The Bank of the South, a multinational funding institute is inaugurated today by seven Latin American nations to finance regional development projects. The seven participating members are Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela. Seven presidents attend the official launch: outgoing Nestor Kirchner of Argentina; Hugo Chávez from Venezuala; Luiz Inácio Lula da Silva from Brazil; Rafael Correa from Ecuador; Evo Morales from Bolivia; Tabaré Vázquez from Uruguay and Nicanor Duarte Frutos from Paraguay. If lessons from past World Bank and International Monetary Fund (IMF) failures are learned, the launch of the Bank of the South represents a strong opportunity to combat Latin American poverty, according to the international anti-poverty agency, ActionAid.
The South can lead in making the world financial system more democratic by implementing its voting system giving equal votes to member countries. “Latin American countries are breaking new ground by discarding the discredited one dollar one vote model of the World Bank and IMF in favour of equal votes for all participating countries,” says Anne Jellema, ActionAid International policy director. The Bank of the South could be also a strong tool to reduce poverty and inequalities in Latin America. “We call on the new bank to take into account the disappointing track record of big infrastructure projects funded by the World Bank and not focus heavily on financing such projects as has been announced by several member states, ActionAid points out. “Focusing on social policies would have a stronger impact for millions of poor people residing in Latin America, and would give Latin American leaders the credibility to support poverty-related policies worldwide”.