-the-south-an-alternative-to-imf-and-world-bank-dominance/7207


9/41

strengthen key economic sectors in areas of energy, agriculture, telecommunications, infrastructure, industrial supplies and cementproduction. ALBA country foreign ministers then agreed in June to create a development Bank of ALBA to help finance these

ventures with low-cost credit. It will complement the Banco del Sur and also be headquartered in Caracas.Uncertain Future

ProspectsSocially responsible regional banks, like those discussed above, will challenge the dominant

institutions of finance capital if they fulfill their promise. But therein lies the problem. These new institutions g x w g I utonomy w g g g w g g wg z b

industries, an end to one-way WTO-style trade deals, socially redistributing national resources, developing local economies,achieving land and housing reform plus a sweeping commitment to social equity and a resolve to end a 25 year neoliberalg F 1960 1980 g gw w 82% F 1980 2000 w w 9% 2000 to 2005 only 4%. For the region, it meant sweeping poverty, inequality and the most extreme disparity between the super-richand desperate poor in the world.Change is needed, and Venezuela under Hugo Chavez has done most in the region to achieve it.

Finance Minister Rodrigo Cabezas just g 2008 bg N b 46% social spending. It devotes special attention to health and education but also to subsidized and free food, land reform, housing,micro credit, job training, coope z people. Since he took office, social spending per person is up more than threefold and in 2006 was 20.9% of GDP.Chavez now hasan ally in Ecuador under Raphael w g H w bdrafted in the next six months and then put to a national referendum next year. Other Bank of the South founding countries likeBrazil, Argentina and Bolivia, however, claim to be center-left but, in fact, embrace 1990s neoliberalism, and financial autonomy

w g The Bank of the South will only work if it fulfills a mandate to prioritize local

needs and development, not corporate ones T g w b w member, Brazil under Lula, closely tied to Washington and in its grip.Nonetheless, small signs of change are emerging, the Bank of

the South may be one of them, and a new generation of leftist bk g wkg (b g) g T every step forward means more power to the people and

another possible world.

The CP is the key partof economic integration

(Ogloblina 09last cited reference from 2009, Elizaveta V. Ogloblina, assistant professor of International Banking and Financeat the Finance University of the Government of the Russian Federation Rg F: L

International Banking and Finance Department Finance University under the Government of the Russian Federation,http://www.culturaldiplomacy.org/academy/content/pdf/participant-papers/2011/april/biec-roa-nua/1regional_monetary_fund-_the_case_for_latin_america-_elizaveta_v._ogloblina.pdf)

Finally we have arrived to the following conclusion. One of the main tasks of the Bank of the South consists in

development of effective mechanisms in overcoming the crises and its negative consequences. Otherwise

the countries would undertake uncoordinated measures, which will cause damage to the regional interests.

A survey of thenew regional financial architecture leads to the conclusion that presently the Bank of the

South is the main pillar of the integration processes in the South American region. The establishment

of this financial institution is the prerequisite in emerging the common economic space. Theaspiration of the Bank is to direct the economic activity toward the real sector, to develop industrial capacities and transportinfrastructure, that will allow to co-ordinate the economic growth with the social development.Indeed, the success in therealization of this project depends on the political will that would be embodied in the actions and accelerate the beginning of the

Bank of the South.

The presence of a large public bank in emerging markets solves allpossible scenarios for

economic decline

(Marshall 11 - B S N w Lkg Irnational Journal of Political Economy, 2011)

South America finds itself in an enviable and unique ly increase productive investment andpromote internal savings,and by doing so slowing capital flight, a credit policy directed toward the

strengthening of publicly owned companiesand small and medium enterprises (SMEs) is essential. These twotypes of company have several characteristics in common. On the one hand, both tend to operate exclusively in domestic markets.

As such, their survival depends on local conditions, and without interests in other countries,

there is little incentive to overlook local developmentin favor of channeling resources to other countries.

Beyond their incentives, the mere ability to export capital is much more limitedin these types of companies. Unlike the MNC,
http://www.culturaldiplomacy.org/academy/content/pdf/participant-papers/2011/april/biec-roa-nua/1regional_monetary_fund-_the_case_for_latin_america-_elizaveta_v._ogloblina.pdfhttp://www.culturaldiplomacy.org/academy/content/pdf/participant-papers/2011/april/biec-roa-nua/1regional_monetary_fund-_the_case_for_latin_america-_elizaveta_v._ogloblina.pdfhttp://www.culturaldiplomacy.org/academy/content/pdf/participant-papers/2011/april/biec-roa-nua/1regional_monetary_fund-_the_case_for_latin_america-_elizaveta_v._ogloblina.pdfhttp://www.culturaldiplomacy.org/academy/content/pdf/participant-papers/2011/april/biec-roa-nua/1regional_monetary_fund-_the_case_for_latin_america-_elizaveta_v._ogloblina.pdf


10/41

which often has strong ties to foreign banks that facilitate and even promote capital flight, SMEs and

publicly owned companies do not tend to maintain such ties. In addition, particularly in the case of SMEs,entrepreneurs tend to lack both the so- phistication and the resources to profit from the export of capital. This combination of

factors leaves publicly owned companies and SMEs without many other options than saving in domestic banks.The same

local ties that promote domestic saving create incentives from greater domestic investment.Akey element in this sense is the democratizing aspect of the publicly owned company and the SME. Publicly owned companies can

cer- tainly stray from their public mission in search of personal enrichment, but under a democratic government, changes in politicalregimes can modify the institutional behavior of such companies. This is not the case with foreign-owned

companies, which can favor personal enrichment over investment required for essential services with no fear ofpolitical repercussions in local politics.5 At the same time, a strong SME presence offers diversity to an economy. Even thoughSMEsdo not tend to operate in strategic sectors, their presence in other areas minimizes the economic

concentration that grants a disproportional political presence and economic control to large

corporationsthat can assume monopolistic or oligopolistic power in certain markets. Economic decentralization is

one of the strongest prohibitive factors in the formation and maintenance of monopolistic or

oligopolistic sectors that permit corporations to register earnings disproportionate to their

investments. Although the very presence of publicly owned companies and SMEs encour- ages domestic investment and

savings, and therefore slows capital flight, the recuperation of these types of companies requires a

coherent credit policy.After the change of government and economic model of Argentina in 2002, publicly owned banks

have given an explicit priority to the financing of publicly owned companies and SMEs. Although the characteristics of SMEs t end tocomplicate their financing, Argentinean publicly owned banks maintain a strong leadership in the channeling of resources towardthis type of business, which realized roughly 70 percent of productive investment in the country following the crisis (CAME 2005).The situation in Mexico offers a sharp contrast. Without a strong public commercial bank g bkg - S g g g 16 S bkg k (B x 2009) Lkw kg x b w P x (P) F (F on),have had to finance themselves in international capital markets in quantities to the order of $50 billion (SHCP 2009).

