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NDI 2013 6WS Bank of the South Counterplan

***Bank of the South CP***

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

L k g I

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 should attend to all the mentioned objectives. If Banco del Sur is only to operate as a regional development bank, only objectives 5 and 6 can 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 could fulfill all the objectives listed in Table 1. In Marshall and Rochon (2010), we expand 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 currency in domestic transactions. Yet under a regime of capital controls,
on the framework established in the Quito Declaration (CADTM 2008) and propose a bank that would be national currencies would not be convertible with any currency except for the regional cur- rency, 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 the
rest of the world would not differ tremendously from a typical modern central bank, managing the price of the regional currency in relation to currencies outside the region. Banco del Sur would therefore operate under a similar scheme as that proposed by Keynes at 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.
proposal It would

also 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

varies 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 envisioned
as an institution completely independent and apart from the entities that govern the banking systems of its member countries. As will be argued, this ones, could

vision excludes the relevant supports that national banks, in particular publicly owned offer to the regional bank in 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.

BOS CPNeolib Net BenefitCP solves


Counterplan solves neoliberalism-The Bank of the South is a critical turning point for mobilizing more effective activism against neoliberalism (Hart-Landsberg 09, Martin Hart-L b g P L w k g L g LB B k
S

w 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 movements throughout 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 privatized
economic 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

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 growth is 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 thrown
their efforts at enhancing the capacities of their respective states in an attempt to recreate East Asian economic successes. However, these economies into their own downward economic spiral. P the governments of a number of South American countries are working to advance w b g ( b -market and state-directed forms) has weakened,

new regional initiatives that have the potential to promote and strengthen socialist-inspired development alternativesthe most significant are 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 of
alternatives 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 neoliberalism by redefining the role of emerging markets
( , Pedro Paez, Plenipotentiary Ambassador for the Ecuadorian Government on the New International Financial Architecture and Chair of the Ecuadorian Presidential Technical Commission for the design of Banco S F g beyond the crisis creating an innovative O b 2011 http://www.tni.org/sites/www.tni.org/files/PedroPaezInterview-en-final.pdf) The second vector is related to the transformation of the relationship between the financial and the productive spheres in order to

Paez 11

production 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 the capitalist system in recent decades has demonstrated that the financial sector has
recover the coherence between hijacked the process of accumulation, separating it from the productive process through financial instruments and innovation,

which rather than 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 being assimilated into this logic by the forces and conditions of the market. The structural crisis of capitalism as a way of production and life, can only be overcome from a logic that puts the life of the people first, which is to say human labour, and which recognizes another type of productive logic, another type of distribution mechanisms and a structure of incentives that give rise to processes which, 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

economies as a periphery in the international division of labour. This is

built on a foundation 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 labour that is now outdated. In fact, one of the clearest
expressions 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.

BOS CPSolvencyEconomy
Only 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: An
Alternative to IMF and World Bank Dominance, Centre for Research on Globalization, http://www.globalresearch.ca/the-bank-ofthe-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


w b k

Americans more credits

I b

It also aims to increase liquidity and revive socioeconomic development and infrastructure investments in participating countries and keep them outside the
restrictive control of the IMF and World Bank that are fast losing influence and being phased out of the region. In 2005, 80% of I F $81 b w L T 1% w $17 b g T k 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 w g H I F debt, suspended World Bank loans, accused the WB of trying to extort money from him when he was economy and finance minister 2005 B k 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 proj H : There g b b g g ation

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. H g z b g I F B k I -American
Development 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. N b J S g z g z z B S O b 10 H One of the advantages of having a Bank of the South is that it would reflect the perspectives of those in the South (while in I F B k ) ( g and praised his redistributive social policies. He also cr ( ) b ) z g g Stiglitz met with Hugo Chavez on his visit b x g q g g get as

acting ambassador to the Permanent Mission to the UN, Aura Mahuampi Rodriguez de Ortiz, warned the world body about Latin American debt during 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 g g 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 begin
gb w g w g ncial reso Venezuela, Cuba, Bolivia and Nicaragua. Chavez first proposed ALBA as an alternative to the Free Trade of the Americas (FTAA) in 2001 with Venezuela, Cuba and Bolivia its original members in December, 2004. Nicaragua then joined the alliance in January, 2007 under its newly elected president, Daniel Ortega, who signed on as his first act in offi LB g 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, the 5th 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

t the expense of the region and its people. Venezuelas

strengthen key economic sectors in areas of energy, agriculture, telecommunications, infrastructure, industrial supplies and cement production. 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 Prospects Socially

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 w g 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 neoliberal g F 1960 1980 g g w 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-rich and 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 b g 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 has an ally in Ecuador under Raphael w g H w b drafted in the next six months and then put to a national referendum next year. Other Bank of the South founding countries like Brazil, Argentina and Bolivia, however, claim to be center-left but, in fact, embrace 1990s neoliberalism, and financial autonomy

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
w g 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 b k g w k g (b g) g T

every step forward means more power to the people and

another possible world. The CP is the key part of economic integration (Ogloblina 09last cited reference from 2009, Elizaveta V. Ogloblina, assistant professor of International Banking and Finance
at the Finance University of the Government of the Russian Federation R g 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 the new 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. The
aspiration of the Bank is to direct the economic activity toward the real sector, to develop industrial capacities and transport infrastructure, that will allow to co-ordinate the economic growth with the social development. Indeed, the success in the realization 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 all possible scenarios for economic decline (Marshall 11 B S

L k g I

rnational Journal of Political Economy, 2011)

South America finds itself in an enviable and unique ly increase productive investment and promote internal savings, and by doing so slowing capital flight, a credit policy directed toward the strengthening of publicly owned companies and small and medium enterprises (SMEs) is essential. These two
types 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 development in favor of chan- neling resources to other countries. Beyond their incentives, the mere ability to export capital is much more limited in these types of companies. Unlike the MNC,

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. A
key 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 political regimes 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 of
political repercussions in local politics.5 At the same time, a strong SME presence offers diversity to an economy. Even though

SMEs do 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 corporations that 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 tend to complicate their financing, Argentinean publicly owned banks maintain a strong leader- ship in the channeling of resources toward this 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 b k g S g g g 16 S b k g k (B x 2009) L k w k g 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 bil- lion (SHCP 2009).

Cp solves the sustainability of the Latin American economies (Marshall 11


B
economy. The

J P 2011)

L k g I

The transformation in the composition of local economies was accompanied by the elimination of all filters between national economies and the global

Washington consensus, which inspired the policy of financial opening and the subsequent g b k w g x g b z stent and growing dollarization of the region, thereby creating a double monetary circuit in which much of investment in local currencies is converted into
dollars and saved or invested abroad, and in which the expected strength of the dollar has become one of the most important references 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 to banking crises in the region during the
Washington 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 conglomerates working 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 degrees
in 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 financing with 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, particularly
state-owned ones, and the recuperation of national banking systems.

Bank of the South is keyglobal institutions increase the risk of economic decline (Jackson 08 V J k N S T P S T I F L
S x g V z 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 (Economist 2008). 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 his government 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 B k T w w b V z P H g z T w g is not, I insist, anti-globalization but globalization with a conscience -for human development, equity and democracy; globalization b ' b Hugo 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. Conclusions In the quantitative methods of my study 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 globalization
varying 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 President 79 Hugo Chavez seems the most effective approach. I would also hypothesize regional
unification across the globe would be most effective.

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
of the South: T w F financial-autonomy) 10 J 2007 :// w w g/ / B k -archives-60/805-bank-of-the-south-toward-

In some ways, the Bank

of the South forms part of the process of distancing their economies from neoliberal economic policy that has characterized many of the countries in the region 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 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 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 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 integration
that 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 term infrastructure 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 as opposed to exporting it to markets in 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 corporations have 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 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.

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
of the South: Tow F financial-autonomy) 10 J 2007 :// w w g/ /

B k -archives-60/805-bank-of-the-south-toward-

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 placed in northern banks at interest rates below what we are charged when they lend to us," the document states6. In short, the new bank offers 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 part of the process of distancing their economies from neoliberal economic policy that has characterized many of the countries in the region 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 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 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 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 integration that 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 term
infrastructure 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 as opposed to exporting it to markets in 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 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 itself but 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.

BOS CPSolvencyStability/Democracy
BoS 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
P NI F L b 2009 g 259-261) P b P L America after the Neoliberal Debacle: Another Region is

The Bank of the South needs to be considered from a geopolitical point of view as a strategy for recovering sovereignty. It seeks to form new contractual arrangements that can overcome the kinds of market dynamics
b b T - cial architecture of the region and stands to give the region greater bargaining power when negotiating with the United States and Europe. By the time of its initial formation at the end of June 2007, the participant countries of the Bank of the South included Argentina. Brazil, Bolivia. Ecuador, Paraguay, Uruguay, and Venezuela. Surinam and Guyana have also joined. On the other hand, Chile, Colombia, and Peru resisted the idea be- cause it would pay lower interest rates on capital when compared to other international options. (Chile, nevertheless, participates as an observer.) T " b demarcate which countries prefer to privilege their status as " States at the expense of greater regional sovereignty. Although Brazil ultimately agreed to join, it backed away from the magnitude of investment initially con T w gg w Brazilian government over its international conduct. Nevertheless, Optimists like President Rafael Correa of Ecuador think that the

Bank of the South

Latin American Central Bank. He argues that it should carefully closer to the logic of cooperation and development. He also recalled that "the nancial logic privileging the interests of speculative capit al has failed in 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 nancial logic and with the nal objective of regional integration as the 'patria grtmde"' (Ramos, 2007). The lack of a popular character in the integrationist policies of Brazil distance itself from the logic of markets and draw became once more evident in the case of the founding of the Bank of the South. lt became apparent that the project as seen by Brazil did not intend to respond to any sort of emancipatory agenda, but rather to its interests of g g affairs (Buela. 2007). Brazil remained stead- fastly focused on cultivating its image as one ofthe emerging international points of reference and a worthy Latin American partner for participation in the transnational dominated global economy. Brazil's resistance to fully participate in the Bank of the South until its novel edges were smoothed out was among other things symbolized by its intention to force the incipient (0 g I I g of Regional infrastructure in South America (IIRSA) infrastructure project (Zibechi, 2007b; Ugarteche, 2007). This attempt to ensure the future of IIRSA, largely rejected by other b b b and collateral negative impacts on the region, via linkage to the Bank of the South would guarantee that the Banco Nacional de Desarrollo Economico y Social de Brasil (BANDES; National Social and Economic De- velopment Bank) continued being the principal development bank in the region. On the other hand, Eric loussaint, president ofthe Belgium-based Committee for the Cancellation ofthe'|'hird World Debt [CAIJTM] argues for the necessity to prevent the Bank of the South from becoming trans- formed into another World Bank whose objective would be to support transnational capital in place of improving the quality of life of the re- gion's excluded majority. ln a surprising twist, Colombian President Alvaro Uribe decided to support the Bank of the South once it became clear that his efforts to win * w S w g g all in the U.S. Congress. Even at the launching of the bank, full agreement was still lacking with respect to the initial allotments of capital and the overall guidelines for member contributions. ln the end, this resulted in a much smaller 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 the regions social movements. In an open letter to the presidents of the Bank of the South member countries. a number of civil society organizations acknowledge its potential role but demanded that democratic procedures for popular participation be incorporated We believe that the Bank of the South must be part of
a unitary regional response. together with the founding of a South stabilization fund, a common regional currency, the undertaking of audits ofi nternal and external debt claims, and the non-payment of those debts illegitimately demanded of our countries. A response