Cp solves the sustainability of the Latin American economies

(Marshall 11 - B S N w Lkg I J P 2011)The transformation in the composition of local economies was accompanied by the elimination of all filters between national economies and the global

economy.The Washington consensus, which inspired the policy of financial opening andthe subsequent

g bk w g x gbz stent andgrowingdollarization of the region, thereby creating a double monetary circuit in which much of investment in local curre ncies is converted intodollars and saved or invested abroad, and in which the expected strength of the dollar has become one of the most important r eferences for private

sector investment decisions (Correa 2008; Parguez 2010). The dollarization of Latin American economies has led to

persistent capital flight at times of financial calm and has created pervasive situations of

currency mismatching that have been key contributors tobanking crises in the regionduring theWashington consensus era.Much like previous periods of Latin American history, the Washington con-sensus period has been able to flourish through

partnerships between the local elite and their international sponsors. However, in this more recent era,much of the extraction of

wealth from the region has been achieved through MNCs and international banking

conglomeratesworking in conjunction and using many of the tools common to the era of financialization. As in L

history, the Washington consensus period has been characterized by the transfer of wealth, not

only out of the region but also internally, from the majority of the regions citizenry to the

local elitea fact attested to by growing levels of economic inequality.In recent years, these tendencies have been reversed to varying degreesin South America, as the increased public participation in political processes has led to significant, yet in many cases only partial, ruptures with

Washington consensus policies in most of the region. However, particularly in the current moment of such great global

economic uncertainty, if these gains are to be consolidated, the region must continue to increase its

economic sovereignty and, in particular, reduce its dependence on external financing. As will be argued,

proposals regarding the Banco del Sur must be seen within the context of the replacement of external

financingwith affordable and stable domestic financing, achievable only through the recovery of

fiscal, monetary, and credit policies, which in turn require the strengthening of the role of domestically owned firms, particularlystate-owned ones, and the recuperation of national banking systems.


11/41

Bank of the South is keyglobal institutions increase the risk of economic decline

(Jackson 08 V Jk N S T P S T IF L : S x g Vz 2008

http://forms.gradsch.psu.edu/diversity/mcnair/mcnair_jrnl2008/files/Jackson.pdf)

There are clear benefits for Latin American countries to separate relations with the IMF.Whatever the economics involved, severing relations with the IMF is always good politics, in Latin America in particular (Economist2008). After Brazil's finance ministry announced that it would repay early its entire debt of $15.5 billion owed to the IMF over the

next two years, the government immediately urged Nestor Kirchner, Argentina's president, into an identical declaration. He said hisgovernment would repay $9.8 billion to the Fund, before the end of the month. Both governments claimed they would make

financial gains from the move. Brazil saved over $900m in interest payments, and Argentina saved $842m (Economist 2008).Through this it is shown that individual countries profit from disentangling from IMF loans and the debt they subsequently cause.In

Venezuela, leaders of several South American nations have signed a founding document to create a new body, the Bank of the

South. This institution is proposed as an alternative to multilateral credit organizations such as the International F Bk T w w b Vz P Hg z T w gis not, I insist, anti-globalization but globalization with a conscience -for human development, equity and democracy; globalization b ' bHugo Chavez (Interview w/ New Perspectives Quarterly.) While Chavez

has been mistakenly accused of Anti-Americanism and also Anti-globalization, he argues firstly for a regional globalization

that is fairer to underdeveloped countries as they are not given an equal voting power in the

current IMF decision making process. Once countries are given the opportunity to trade and cooperate on a regional

level there is a greater prospect for development to compete on a global level.ConclusionsIn the quantitative methods of mystudy I found that IMF loans are correlated with lower GDP growth and higher rates of poverty. In

years IMF loans increased, I saw that poverty rates also increased, and GDP growth either

declined or remained stagnant.In the qualitative respect I found three distinct responses to the IMF and globalizationvarying from a conservative neoliberal approach to one that favored greater economic equality in the international monetary

system. Since my research suggests that the processes of the IMF are linked to an extreme imbalance of

power, the idea of greater Latin American unification and specifically a Bank of the South as

proposed by President79Hugo Chavez seems the most effective approach. I would also hypothesize regionalunification across the globe would be most effective.


12/41

BOS CPSolvencyEnergy

The bank solves energy investment while avoiding neoliberal linkages of current policies

(Zibechi 07, Ral Zibechi, researcher in social movements, journalist and writer. He is a columnist and international analyst for La Jor Bkof the South: Tw F 10 J 2007 ://wwg//-archives-60/805-bank-of-the-south-toward-

financial-autonomy)

In some ways, the Bank of the South formspart of the process of distancing their economies from

neoliberaleconomic policythat has characterized many of the countries in the region to one degree or another. In 2006 bothBrazil and Argentina paid off their IMF loans ahead of schedule and began to withdraw in practice from that institution. Last March,the eleven countries of the Union of South American Nations (formerly the CSN) proposed the creation of a regional stabilizing fund

of US$5 billion7 to prevent speculative attacks on national currencies. According to the member countries, this was a means

to avoid dependence on the IMFin crisis situations, thereby creating a complementary mechanism to that proposed inthe Bank of the South.Nevertheless, in order to comply with its charter the BoS should not simply play a regional financial role butshould counteract the effects of decades of deregulation and reduced economic protection. Neoliberalism is not just an economiccreed but a determining factor in all facets of society. For that very reason the BoS cannot limit itself to competing with the IADB,the World Bank, and the CAF in financing development projects, but should instead question the core definition of the term

"development" as understood by these organizations8.To begin with, the new bank should confront the process of

converting the planet into an object of international finance, which is a key precept of

neoliberal policy. Also, it should provide an impetus for development based on sovereignty of the peoples and integrationthat is not founded on free market precepts but on egalitarian and fraternal relations between peoples, regions, and nations.Assuch, the financing of large infrastructure projectsone of the main themes for all regional banksshould give priority to internaldevelopment. Until recently, the common interpretation of the term infrastructure was that of finding the best way to link regionalcountries with markets in the developed world to export their raw materials to serve multinationals and northern markets.

Argentine economist Aldo Ferrer writes, "The Bank of the South should not be considered as an

alternative to the IMFpurely in the sense of its financial operations, instead it should be viewed as a bank for

investment in technological and social change. 9" Energy will be one of the first priorities of

the new bank and one of its first projects will be to finance the proposed South American Gas Pipeline, which will link

Venezuela with Argentina, passing through Brazil. This will be a real regional integration project because the

gas transport is oriented toward regional economic development as opposed to exporting it to

marketsin the developed world.Finally the Bank of the South can play a decisive role in reuniting a region divided by decades of

neoliberalism. To implement the neoliberal model, its main beneficiariesthe financial institutions and monopolistic corporationshave weakened or dismantled the power of the nation state. It may be that one of the primary tasks of the BoS

could be rebuilding state control and regulations .These types of questions are at the center

of the Latin American regional agenda. The Bank of the South should not be considered an end in itself but rather atool to further the changes currently underway. This is its main potential. It is coming into being to accomplish this, and all othertasks should be considered secondary.It will be, above all, a different kind of bank: its members shouldn't see it as a way ofadvancing their personal careers, its funds should not be destined to accumulate maximum earnings but dedicated to fulfilling the

needs of the peoples and those who have historically been excluded.

BoS solvency for energy investment + banking reform

(Zibechi 07, Ral Zibechi, researcher in social movements, journalist and writer. He is a columnist and international analyst for La Jor Bk

of the South: Tow F 10 J 2007 ://wwg//-archives-60/805-bank-of-the-south-toward-financial-autonomy)

The founding documents of the BoS propose the creation of a financial architecture that will bring greater autonomy to the region,buffering it from international capital markets. "To break the vicious circle of financing in the region, where our reserves are placedin northern banks at interest rates below what we are charged when they lend to us," the document states6. In short, the new bankoffers the dual benefits of escaping the financial controls exercised by developed countries and capital markets. The six member

countries currently have US$164 billion deposited in northern developed countries.In some ways, the Bank of the South forms partof the process of distancing their economies from neoliberal economic policy that has characterized many of the countries in theregion to one degree or another. In 2006 both Brazil and Argentina paid off their IMF loans ahead of schedule and began to

withdraw in practice from that institution. Last March, the eleven countries of the Union of South American Nations (formerly theCSN) proposed the creation of a regional stabilizing fund of US$5 billion7 to prevent speculative attacks on national currencies.


13/41

According to the member countries, this was a means to avoid dependence on the IMF in crisis situations, thereby creating a

complementary mechanism to that proposed in the Bank of the South.Nevertheless, in order to comply with its charter the BoS

should not simply play a regional financial role but should counteract the effects of decades of

deregulation and reduced economic protection. Neoliberalism is not just an economic creed but a determining

factor in all facets of society. For that very reason the BoScannot limit itself to competing with the IADB, the World Bank, and the

CAF in financing development projects, but should instead question the core definition of the term

"development" as understood bythese organizations8.To begin with, the new bank shouldconfront the process of converting the planet into an object of international finance, which is a keyprecept of neoliberal policy. Also, it should provide an impetus for development based on sovereignty of the peoples and integrationthat is not founded on free market precepts but on egalitarian and fraternal relations between peoples, regions, and nations.As

such, the financing of large infrastructure projectsone of the main themes for all regional

banksshould give priority to internal development.Until recently, the common interpretation of the terminfrastructure was that of finding the best way to link regional countries with markets in the developed world to export their raw

materials to serve multinationals and northern markets.Argentine economist Aldo Ferrer writes, "The Bank of the South

should not be considered as an alternative to the IMF purely in the sense of its financial operations, instead

it should be viewed as a bank for investment in technological and social change.9" Energy will

be one of the first priorities of the new bank and one of its first projects will be to finance the proposed South American

Gas Pipeline, which will link Venezuela with Argentina, passing through Brazil. This will be a real regional integration

project because the gas transport is oriented toward regional economic development asopposed to exporting it to marketsin the developed world.Finally the Bank of the South can play a

decisive role in reuniting a region divided by decades of neoliberalism . To implement the neoliberalmodel, its main beneficiariesthe financial institutions and monopolistic corporationshave weakened or dismantled the power ofthe nation state. It may be that one of the primary tasks of the BoS could be rebuilding state control and regulations10.These types

of questions are at the center of the Latin American regional agenda. The Bank of the South should not be considered an end in itselfbut rather a tool to further the changes currently underway. This is its main potential. It is coming into being to accomplish this, and

all other tasks should be considered secondary.It will be, above all, a different kind of bank: its members shouldn't see

it as a way of advancing their personal careers, its funds should not be destined to accumulate

maximum earnings but dedicated to fulfilling the needs of the peoples and those who have

historically been excluded.


14/41

BOS CPSolvencyStability/DemocracyBoS reform and investment Solves Latin American stability/democracy

(Buono & Barra 09,Richard A. Dello Buono, Professor of Sociology at Manhattan College, Ximena de la Barra, international NIF L Pb P LAmerica after the Neoliberal Debacle: Another Region isPb 2009 g 259-261)

The Bank of the South needs to be consideredfrom a geopolitical pointof view as a strategy forrecovering sovereignty. It seeks to form new contractual arrangements that can overcome the kinds of market dynamics b b T fi-cial architecture of the region and stands to give theregion greaterbargaining power when negotiating with the United States and Europe. By the time of its initial formation at the endof June 2007, the participantcountries of the Bank of the South included Argentina. Brazil, Bolivia.Ecuador, Paraguay, Uruguay,and Venezuela. Surinam and Guyana have alsojoined. On the other hand, Chile, Colombia, and Peru resisted the idea be-cause itwould pay lower interest rates on capital when compared to otherinternational options. (Chile, nevertheless, participates as anobserver.)T " b demarcate whichcountries prefer to privilege their status as" States at the expense of greater regional sovereignty. Although Brazil ultimately agreed to join, itbacked away from the magnitude of investment initially con T fl w gg w

Brazilian government over its international conduct. Nevertheless, Optimists like President Rafael Correa of Ecuador think that the

Bank of the South fi Latin American Central Bank. He argues that it should carefully

distance itself from the logic of markets anddraw closer to the logic of cooperation and development. He

also recalledthat "the financial logic privileging the interests of speculative capital hasfailedin

combating poverty as the World Bank and IMF stated they would,making it imperative for us to create our own

institutions with this new re-gional financial logic and with the final objective of regional

integrationasthe 'patria grtmde"' (Ramos, 2007).The lack of a popular character in the integrationist policies of Brazilbecame once more evident in the case of the founding of the Bank of theSouth. lt became apparent that the project as seen byBrazil did not intendto respond to any sort of emancipatory agenda, but rather to its interests ofg fl g

affairs (Buela. 2007). Brazil remained stead-fastly focused on cultivating its image as one ofthe emerging internationalpoints ofreference and a worthy Latin American partner for participation inthe transnational dominated global economy. Brazil's resistanceto fullyparticipate in the Bank of the South until its novel edges were smoothed outwas among other things symbolized by its

intention to force the incipient (0 fig I Igof Regionalinfrastructure in South America (IIRSA) infrastructure project(Zibechi, 2007b; Ugarteche, 2007).This attempt to ensure the futureof IIRSA, largely rejected by otherb b bfi and collateral

negative impacts on the region, via linkage to the Bank ofthe South would guarantee that the Banco Nacional de DesarrolloEconomico y Social de Brasil (BANDES; National Social and Economic De-velopment Bank) continued being the principal

development bank in theregion. On the other hand, Eric loussaint, president ofthe Belgium-basedCommittee for the Cancellation

ofthe'|'hird World Debt [CAIJTM] arguesfor the necessity to prevent the Bank of the South from becoming trans-formed intoanother World Bank whose objective would be to supporttransnational capital in place of improving the qual ity of life of the re-