that contributes to cutting the ties of dependency with uncertain and highly speculative global capital markets, enabling the region to channel its own savings power, stop
g w social and economic needs of the people. 'The debate on the implementation of an autonomous South-South bank is of utmost importance, and for that reason we support the demand of many organizations and movements in the region, that national and regional instances be created immediately in order to insure the 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 deni- tions regarding its resources, obiectives, organization, regulations, decision- making, management, and operations, in such a way that: ) I g b the region's own development with sovereignty and in solidarity. Development dened as the unfolding of the attributes, resources, and poten- tial of persons, communities and peoples; a process that cannot take place

without their being the principal protagonists. 2) it

constitutes its capital and management structure in an egalitarian way among the member countries. 3) It clearly defines that credit allocations will be for the strengthening of the public and social sector; giving priority to the redistribution of wealth and to environmental protection; contributing to the overcoming of existing asymmetries; w their economic. social, cultural, and environmental rights and for their g w -determination. For this reason we propose that the South Bank direct its nancing to socially and envi- ronmentally sustainable projects and do not use them to fund IIRSA and other 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 and control, establishing that the bank's officials and employees will have no personal immunity or scal privileges, that the rendering of accounts will he made known and put to the
consideration of Parliaments and of civil society, and that all information shall be considered public. We believe that all of the b k gw S Q May 3rd, 2007, where : T g g ernments a mandate to provide the region with new instruments of integration. For development that must be based on democratic, transparent, and participatory schemes that are responsible to their constituencies."

BOS CPSolvencyInfrastructure
CP has the capacity to invest in infrastructurekey priority
( , Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of the S G P R N FI T T International Financial Regime:T B k S R L x b gF O b 2010 :// xeuropa.info/publications/articles/bank_of_the_south/)

Perez 10

The Banco del Sur is closely tied to another Latin American organization, the Union of South American Nations (UNASUR or
UNASUL), founded in 2008. Slightly oversimplified, one could say that Banco del Sur is the in-house bank of UNASUR. It is possible to identify three goals for the Banco del Sur: regional integration under the new notion of supranational sovereignty reduction of asymmetries within and between the South American countries, and financing an alternative development The new major

development priorities agreed by the seven presidents are: food sovereignty health sovereignty energy
sovereignty, and sovereignty in knowledge production financing adequate to the popular economy deployment of physical infrastructure with continental projections That 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, including those in education, the health system and sewage systems more 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. 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 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 the most 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 possible too: 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, mobilizing also peasant and indigenous productions, stabilizing crops prices, an adequate system of post-harvest management, etc. Here, the

Banco del Sur could help strengthen the material foundations infrastructure is a further goal to facilitate the massive exchange of goods, and people, for instance, with a network of railroads for the whole continent. All those projects will install
for regional cooperation. The expansion of the transport science and technology at the core of the Latin American integration process.

BOS CPSolvencyHealth System/Disease Prevention


CP solves health investmentskey priority
( , Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of the S G P R N FI T T International Financial Regime:T B k S R L x b gF O b 2010 :// xeuropa.info/publications/articles/bank_of_the_south/)

Perez 10

The Banco del Sur is closely tied to another Latin American organization, the Union of South American Nations (UNASUR or
UNASUL), founded in 2008. Slightly oversimplified, one could say that Banco del Sur is the in-house bank of UNASUR. It is possible to identify three goals for the Banco del Sur: regional integration under the new notion of supranational sovereignty reduction of asymmetries within and between the South American countries, and financing an alternative development The new major

development priorities agreed by the seven presidents are: food sovereignty health sovereignty energy
sovereignty, and sovereignty in knowledge production financing adequate to the popular economy deployment of physical infrastructure with continental projections That 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, including those in education, the health system and sewage systems more 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.

BOS CPSolvencyEducation
Counterplan solves education investmentskey priority
( , Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of the S G P R N FI The Transformation of the I F R g :T B k S R L x b gF O b 2010 :// xeuropa.info/publications/articles/bank_of_the_south/)

Perez 10

The Banco del Sur is closely tied to another Latin American organization, the Union of South American Nations (UNASUR or
UNASUL), founded in 2008. Slightly oversimplified, one could say that Banco del Sur is the in-house bank of UNASUR. It is possible to identify three goals for the Banco del Sur: regional integration under the new notion of supranational sovereignty reduction of asymmetries within and between the South American countries, and financing an alternative development The new major

development priorities agreed by the seven presidents are: food sovereignty health sovereignty energy sovereignty, and sovereignty in knowledge production financing adequate to the popular economy
deployment of physical infrastructure with continental projections That 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, including those in education, the health system and sewage systems more 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.