gion's excluded majority.ln a surprising twist, Colombian President Alvaro Uribe decided tosupport the Bank of the South once itbecame clear that his efforts to win w S w gg all in the U.S.Congress. Even at thelaunching of the bank, full agreement was stilllacking with respect to the initial allotments of capital and the overallguidelines formember contributions. ln the end, this resulted in a muchsmaller initial sum of working capital in the bank than originally con-

templated.The Bank of the South has also captured the imagination of many of theregions

social movements. In an open letter to the presidents of the Bankof the South member countries. a number of civil

society organizations acknowledge its potential role but demanded that democratic

procedures forpopular participation be incorporatedWe believe that the Bank of the South must be part ofa unitary regional response.together with the founding of a South stabilization fund, a common regionalcurrency, theundertaking of audits ofi nternal and external debt claims, and thenon-payment of those debts illegitimately demanded of our

countries. A response that contributes to cutting the ties of dependency withuncertain andhighly

speculative global capital markets, enabling the region to channel its own savingspower, stop flg w social and economic needs of the people. 'The debate on theimplementation ofan autonomous South-South bank is of utmost importance, and for that reasonwe support the demand ofmany organizations and movements in the region, that national and regional instances be created immediately in order to insurethe necessary information, participation, and consultation with the organizations in societies which will be affected by the creation

of the South Bank.We think that it is essential that the South Rank start out with clear defini-tions

regarding its resources, obiectives, organization, regulations, decision-making, management,

and operations, in such a way that:) I fi g b the region's

own development with sovereignty and in solidarity. Development defined as the unfolding of the attributes,

resources, and poten-tial of persons, communities and peoples; a process that cannot takeplace


15/41

without their being the principal protagonists.2) it constitutes its capital and management structure in an

egalitarian wayamong the member countries.3) It clearly defines that credit allocations will

be for the strengthening ofthe public and social sector; giving priority to the redistribution

ofwealth and to environmental protection; contributing to the overcomingof existing

asymmetries; w their economic. social, cultural, and environmental rights and

for theirg w -determination. For this reasonwe propose that the South Bank

direct its financing to socially and envi-ronmentally sustainable projects and do not use them

to fundIIRSA andother mega projects, as well as extractive contaminating or socially ex-clusive investments that do not

rely on the agreement and do not bene-fit the affected populations.lt explicitly establishes open mechanisms

for public information andcontrol, establishing that the bank's officials and employees will

have nopersonal immunity or fiscal privileges, that the rendering of accounts willhe made known and put to theconsideration of Parliaments and of civilsociety, and that all information shall be considered public. We believethat all of theb kg w S QMay 3rd, 2007, where : T g g-ernments a mandate to provide the region with new instruments of integration. For development that must be based ondemocratic, transparent,and participatory schemes that are responsible to their constituencies."


16/41

BOS CPSolvencyInfrastructureCP has the capacity to invest in infrastructurekey priority

(Perez 10, Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of theS G P R NFI T T International Financial Regime:T Bk S R Lxbg F Ob 2010 ://x-

europa.info/publications/articles/bank_of_the_south/)

The Banco del Suris closely tied to another Latin American organization, the Union of South American Nations (UNASUR orUNASUL), founded in 2008. Slightly oversimplified, one could say that Banco del Sur is the in-house bank of UNASUR. It is possibleto identify three goals for the Banco del Sur:regional integration under the new notion of supranational sovereigntyreduction

of asymmetries within and between the South American countries, andfinancing an alternative developmentThe new major

development prioritiesagreed by the seven presidents are:food sovereigntyhealth sovereigntyenergysovereignty, andsovereignty in knowledge productionfinancing adequate to the popular economydeployment of physicalinfrastructure with continental projectionsThat means, on the one hand, productive investments, including support for small and

medium-sized enterprises, or for infrastructural projectswhich promote the growing together of the continent. On theother, it means social investments, including those in education, the health system and sewage systemsmore or less the opposite

of what we are familiar with the old financial architecture institution (IMF, World Bank, etc). A regional system of health careprevention and certification, research and development for the neglected illness that are not profitable market for the transnationalcorporations, affecting basically millions of poor people, the production of generic medicines: all those projects could be developedwith Banco del Sur.The high prestige of the so-called Gas Pipeline of the South is to carry Venezuelan gas to Bolivia and Argentina.

This project may provide an important impulse for further regional development, as South America has hitherto been split betweenimporters and exporters of gas. Brazil and Chile, as importers, would like to diversify their imports, and become as independent aspossible from imports from Latin American countries. But also, we have the copper to wave the grid towards the most remote zoneof the continent. And also, geothermal, eolic, hydroelectric potential could be included in a continentally coherent platform ofenergy provision.Food sovereignty is possible too: A regional system of virtual inventories upon the bases of a net of networks oflocally managed silos and warehouses, with the participation of the local producers, in order to guarantee a strategic reserve of food

for any contingency in the continent, mobilizing also peasant and indigenous productions, stabilizing crops prices, an adequate

system of post-harvest management, etc.Here, the Banco del Sur could help strengthenthe material foundations

for regional cooperation. The expansion of the transport infrastructureis a further goal to facilitate the massive exchange

of goods, and people, for instance, with a network of railroadsfor the whole continent. All those projects will installscience and technology at the core of the Latin American integration process.


17/41

BOS CPSolvencyHealth System/Disease PreventionCP solves health investmentskey priority

(Perez 10, Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of theS G P R NFI T T International Financial Regime:T Bk S R Lxbg F Ob 2010 ://x-




development prioritiesagreed by the seven presidents are:food sovereigntyhealth sovereigntyenergysovereignty, andsovereignty in knowledge productionfinancing adequate to the popular economydeployment of physicalinfrastructure with continental projectionsThat means, on the one hand, productive investments, including support for small and

medium-sized enterprises, or for infrastructural projects which promote the growing together of the continent. On the other, it

means social investments, includingthose in education, the health systemand sewage systemsmore or less

the opposite of what we are familiar with the old financial architecture institution (IMF, World Bank, etc). A regional system

of health care prevention and certification, research and development for the neglected

illnessthat are not profitable market for the transnational corporations, affecting basically millions of poor people, the

production of generic medicines: all those projects could be developed with Banco del Sur.


18/41

BOS CPSolvencyEducation

Counterplan solves education investmentskey priority

(Perez 10, Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of the

S G P R NFI The Transformation of theI F Rg:T Bk S R Lxbg F Ob 2010 ://x-europa.info/publications/articles/bank_of_the_south/)



development prioritiesagreed by the seven presidents are:food sovereigntyhealth sovereigntyenergy

sovereignty, andsovereignty in knowledge productionfinancing adequate to the popular economydeployment of physical infrastructure with continental projectionsThat means, on the one hand, productive investments, includingsupport for small and medium-sized enterprises, or for infrastructural projects which promote the growing together of the

continent. On the other, it means social investments, including those in education, the health system andsewage systemsmore or less the opposite of what we are familiar with the old financial architecture institution (IMF, World Bank,etc). A regional system of health care prevention and certification, research and development for the neglected illness that are not

profitable market for the transnational corporations, affecting basically millions of poor people, the production of generic medicines:all those projects could be developed with Banco del Sur.


19/41

BOS CPSolvencyAgricultureCounterplan solves food production and priceslocal investments are sustainable

(Perez 10, Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of theSouth and the Government Plenipotenti R NFI T T I F Rg:T Bk S R Lxbg F Ob 2010 ://x-




development prioritiesagreed by the seven presidents are:food sovereigntyhealth sovereigntyenergysovereignty, andsovereignty in knowledge productionfinancing adequate to the popular economydeployment of physicalinfrastructure with continental projectionsThat means, on the one hand, productive investments, including support for small andmedium-sized enterprises, or for infrastructural projects which promote the growing together of the continent. On the other, itmeans social investments, including those in education, the health system and sewage systemsmore or less the opposite of whatwe are familiar with the old financial architecture institution (IMF, World Bank, etc). A regional system of health care prevention andcertification, research and development for the neglected illness that are not profitable market for the transnational corporations,

affecting basically millions of poor people, the production of generic medicines: all those projects could be developed

with Banco del Sur.The high prestige of the so-called Gas Pipeline of the South is to carry Venezuelan gas to Bolivia andArgentina. This project may provide an important impulse for further regional development, as South America has hitherto beensplit between importers and exporters of gas. Brazil and Chile, as importers, would like to diversify their imports, and become as

independent as possible from imports from Latin American countries. But also, we have the copper to wave the grid towards themost remote zone of the continent. And also, geothermal, eolic, hydroelectric potential could be included in a continentally

coherent platform of energy provision.Food sovereignty is possibletoo: A regional system of virtual inventories upon

the bases of a net of networks of locally managed silos and warehouses, with the participation of the

local producers,in order to guarantee a strategic reserve of food for any contingency in the continent,

mobilizingalso peasant and indigenous productions, stabilizing crops prices, an adequate system of

post-harvest management, etc.


20/41


21/41


22/41


23/41

BOS CPSolvency--AT: CorruptionReform avoids corruptionholds banks accountable through regulation

(Marshall 09 - Fg L : T Bk S 2009http://desire2learn.laurentienne.ca/NR/rdonlyres/BE069B08-80B5-4AFB-BBDC-2FAD57083546/0/Wesley.pdf)

Under this scheme, the regional development bank wouldhave the less complicated operational structure, andwould act solely as a center forthe distribution of pooled regional fundsand as a regulator for nationaldevelopment banks that receive the funds. Member countries would agree on specific criteria for which regional funds could beused, as well as the contributions that each member would commit, and the amount of funding that each country would receive.Regional inequalities could be addressed through this mechanism, as poorer states, such as Paraguay, for example, would be alloteda greater amount of funds than it contributes. Intraregional infrastructure projects would also be funded in this fashion, with eachnational development or state owned commercial bank carrying out the portion of the project that corresponds to their country.The Brazilian development bank, Banco Nacional de Desenvolvimiento Economico e Social and the Argentine state owned

commercial bank Banco de la Nacion (BN), a lready finance infrastructure projects between the two countries in this fashion.The

other task of the regional development bank would be to regulate and supervise national

development banks. The Achilles heel of the public bank has always been corruption, in thatgovernmen k g bk

control or divert their funds to politically motivated projects of little utility to the national economy. The regional

development bank would therefore receive a clear mandate to regulate banks that receivetheir funds, which would state that only a certain, although ample, range of productive

endeavors would be eligible for funding.In addition, the regional7development bank would also be charged withthe task of supervising national banks, ensuring that received funds are used for their stated purposes in a efficient manner.
http://desire2learn.laurentienne.ca/NR/rdonlyres/BE069B08-80B5-4AFB-BBDC-2FAD57083546/0/Wesley.pdfhttp://desire2learn.laurentienne.ca/NR/rdonlyres/BE069B08-80B5-4AFB-BBDC-2FAD57083546/0/Wesley.pdf


24/41

BOS CPSolvencyAT: CompetitivenessNo riskof competitiveness Bank of the South is the only way to stabilize banks in the region

and prevent them from becoming neoliberal institutions

(Marshall 11 - B S the Need for Downstream Lkg I J P 2011)

As has been stressed in this paper, banking failures are often homegrown and endogenous, and an

added benefit of a regional central bank would be the possibility of creating a criteria of bank

supervision and regulation that would be negotiated among member countries and implemented on a national level. Suchbanking standards, akin to a Basel-type accord, would attempt to minimize well-known and historically reproduced credit risks thathave often led to endogenous banking crises. As the possibility of having foreign agents (in this case those of countries within theregion) regulate national banking sectors would likely be unpalatable to many, the role of the regional central bank should be limitedto the training of regulatory personnel and the exercising of moral suasion over national regulators when imbalances in nationalbanking systems are perceived to be growing. All binding supervision and regulation would occur at the national level.A similar

framework could be established for national publicly owned banks that provide services characteristic of a development bank.Regionwide criteria would be agreed on, both in terms of regulatory and supervisory standards and in relation to what type ofactivities could be funded by such banks when using funds from Banco del Sur, and the national banks would subsequently distribute

credit according to the established criteria.Under such a scheme, Banco del Sur would be the linchpin of

the new financial architecture of South America, but it would not represent a financial

institution that competes with any existing bank. To take advantage of installed capacity and to protect the

economic sovereignty of member states, the role of national publicly owned banks would be

strengthenedin all senses; the only difference would be that they would operate under a distinct organizational logic. Unlike bk g w the needs of international financial interests,

central banks and other national banking institutions would pursue the interest of

democratized societies, seeking full employment and equitable economic growth under the

auspices of Banco del Sur.


25/41

BOS CPSolvencyAT: Delays

Reforms solve delaygreater coordination

(Ortiz & Ugarteche 08, Isabel Ortiz, Director Global Social Justice Program Initiative for Policy Dialogue at ColumbiaUniversity, Oscar Ugarteche , Institute of Economic Research at the National Autonomous University of Mexico, Bk S:

Pg g Nb 15 2008 :///3/?b_=1353450)