BOS CPSolvencyAgriculture
Counterplan solves food production and priceslocal investments are sustainable
( , Pedro Pez Perez, President of the Ecuadorian Presidential Technical Commission for the design of the Bank of the South and the Government Plenipotenti R N FI T T I F R g :T B k S R L x b gF O b 2010 :// xeuropa.info/publications/articles/bank_of_the_south/)

Perez 10

The Banco del Sur is closely tied to another Latin American organization, the Union of South American Nations (UNASUR or
UNASUL), founded in 2008. Slightly oversimplified, one could say that Banco del Sur is the in-house bank of UNASUR. It is possible to identify three goals for the Banco del Sur: regional integration under the new notion of supranational sovereignty reduction of asymmetries within and between the South American countries, and financing an alternative development The new major

development priorities agreed by the seven presidents are: food sovereignty health sovereignty energy
sovereignty, and sovereignty in knowledge production financing adequate to the popular economy deployment of physical infrastructure with continental projections That 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, including those in education, the health system and sewage systems more 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. 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 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 the most 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 possible too: 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, mobilizing also peasant and indigenous productions, stabilizing crops prices, an adequate system of post-harvest management, etc.

BOS CPSolvency-- Currency Swaps


Bank of the South nations can do currency swapsthe CP solves
( , Ilene Grabel, Professor of International Economics, Josef Korbel School of International Studies at the University of Denver , T R b g P I P R I 2013 http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP318.pdf)

Grabel 13

The re-emergence of more populist governments in Latin America and the success of large commodity exporters in the region have stimulated growth of regional, subregional, bilateral, and unilateral initiatives. One such initiative is the Latin American Reserve Fund (FLAR). Like CMIM, FLAR is a regional reserve pooling
arrangement; its capitalization and the modalities by which it provides financial support to distressed countries has broadened considerably during the current crisis. Another Latin American institution, the Latin American Development Bank, has taken on an increasingly active and important role in the region during the crisis. Latin

America is also home to two new (and

related) initiatives that bear mentionthe Bank of the South and the Bolivarian Alliance for the Peoples of Our Americas. In 2012 the BRICS countries (namely, Brazil, Russia, India, China and South Africa) began discussions about the creation of a new development bank, a credit rating agency and a reserve pooling arrangement. Preliminary proposals for operationalizing these institutions and arrangements are to be discussed at the BRICS Summit in South Africa in March 2013. There are also a variety of bilateral initiatives

among developing countries, especially involving currency swaps and mechanisms using the US dollar as the vehicle currency (e.g., between Brazil and Argentina, and more broadly among a group of twelve Latin American nations). During the current crisis
aimed at settling trade transactions without b k ( B z N B k have also become active lenders outside their borders and regions. S B k)

Bank of the South currency keeps interest rates lowsolves aff internals
( wb S ) P P z g , Macroeconomics, Sustainable Development and Public F S G R I F ? P 7/1/11, http://www.politicalaffairs.net/should-we-get-rid-of-the-international-monetary-fund/) S P Pedro Paez: Every

Paez 11

P z( B k P

action of the IMF, especially in the third world, has been an obstacle to development. Latin America has had a number of bad experiences. Adjustment and austerity policies generated a chronic fiscal crisis. Other options are possible, linked to the formation of a sovereign credit system and the reinforcement of the national currency. Here in Latin America, we have developed a new
architecture for finance and development: the Bank of the South [Banco del Sur], based not only on key currencies, but on local

The architecture of this new bank is the SUCRE: Unitary System of Regional Compensation, a common currency operating outside of the neoliberal restrictions of the euro as a savings mechanism for international monies. The Sucre, a kind of mutual credit card among national banks, simplifies exchanges and avoids the use of the dollar. In this way, we no longer have to play with interest rates, and each country has greater space to manage exchange, finance, and commercial policies. Keeping the interest rate low will reduce debt servicing charges for families, businesses, and the State, thus liberating resources for investment in the common welfare. Moreover, those resources will be protected from the attacks of speculators and the fragilities of the international market, so we
resources and national (and soon, regional) currencies. can use them for jobs and development programs.

BOS CPSolvency--AT: Corruption


Reform avoids corruption holds banks accountable through regulation (Marshall 09
Under this scheme, the F g L :T B k S 2009 http://desire2learn.laurentienne.ca/NR/rdonlyres/BE069B08-80B5-4AFB-BBDC-2FAD57083546/0/Wesley.pdf)

regional development bank would have the less complicated operational structure, and

would act solely as a center for the distribution of pooled regional funds and as a regulator for national development banks that receive the funds. Member countries would agree on specific criteria for which regional funds could be used, 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 alloted a greater amount of funds than it contributes. Intraregional infrastructure projects would also be funded in this fashion, with each national 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), already 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 that
governmen k g b k 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 receive their funds, which would state that only a certain, although ample, range of productive endeavors would be eligible for funding. In addition, the regional 7 development bank would also be charged with
the task of supervising national banks, ensuring that received funds are used for their stated purposes in a efficient manner.

BOS CPSolvencyAT: Competitiveness


No risk of 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

L k g I

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 negoti- ated among member countries and implemented on a national level. Such
banking standards, akin to a Basel-type accord, would attempt to minimize well-known and historically reproduced credit risks that have often led to endogenous banking crises. As the possibility of having foreign agents (in this case those of countries within the region) regulate national banking sectors would likely be unpalatable to many, the role of the regional central bank should be limited to the training of regulatory personnel and the exercising of moral suasion over national regulators when imbalances in national banking 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 of activities 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 strengthened in all senses; the only difference would be that they would operate under a distinct organizational logic. Unlike
b k 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.