It is fundamental toovercome differences among member countries and expedite the working method to

create the Bank of the South. What is at stake is not only the creation of a development bank, but al so a new

regional architecture that entailsthree interrelated elements: 1. A Monetary Union of the South 2. A monetary

stabilization fund , the Fund of the South 3. A Bank of the South that utilizes existing reserves for regional development. SouthAmerica is not alone in this attempt to change the international financial architecture from a regional perspective. The tough realitythat all developing countries face is the current transfer of resources from the South to the North. As shown in the graph below,since 2000, instead of wealthy co untries in the North transferring capital and development aid to the countries in the South, it is thereverse: unbelievably, poor countries finance rich countries, resulting in a negative flow of capital from South to North2. It is

necessary to stop to this flow. It is essential that the savings generated in developing countries are not

used to finance consumption in the North, but invested in the development of Southern

countries.Asia with its Chiang Mai Initiative, the Middle East with its Bahrein Initiative and most recently Africa, are allembarking on processessimilar to Latin Ameri I g w g g w I

currency is still not being used despite it was designed and ready to be operational back in 2002. Until now, the Asian bond markethas only served for public bonds and has not yet started to issue private bonds. The process of designing a basket of currencies inthe Middle East is in an intermediate phase, no hints as to when it may be put into practice. The Bank of the South will have a fund

of collateralized guarantees for issuing bonds so that it can keep South American savings and international reserves circulatingw g T L Bk S w b rms of

policy space as well as for the additional funds it will provide to invest in the region. The time for this is now, when the financial crisisin the United States is turning into an international crisis.Problems with the Work ing Method to Create the Bank of the SouthTo

date, the Bk S decision-making system consists of(1) setting up Ministerial Summits, which

are followed by(2) meetings of expertsfrom the National Technical Commissions who implement the

decisionstaken by the Ministers of the member countries.G g g g

Ministers from big countries, the first Ministerial Meeting after signing the Founding Charter on Dec. 9,

2007, did not happen until 120 days later, on April 15, 2008, in Montevideo. Worse, only another Ministerial Summithas followed since, on June 27 in Buenos Aires, and it was called with such little notice that only four ministers could attend. As aresult, the minutes from Montevideo have notbeen ratified by all countries.The system of first having a Ministerial Meeting and

later a meeting for the National Technical Commissions has proved to be slow and ineffective. It would be much more

efficient and adequate to agree on some terms of reference, and to commission a technical

team that would carry out the work without interruptions, to be later be approved and/or

modified by the member countries. This is a normal working method used by multilateral

development banks and regional organizations, it would speed up the process enormously .


26/41

BOS CPSolvencyAT: FundingBank of the South has access to 20 billion

(Kilpatrick 10, Alejandro Kilpatrick, Programme Coordinator, Latin America and the Caribbean and the Climate ChangeF Pg Sg g g: B Shttp://global-mechanism.org/en/News/Spearheading-regional-natural-resource-sovereignty-Banco-del-Sur,6/14/10)

As a development bank 'with a difference', Banco del Sur(Bank of the South), seeks to break away from traditional bankbusiness and promote innovative approaches to tackling today's development challenges. Banco del Sur sees development as anissue of sovereignty and has made achieving regional sovereignty in terms of food, energy, healthcare and natural resources itsultimate goal. It stands out from the crowd as being the only regional financial institution to have made natural resource

management and combating land degradation a strategic priority.Founded in December 2007, Banco del Sur fosters the

economic and social developmentof countries belonging to the Union of South American Nations (UNASUR) -Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Uruguay and Venezuela by promoting South American integration in theframework of a new regional financial architecture that will enjoy a stable, regional monetary system and its own currency and will

no longer be dependent on international finance. Its anticipated portfolio for the first 10 years is around USD 20

billion. These funds will come exclusively from the region and will be utilized in the region . Non-lending mechanisms will be the Bank's 'quality stamp'.

It could pull reservescountries have massive savings to invest in the plan

(Tamayo 07,Eduardo Tamayo G., journalist, PHD at the Universidad Andina Simn Bolvar in Quito, correspondent in Latin I g LI N T Bk S b5/18/07, http://www.other-news.info/2007/05/the-bank-of-the-south-in-debate/)Technical committees for the project had met four times within the previous month, demonstrating the political will of these sixcountries to bring about the Bank of the South. The May meeting of the Finance Ministers in Quito and the presence at this

gathering of the President of Ecuador, Rafael Correa, is another indicator of the eagerness to realize this initiative. The Bank of

the South would begin with an initial capital of 7 billion dollars, $600 million of which would be contributedby Venezuela.What is the purpose of the Bank of the South? Minister Patio indicated that the motivation is fundamentally

financial and economic. The six above-mentioned countries have combined international reserves of

$164 billiondeposited in banks within the United States and Europe. However, he added that, paradoxically, Our

countries have all these savings gaining interest at very low interest rates, while concurrently they seekout financial assistance from the World Bank (WB), the International Monetary Fund (IMF) and the Inter-American Development

Bank (IADB). Our countries have an immense amount of savings that could be used to address our b w bg bj (1) I w w institutions paid out to the region in 2005, the IADB spent $4,898 million, the WB $5,087 million and the Andean Development

Corporation (CAF) $1,337 million. This totals $11,322 million, while together we have $164 billion in savings. We have in reserves tentim w 2005 w g w P

No disads--- more funding would emerge from consolidation of regional banks into one

financing authority

(Ortiz 08 Ib Oz Nw South-S : O Rg B SInternational Development Economics Associates, January 2008)

In 2007 and early 2008, countries from MERCOSUR and ALBAassociated to create alternative Banks, Banco del Sur (Bank of

the South), and Banco del ALBA (Bank of ALBA). [4] Several member countries, very critical of the roles of the IMF and the World

Bank, intend that Banco del SurALBA become an instrument ofSouth-South solidarityand fair development.

This alternative to the IFIs is expected to be combined witheither a Fund of the South or arevamped Latin American Reserve Fund (known by its Spanish acronym FLAR), as a regional monetary

fund w b g gainst financial risks. The founding charts of bothBanco del Sur and Banco del ALBA assign one country- one vote, which is an important advance as compared to the rest of

multilateral banks who assign votes according to contributions (so richer countries remain in control). The Bank of the

South intends to raise $7 billion in paid-in capital.

Each member would be obligated to donate 7 billion in capital amounts to over 35 billion
http://global-mechanism.org/en/News/Spearheading-regional-natural-resource-sovereignty-Banco-del-Surhttp://global-mechanism.org/en/News/Spearheading-regional-natural-resource-sovereignty-Banco-del-Surhttp://global-mechanism.org/en/News/Spearheading-regional-natural-resource-sovereignty-Banco-del-Surhttp://global-mechanism.org/en/News/Spearheading-regional-natural-resource-sovereignty-Banco-del-Surhttp://global-mechanism.org/en/News/Spearheading-regional-natural-resource-sovereignty-Banco-del-Sur


27/41

(SiBCI 6/12 Bk S Nw I F Bolivian System of Communication and Information(SiBCI), 6/12/13, http://www.sibci.gob.ve/2013/06/bank-of-the-south-new-international-financial-architecture/)

The Bank of the South(Banco del Sur) cabinet will define schedules for capital payments of the new regional financial

institution, made up by Argentina, Bolivia, Brazil, Ecuador, Uruguay and Venezuela . The issue is part ofthe agenda approached in the first meeting of that organ, detailed Venezuelan Finance minister Nelson Merentes, setting up the

activity in Caracas, on Wednesday.Authorized resources for its Bank of the Souths operationadds up to 20

billion dollars and its capital is 10 billion dollars, with initial capital of 7 billion dollar per partner, stipulates theg gement, endorsed in September 2009.