BOS CPSolvencyAT: Delays


Reforms solve delaygreater coordination (Ortiz & Ugarteche 08, Isabel Ortiz, Director Global Social Justice Program Initiative for Policy Dialogue at Columbia
University, Oscar Ugarteche , Institute of Economic Research at the National Autonomous University of Mexico, B k P g g N b 15 2008 :// / 3/ ? b _ =1353450) S :

It is fundamental to overcome 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 entails three 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. South
America is not alone in this attempt to change the international financial architecture from a regional perspective. The tough reality that 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 the reverse: 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 all
embarking on processes similar 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 market has only served for public bonds and has not yet started to issue private bonds. The process of designing a basket of currencies in the 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 circulating w g T L B k 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 crisis in the United States is turning into an international crisis. Problems with the Work ing Method to Create the Bank of the South To date, the B k

decision-making system consists of (1) setting up Ministerial Summits, which are followed by (2) meetings of experts from the National Technical Commissions who implement the decisions taken 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 Summit
S has followed since, on June 27 in Buenos Aires, and it was called with such little notice that only four ministers could attend. As a result, 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 .

BOS CPSolvencyAT: Funding


Bank of the South has access to 20 billion

(Kilpatrick 10, Alejandro Kilpatrick, Programme Coordinator, Latin America and the Caribbean and the Climate Change
F P g S g g g :B S http://globalmechanism.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 bank business and promote innovative approaches to tackling today's development challenges. Banco del Sur sees development as an issue of sovereignty and has made achieving regional sovereignty in terms of food, energy, healthcare and natural resources its ultimate 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 development of 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 the framework 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. Nonlending 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 L I N T B k S b 5/18/07, 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 six countries 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 contributed
by 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 billion deposited 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 seek
out 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 b g 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 ten tim w 2005 w gw P

No disads--- more funding would emerge from consolidation of regional banks into one financing authority
( I b O z N w South-S International Development Economics Associates, January 2008) In 2007 and early 2008, countries from MERCOSUR Bank, intend

Ortiz 08

R g

and ALBA associated 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

that Banco del SurALBA become an instrument of South-South solidarity and fair development. This alternative to the IFIs is expected to be combined with either a Fund of the South or a revamped 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 both
Banco 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 capitalamounts to over 35 billion

(SiBCI 6/12 B k S N wI 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 of
the 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 billion dollars and its capital is 10 billion dollars, with initial g g ement, endorsed in September 2009.

for its Bank of the Souths operation adds up to 20 capital of 7 billion dollar per partner, stipulates the

BOS CPSolvency--AT: Instability


Counterplan is key to the integration of the regionno risk of instability
( , Roberto Mallen, COHA Research Associate , B NK OF TH SO TH: NOTH R ST P TO R L TIN RI N INT GR TION H b 7 2007 ://www g/b k-of-the-south-another-step-towardlatin-american-integration/)

Mallen 07

Integration has been a recurrent theme on Chvezs political agenda


negotiated with various Latin American countries, as well as his

g k b more regional-centric ALBA (Bolivarian Alternative for the Americas) which is given reality by the oil concessions Venezuela has

most recent proposal for a development bank for South America, which has been given the working 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 financial
bolstering, as well as helping to allow for a new-found autonomy. It appears that for the first time in its history, the region actually will 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 seven
South 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.

BOS CP--AT: Squo SolvesOther Banks


Other banks reinforce the Washington consensusonly reforming the Banco del Sur solves
( , Pedro Paez, Plenipotentiary Ambassador for the Ecuadorian Government on the New International Financial Architectu P T g B S F g beyond the crisis creating an innovative O b 2011 http://www.tni.org/sites/www.tni.org/files/PedroPaezInterview-en-final.pdf)

Paez 11

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 number of these development banks were linked to the industrialization through 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 InterAmerican
Development 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 making speculative

investments in the United States? Without a doubt, there will be justifications related to treasury management and other questions, but this only demonstrates the de-naturalization of these types of banks. The same could be said about the Latin American Development Bank or CAF and the IDB itself in creating loans that have names like Combat Poverty but in reality are in fact loans to finance consultations on poverty which tend to be linked to a short list of consultants who basically reproduce the vision and the concepts of the Washington consensus regarding these problems. In this way, the perspective of the development banks as investment banks on priority
issues for regional development such as the construction of infrastructure for example, have been abandoned and in their place these development institutions are converted into regional instruments that also represent the old international financial architecture.

***AFF Answers***

AT: BOS CP--Cant SolveCorruption


CP would avoid anti-money laundering policiesresults in large-scale corruption. Regulations dont solve. (Orsak & Valero 08, Brian Orsak, managing editor of ComplianceAdvantage.com and g news division since 2008, and a reporter for the company since March 2007 V F Y S b k g L k g 01 2007 ://www w 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 expresident Antonio de la Rua, who was named president of Mercosur b Even if the organization adopts FATFs AML 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 b k anti-money laundering policies are in no way a priority for Chvez w
about the antig b k Whatever the concerns over Banco S g g z L TF b g L k an economist at Carnegie Mellon University and the Washington, D.C.-based think tank, the American Enterprise Institute for Public Policy Research.