28/41

BOS CPSolvency--AT: InstabilityCounterplan is key to the integration of the regionno risk of instability

(Mallen 07, Roberto Mallen, COHA Research Associate , BNK OF TH SOTH: NOTHR STP TOR LTIN RININTGRTION H b 7 2007 ://wwwg/bk-of-the-south-another-step-toward-latin-american-integration/)

Integration has been a recurrent theme on Chvezs political agenda g k b more regional-centric ALBA (Bolivarian Alternative for the Americas)which is given reality by the oil concessions Venezuela has

negotiated with various Latin American countries, as well as his most recent proposal for a development bank for South

America, which has beengiven theworking title of Banco del Sur(Bank of the South).The Bank of the South

appears to be one of the regions most compelling projects leading towards authentic Latin American financialbolstering, as well as helping to allow for a new-found autonomy. It appears that for the first time in i ts history, the region actuallywill have its own entirely autonomous financial institution with each of its members having one vote and which is most likely

scheduled to be capitalized from $7 to 8 billion dollars. This large institution will be capable of promoting

financial integration and cooperation b j it will support the development of badly

needed infrastructure projects, especially in the energy sector. This initiative has the support of sevenSouth American countries (Venezuela, Ecuador, Bolivia, Brazil, Argentina, Uruguay, and Paraguay) in addition to several other

Caribbean and Asian nations that already have expressed varying degrees of interest in the project.


29/41

BOS CP--AT: Squo SolvesOther BanksOther banks reinforce the Washington consensusonly reforming the Banco del Sur solves

(Paez 11, Pedro Paez, Plenipotentiary Ambassador for the Ecuadorian Government on the New International FinancialArchitectu P T g B S F gbeyond the crisiscreating an innovative Ob 2011

http://www.tni.org/sites/www.tni.org/files/PedroPaezInterview-en-final.pdf)

In Latin America, for example, there are more than 100 development institutions and banks operating at

multilateral , regional, sub-regional, national and even sub-national levels. A significant numberof these development banks

were linked tothe industrializationthrough import substitution project that had been in place in the region since the

1970s and involved both the World Bank and the InterAmerican Development Bank. Paradoxically these institutions have

gradually moved away from their original purpose . For example, only two years ago the InterAmericanDevelopment Bank was forced to recognize it had lost more than 20 percent of its social capital due to investment in toxic assets.

Here the natural question arises as to why a development bank for Latin America is makingspeculative

investments in the UnitedStates? Without a doubt, there will be justifications related to treasury management and other

questions, but this only demonstrates the de-naturalization of these typesof banks. The same could be said about the Latin

American Development Bank or CAF andtheIDBitself in creating loans that have names like Combat

Poverty but in realityare in fact loans to finance consultations on poverty which tend to be linked

toa short list of consultants whobasically reproducethe vision and the concepts of the Washington

consensusregarding these problems.In this way, the perspective of the development banks as investment banks on priorityissues for regional development such as the construction of infrastructure for example, have been abandoned and in their placethese development institutions are converted into regional instruments that also represent the old international financialarchitecture.


30/41


31/41

***AFF Answers***


32/41

AT: BOS CP--Cant SolveCorruptionCP would avoid anti-money laundering policiesresults in large-scale corruption. Regulations

dont solve.

(Orsak & Valero 08, Brian Orsak, managing editor of ComplianceAdvantage.com and

gnews division since 2008, and a reporter for the company since March2007 V F Y S bk g L k g 01 2007 ://wwww-check.com/media/d/content_pressarticle_reference/FortentRijock200708.pdf)Financial institutions should also be concerned that the organization will become a haven for corrupt

politicians seeking to continue their influence even in the wake of criminal scandals, said Ricardo

Tondo, an AML consultant based in Buenos Aires.Argentina has attached itself to the Banco del Sur to

shelter its corrupt officials as officials of that bank, T L b x ex-

president Antonio de la Rua, who was named president of Mercosur b Even

if the organization adopts FATFsAML and counter terrorism financing standards, it will have

little impact on how money is distributed , according to Antonio Hyman-Bouchereau, counsel for the IMF.T

bk anti-money laundering policies are in no way a priority for Chvez wabout the anti- g bk Whatever the concerns over Banco S g gz L TF b g Lkan economist at Carnegie Mellon University and the Washington, D.C.-based think tank, the American Enterprise Institute for PublicPolicy Research.

US involvement is keyCP causes corruption and money laundering, destroying solvency

(Camargo 07 P g B S S F S T g Rg Rk Pg Ob 26 2007 ://sis.net/2007/10/26/banco-del-sur-is-a-slush-fund-for-sponsors-of-terror-drug-running-criminals-mafias-racketeers-and-propagandists.aspx)In the next two weeks, agents from the Chavez government and Soros-backed NGOs [using the phrase loosely] will unveil their new

plans for Banco Del Sur. With no legitimate bank charterand no intentions whatsoever to perform as a development-

investment bank, Banco del Sur should be denouncedon arrival for what it is. And what it is ...is a slush fund

for criminal racketeering, money laundering, mafia thugs and propagandists for the New Man of the New World

Order.Crime of this magnitude is not new, it is not manly, and it is not order. What it ishowever is a composite

of the worst forms of undemocratic acts of repressive economic fascism with a singular focus tobribeand cajole regional

militaries and so called political leaders [off the books] in to a regional blockade on functional financial performance, ceding all

common ground on legitimate financial performances to a singular and extremely dirty

Chavez-backed slush fund.We know this because Hugo Chavez is adding more and more requirements to his latest fullpowers act, sometimes called constituent constitutional assemblies. In return for a 30 hour work week at full pay, Chavez promisesto remove any autonomous Central Bank and hold full control over all of Venezuela's government. He does anyway if any cared to

look. Chavez controls the military, the paramilitary, the courts, the Congress, the media and now all financial institutions.Meanwhile, our utterly disreputable man on the job, always shilling for his real boss from Chile who now works as a consultant forGeorge Soros, tells us that as long as Chavez pretends that he has actual opposition political parties, Chavez is just all right with the

OAS and is doing a great job. Insulza, you see, is enabling Chavez's dictatorship and his ruinous Banco del Sur because it will weakenthe World Bank-InterAmerican Development Bank demands for globally accepted transparency and operational funding. Chavez and

Insulza think this is a good idea. This is not a good idea and as such legitimizes criminal rackets whose dirty monies are deep andwide now. Read what Insulza says about Chavez's new fascist governmental plans here.Ignoring the Catholic church, humanrights groups, citizen groups- and the truth- in Venezuela and all normative standards for legitimate governance, Chavez's paid

clowns justify the Chavez end to free speech in Venezuela by repeating their manipulative mantra.." .`Restricting information isn'trestricting the people's right to be informed,' pro-Chvez lawmaker Desire Santos Amaral said. `It's avoiding abuses, excesses.'''

And Insulza puts the frosting on this cancer producing cake by telling us he is "concerned" about the many Chavez constitutionalinstallations now dividing South America in to two regions: one with Chavez already, bought and sold and the other struggling withthe enormous bribery to buy their souls also. The HERALD reports, "But Insulza downplayed concerns that proposed changes in

Venezuela would lead to the establishment of a Cuba-style single-party state, saying Chavez `is not saying anything about eliminatingthe parties in opposition.'" Insulza is a liar. He was never more than a useful Chilean functionary for his socialist president, third rateat that. Today his ruinous approach to democracy is paving the way to hell for Latin America. Insulza knows very well that Chavez


33/41

permits so called opposition in Venezuela for window dressing- in name only- function. There is not one meaningful voice permittedin Chavez's replica of Castro's prison gulag now. To claim otherwise, as Insulza does, is ethically irresponsible and shows how

degenerated he has become. Insulza's crime is not that he prefers to remain uneducated: he is surrounded by advisors constantlyranging from Chris Dodd's staff to the total panoply of the Soros pro Chavez, anti Uribe forces of chattering NGOs. Insulza seems to

believe that their assessments hold more value than the oath he took of his high office and does now jigger democracy's tenants tomaintain the onward march of Chavez's socialism-communism-economic fascism- Bolivarianism...call it what you will but never call it

democracy or legitimate, for it is not.Banco del Sur is presented as a legitimate development fund. It is

called a bank. It is not a bank and it is not legitimate. The first thing about a bank- any bank- is integrity andreporting of facts. Chavez will not permit the facts about his Russian money men, his Iranian

movers and transporters nor his money laundering, sometimes called offshore derivatives

gambits. One cannot legitimize what is not legitimate.


34/41

AT: BOS CPCant SolveBacklashThe counterplan causes regional backlash and political divisions that turn instability

(Germain 08 S G J S Bk S RSg? Lw B Rw F 2008http://www.lexisnexis.com.turing.library.northwestern.edu/hottopics/lnacademic/?verb=sr&csi=173459)

On taking office for a third term, Mr. Chavez moved quickly to nationalize a number of utilities and has set

in motion another constitutional reform. However, it is unclear whether a majority of voters

support the shift to greater state control. Opinion polls consistently show that Mr. Chavez's support is based on his pro-poor

policies and the rise in real incomes in recent years, rather than ideological support for socialism. His drive to 'deepen the

revolution' couldpotentially erode support for the government, particularly if at the same time the

government fails to effectively address concerns such as crime, corruption and housing, or if theeconomic environment deteriorates. That said, a cohesive opposition leadership is not currently in sight. n107 Recently, Chavez refused to renewthe license of Radio Caracas Television (RCTV), the country's most influential television station, because the station has been openly hostile towardPresident Chavez. n108 RCTV supported the coup against Chavez in 2002 and it refused to bend to government directives, Chavez's decision to shut itdown "shows the outright authoritarianism and arbitrary character of the Venezuelan leader." n109 Chavez's decision to shut down RCTV also "reflectsthe ineffectiveness of the mechanisms of control which, in democratic systems, balance and [*845] rectify possible abuses on the part of the executivebranch." n110 Although approximately 70 percent of the public was against the closing of RCTV, it happened because of the voi d of any trulyindependent institutions in Venezuela. n111 In Venezuela, Chavez is impossible to escape; he is pictured on billboards, posters, and murals, where he is

seen "hugging children, embracing old women, chanting slogans, and plugging energy saving Cuban light bulbs into sockets." n1 12 The Bank of

the South seems to be both indicative of and an exacerbation of the current political climate

of Latin America. It illustrates the trend of rising nationalism and regionalism in Latin America

as well as the backlash against Washington-based lending institutions that seemed to have done little to quash poverty in Latin America. It also

demonstrates the rift that has formed in Latin America between those countries that still

support the United States and those leftist leaderswho follow Chavez. As with most of Chavez's initiatives, the Bank ofthe South would not be possible without oi l money, demonstrating the rise of resource nationalism in South America generally, but in Venezuelaparticularly giving Chavez the ability to economically dominate the South American market and thus politically dominate Venezuela.
http://www.lexisnexis.com.turing.library.northwestern.edu/hottopics/lnacademic/?verb=sr&csi=173459http://www.lexisnexis.com.turing.library.northwestern.edu/hottopics/lnacademic/?verb=sr&csi=173459


35/41

AT: BOS CPCant SolveInstability TurnThe CP results in a regional divide that prevents solvencycauses a power struggle between

Brazil and Venezuela

(Germain 08 S G J S Does the Bank of the South Really

Sg? Lw B Rw F 2008In Latin America, there has been a gradual division into pro-and anti-Chavez nations, and thesedivisions also mirror differing attitudes concerning Washington, Chavez's nemesis. n68 "Many officials voice concerns that creation

ofthe bank willserve to highlight, if not exacerbate, the growing ideological divisions in the regionbetween left-leaning and more conservative governments, and between those with cool and those with warm relations withWashington." n69 These regional divisions have risen as a result of "the radicalization of Venezuela and the growth of an anti-American camp - backed since last year by elections in Bolivia, Ecuador and Nicaragua." n70 It may not be that clear-cut. But

imperial overreach by the Bush Administration, and the Iraq debacle, have created a power vacuum that Chavez ... is exploiting.[Chavez], who seems to fancy himself as Castro's successor, has big plans, casting himself as a populist leader of a revolution, that,fuelled by petro-dollars, will make Venezuela the linchpin of a rejuvenated continent with elected left-governments in Brazil, Bolivia,Chile, Ecuador, and Argentina. n71 The United States has made an effort to counter Chavez's aggressive grab for regional

influence by promoting "a year of engagement with Latin America... but many wonder if it is too little too late." n72"The

diverging views of the project point to thecontrasts between Brazil's president, Luiz de Silva, a longtime socialistwho embraced market-friendly policies once in power... and Mr. Chavez, who favors a more assertive role for Venezuela's

government in guiding economic policy here and elsewhere in the region." n73 Brazil and Venezuela have differing ideasabout the proposed Bank of the South. n74 The location of the Bank's headquarters is one such example. n75 Brazilwould like the headquarters to be located in a neutral country, instead of the Venezuelan strong holds of Caracas and Buenos Aires.

n76 Additionally, their views on the role of the bank differ; Chavez's wants the Bank to replace the IMF and WorldBank by usurping its role in the region and financing infrastructure projects. n77 Alternatively, Brazil sees it purely as a development

bank. n78[*842] The debate over the Bank is evidence of a larger power struggle between Brazil

and Venezuela.n79 And while Brazil's President maintains a good relationship with President Bush, he also maintains a closerelationship with Mr. Chavez. n80 Recently, though, Brazil has begun to distance itself from Venezuela on several key issues. n81 InMarch, Brazil's c

Bank of the South CP - Northwestern 2013 6WeekSeniors

Documents