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


( P g B S S F S T gR g R k P g O b 26 2007 :// sis.net/2007/10/26/banco-del-sur-is-a-slush-fund-for-sponsors-ofterror-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 investment bank, Banco

Camargo 07

no legitimate bank charter and no intentions whatsoever to perform as a developmentdel Sur should be denounced on 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 is however is a composite of the worst forms of undemocratic acts of repressive economic fascism with a singular focus to bribe and 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 full
powers act, sometimes called constituent constitutional assemblies. In return for a 30 hour work week at full pay, Chavez promises to 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 for George 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 weaken the 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 and wide now. Read what Insulza says about Chavez's new fascist governmental plans here. Ignoring the Catholic church, human rights 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't restricting 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 constitutional installations now dividing South America in to two regions: one with Chavez already, bought and sold and the other struggling with the 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 eliminating the parties in opposition.'" Insulza is a liar. He was never more than a useful Chilean functionary for his socialist president, third rate at that. Today his ruinous approach to democracy is paving the way to hell for Latin America. Insulza knows very well that Chavez

permits so called opposition in Venezuela for window dressing- in name only- function. There is not one meaningful voice permitted in 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 constantly ranging 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 to maintain 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 first thing about a bank- any bank- is integrity and reporting 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.
called a bank. It is not a bank and it is not legitimate. The

AT: BOS CPCant SolveBacklash


The counterplan causes regional backlash and political divisions that turn instability
( S G J S B k S g ? L w B R w F 2008 http://www.lexisnexis.com.turing.library.northwestern.edu/hottopics/lnacademic/?verb=sr&csi=173459)
On taking office for a third term, Mr. Chavez

Germain 08

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' could potentially 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 the
economic environment deteriorates. That said, a cohesive opposition leadership is not currently in sight. n107 Recently, Chavez refused to renew the license of Radio Caracas Television (RCTV), the country's most influential television station, because the station has been openly hostile toward President Chavez. n108 RCTV supported the coup against Chavez in 2002 and it refused to bend to government directives, Chavez's decision to shut it down "shows the outright authoritarianism and arbitrary character of the Venezuelan leader." n109 Chavez's decision to shut down RCTV also "reflects the ineffectiveness of the mechanisms of control which, in democratic systems, balance and [*845] rectify possible abuses on the part of the executive branch." n110 Although approximately 70 percent of the public was against the closing of RCTV, it happened because of the void of any truly independent 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." n112 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 leaders who follow Chavez. As with most of Chavez's initiatives, the Bank of
the South would not be possible without oil money, demonstrating the rise of resource nationalism in South America generally, but in Venezuela particularly giving Chavez the ability to economically dominate the South American market and thus politically dominate Venezuela.

AT: BOS CPCant SolveInstability Turn


The CP results in a regional divide that prevents solvencycauses a power struggle between Brazil and Venezuela
( Sg

Germain 08
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2008

Does the Bank of the South Really

In Latin America, there has been a gradual division into pro-and anti-Chavez nations, and these
divisions also mirror differing attitudes concerning Washington, Chavez's nemesis. n68 "Many officials voice concerns that creation of the bank will serve to highlight, if not exacerbate, the growing ideological divisions in the region between left-leaning and more conservative governments, and between those with cool and those with warm relations with Washington." n69 These regional divisions have risen as a result of "the radicalization of Venezuela and the growth of an antiAmerican 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 the contrasts between Brazil's president, Luiz de Silva, a longtime socialist
who 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

ideas about the proposed Bank of the South. n74 The location of the Bank's headquarters is one such example. n75 Brazil
would 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 World Bank 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 close
relationship with Mr. Chavez. n80 Recently, though, Brazil has begun to distance itself from Venezuela on several key issues. n81 In March, Brazil's communications minister made a comparison between Venezuela's state run television system and Cuba's. n82 This is the closest Brazil has come to publicly recognizing and criticizing the apparent anti-democratic drift of Mr. Chavez's Presidency. n83 Brazil has also rebuked Bolivia's treatment of Petrobras, Brazil's state owned energy firm. n84 Last year, Bolivia's president "nationalized" oil and gas, an idea backed by Mr. Chavez, which forced Petrobras to accept harsh new terms for its Bolivian operations. n85 Mr. Morales then issued a decree granting Bolivia's state-owned YPFB a monopoly on the sales from Petrobras's two Bolivian refineries, basically usurping their cash flow. n86 At this point, the Brazilian government spoke out against the property grab saying that it could hurt the relationship between the two countries. n87 Petrobras then issued an ultimatum that Bolivia either had to buy the two refineries for a fair price or face international arbitration. n88 Experts say that the "ostensibly

warm relations between Chavez and Lula mask an intense competition for political and economic influence ... Venezuela has used oil revenue to win allies, but Lula is employing diplomacy and his prestige as an up-from-thefactory former union leader who is now Brazil's widely respected head of state." n89 "The Brazilian president has been a strong proponent of South American integration, a vaguely defined goal that most leaders on the continent endorse in theory. But Lula has departed from Chavez's anti-U.S. vision of integration, failing to embrace, for instance the Venezuelan's plan for a 'Bank of the South.'" n90 The emergence of a pro-Chavez, anti-Washington alliance in Latin America has caused concern within the Bush administration, and as a reaction they have warmly embraced Lula as a moderate leftist and elevated him as a role model for the region. n91 The two countries recently traded visits, symbolizing efforts to expand Lula's profile in order to offset Chavez's everincreasing image. n92

That causes Latin American instabilityBrazil is on the brink of withdrawing as a regional power now
( F R w B z 1442-5-30.pdf)

come

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According to the International Monetary Fund, Brazil is the 8th

and 55% of the South American GDP (Arnson/Sotero, 2010). This , being a part of what g g w I T w ts through the joint effort conducted together with Turkey to promote an agreement between Iran and the permanent members of the UN Security Council. In this regard, the wish of becoming a permanent member in this

economic power in the world, and represents 40% of the Latin American and the Caribbean GDP, has helped Brazil to outstand as a global player

it has been remarked (Hurrel in Arnson/Sotero, 2010) that an ambiguous stance prevails concerning the assumption of regional leadership. However, it has focused
Council once its extension is approved, has been present within the last years. However,

in un- dertaking an important role to maintain the regional political stability, always encouraging dialog and negotiations between conflicting parties, whether within the domestic (Bolivia, Venezuela) or bilateral (Colombia, Venezuela and Ecuador) level. In the last year, there is a perception that it is rather withdrawing , that it is determined to pursue its role as a global player
without the problems typical to leadership in a conflictive region, especially in the Andean sub-region. There is the perception that both Mexico and Brazil, the major play- ers, do not wish to assume the costs of a regional leadership in this sense. It is perceived that there are increasing tensions between its roles as a global and a regional player.

Regarding this debate about the Brazilian leadership, we should ask ourselves whether its neighbors are willing to accept it. This is an especially relevant question both to Argentina and Venezuela. On the
other hand, ideological discrepancies with Colombian and Peruvian governments pose setbacks. Particularly In the case of Venezuela, as previ- ously stated, a controversial issue has been whether a competition for regional leader- ship is unfolding, in spite of the apparent good relations between both neighbors,. There have been speculations as to the fact that Venezuela, based on its energy power, pursues a Current Challenges for Disarmament and Peace Operations on the Political Agenda 87 leadership that has even been announced as a part of its international strategy. A feeling of an increasing tension between the UNASUR and the ALBA can emerge as an alternate perspective, but with an asymmetrical relation between Venezuela and the other members.

AT: BOS CPCant SolveFunding


The CP cant leverage sufficient capital for the planzero reserves available (Conger 09, LUCY CONGER, covers Latin America for publications including Institutional Investor, Emerging Markets, and
B N w T R F g P F BR RY 12 2009 http://www.foreignpolicy.com/articles/2009/02/11/the_end_of_the_revolution)

Even before trouble hit the oil market, Chavez was having problems turning his dream of a unified Latin America into reality. His main regional initiative, the Bolivarian Alternative for the Americas (ALBA), was intended to obstruct the U.S.-promoted Free Trade Area of the Americas. To put teeth into ALBA, Chavez launched the Banco del Sur, a regional bank signed into existence in December 2007 by founding members Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay, and Venezuela. Banco del Sur hoped to raise between $7 billion and $10 billion that would be used to capitalize loans for social programs and for an interlocking grid of highways, bridges, waterways, ports, and power lines. But Banco del Sur still does not have any paid-in capital, nor has it named officers or staff. And it is not yet engaged in development funding. Early on, Brazilian officials obstructed Chavez's hopes for tapping neighboring countries' international reserves to capitalize the bank by saying their reserves were off-limits. Venezuela has signaled it would put up 70 percent to 80 percent of the bank's capital, but hasn't yet delivered. Venezuela's failure to come up with the cash could have long-term diplomatic consequences.
Venezuela's good relations with other Latin American countries are largely based on Chavez's largesse -- generous donations of oil and aid, and indirect assistance in aircraft, vehicles, and personnel. No one knows how much has been spent on oil diplomacy. The biggest ticket item -- donations of crude oil and derivatives to Cuba topping 94,000 barrels a day -- was valued at $3 billion in 2008, according to some estimates. In Bolivia, where U.S. aid now totals $125 million annually, Venezuela is expected to exceed U.S. assistance levels. But Chavez's lavish promises to create or upgrade refining capacity in five countries (Brazil, Cuba, Jamaica, Nicaragua, and Vietnam) have only been fulfilled so far in one country -- Cuba.

The Bank of the South couldnt sustainably solvenot competitive


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The Venezuelan government has said the new poverty-fighting bank will have starting capital of around $7 billion. The governments involved haven't yet determined how they'll divide contributions to the bank or whether it will turn to capital markets to increase its lending power. The bank will struggle to compete with existing regional development funds should it fail to secure a strong credit rating, analysts said. This
year, the Inter-American Development Bank, based in Washington, is on course to lend around $8 billion, according to the Bank Information Center, a Washington-based research organization that monitors international lenders. ``Their

capital will quickly disappear if they do not leverage their funds like other banks,'' said Vince McElhinny, a Latin
American analyst at the Bank Information Center. Countries joining the Bank of the South include Brazil, Latin America's biggest economy, as well as Argentina, Ecuador, Bolivia, Paraguay and Uruguay. Chile, the country with the region's highest credit, has declined to join. Credit Ratings None

of the bank's supporters have an investment grade credit rating. Both the World Bank and Inter-American Development Bank enjoy AAA credit ratings because of the backing of the U.S. The Corporacion Andina de Fomento has an A+ credit rating from Standard & Poor's. The rating of any new multilateral lender would also hinge on the commitment of its member countries, said John Chambers, managing director of sovereign ratings at Standard & Poor's. ``It's important that the member countries provide strong backing for the institution and that they support its priorities,'' Chambers said. The Bank of the South could be unsettled by disagreements about its role among its leading members. Chavez,
who called President George W. Bush ``the devil'' in a speech last year at the United Nations, is followed in his anti-American stance by only Ecuador and Bolivia.

Cant solve large scale developmentsminimal capital


(Lawrence 07, Joyce Lawrence, a PhD candidate in political economy and international relations at the Massachusetts Institute of T g g IR/PS w k L g m:

initial impact of Banco del Sur will be small compared to the IMF or World Bank. The six countries currently involved hold international reserves of $164 billion, but the total contribution to the fund is expected
Venezuela's P B S

6/11/7 http://irps.ucsd.edu/assets/015/6797.pdf) The

to be $7 billion. The total funds will be $2 billion more than these countries currently contribute to the IDB, but still substantially smaller than the $100 billion in operating capital of the IDB. The ability for Banco del Sur to act both as a development lender and as a support mechanism for balance of payments crises is questionable given the limited funds. Were a severe financial crisis to hit Latin America, countries would almost certainly look to the IMF . While the scale of Banco del Sur is not large, it symbolizes the desire for an
alternative to current IFIs and more regional financial cooperation. More than just another source of financing, which is already plentiful, Banco del Sur looks like a political project to increase the anti-imperialist credentials of Chavez. As such, it should be viewed as an attempt to draw Latin American countries away from the U.S. politically rather than simply another development project.

AT: BOS CPNBCant Solve Neolib


Cant solve neoliberalismother countries wont commit to withdrawing from neoliberalist institutions
( , Joyce Lawrence, a PhD candidate in political economy and international relations at the Massachusetts Institute of Technology, graduated from IR/PS with a career track in international politics and a Latin America regional focus, :V z ' P B S 6/11/7 http://irps.ucsd.edu/assets/015/6797.pdf) Although six countries have committed to joining Banco del Sur, the details of its governance and mission, and the criteria for lending have yet to be determined. The countries held a preliminary meeting in Ecuador and have agreed to sign the first manifest in June 2007. One

Lawrence 07

of the primary issues to resolve is whether Banco del Sur will be another development lender along the lines of the regional development banks or become a crisis lender like the IMF. While Venezuela has the most extreme view of the b k w IMF, World Bank, and IDB, other countries have not committed to withdrawing from these institutions. President Lula of Brazil sees this as an opportunity to push forward with development projects in infrastructure
within Mercosur. Argentina is trying to make sure than neither Venezuela nor Brazil can dominate the group. The smaller countries are primarily interested in an alternative to financing controlled by U.S.-influenced conditionality. Energy policy is a key area that divides the members, since oil dependence helps Chavez while Brazil is a leader in biofuels. Competitive dynamics between Venezuela and Brazil may influence the organizational rules.

Other regional banks solve and crowd out the counterplan (Barrionuevo 07, Alexei Barrionuevo , American news journalist who writes the Big Deal column for the American newspaper
T N wY kT B k S b V z b g k N wY kT http://www.nytimes.com/2007/10/22/business/worldbusiness/22iht-bank.4.8001944.html) O b 22 2007 Several issues remain unresolved about how the Bank of the South would function, including how much capital each country would commit, what its lending conditions would be and whether the members would have equal voting rights. Mantega, Brazil's finance minister, said it was still unclear whether Brazil and Venezuela would enter the bank with higher capital levels. Brazil appeared to make a major concession recently, however, when Mantega said that each country would have voting rights in the bank's administrative council. Meanwhile,

development banks already based in the region, like the Corporacin Andina de Fomento in Caracas, are waiting to see how an institution more closely aligned with Chvez's political objectives will compete in granting loans. The new bank could struggle to be competitive with the Inter-American Development Bank, especially, which has investment-grade status in the international markets due to the participation of the United States and other developed nations, and thus obtains resources at relatively low cost. None of the future partners of the Bank of the
South borrow on terms readily available to rich, industrialized nations.

AT: BOS CP-- Currency SwapsCant Solve


CP mechanism requires regional currencies, a dollar-based currency swap is key (Chauvin 12, Lu g g k J B k S g g
http://www.emergingmarkets.org/Article/2997115/Bank-of-the-South-gets-more-credit.html) Pedro Paez, Ecuadors g k 3/19/12

former coordinating minister for economic policy, said the Bank of the South was an opportunity for the new financial architecture required in the region to safeguard it against future international crises. The Bank of the South is designed to maximize local currencies. It would allow countries access to a basket of local currencies to finance development without having to use the US dollar T w g b g g w

AT: BOS CP--Perm Solvency


US led multilateral development banks are shifting away from neoliberal models the permutation solves best
( , Ilene Grabel, Professor of International Economics, Josef Korbel School of International Studies at the University of Denver , T R b g P I P R I 2013 http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_301-350/WP318.pdf)
I have suggested that changing world circumstances have placed the IMF in a position of having to adjust to policy innovations by countries that no longer are under its control. 20 Certainly a new pragmatism at the institution is apparent. But there is also a

Grabel 13

deeper transformation underwayone operating at the ideational level. Today IMF staff economists and leading academic (neoclassical) economists have pulled back from fullbore advocacy of the neoliberal development model, and have even taken steps toward elaborating a theoretical and empirical case for capital controls. The rapid succession of financial crises over the past two decades may be having the effect of encouraging those economists at the IMF who have long had reservations about the neoliberal model to give voice to their concerns and to assert themselves more effectively and consistently, particularly now that views on capital
controls by academic economists are evolving rather significantly. After all, economists at the Fund are not immune to the loss of confidence of many economists in the models, theories and policy tools that have long dominated professional practice. A recent statement by the IMFs

Chief Economist, Olivier Blanchard, is instructive in this regard: We have entered a brave new world. The economic crisis has put into question many of our beliefs. We have to accept the intellectual challenge *B 2012:225+ My arguments about ideational change complement those advanced by
constructivists (as discussed briefly in the introduction to this paper). However, I do not intend in what follows to engage in process tracing. Instead, I intend to explore diverse forms of evidence of ideational change regarding capital controls in the economics profession and within many quarters of the IMF.

Permutation solvesintegrates Latin American concerns into neoliberalist institutions


( , Joyce Lawrence, a PhD candidate in political economy and international relations at the Massachusetts Institute of Technology, graduated from IR/PS with a career track in international politics and a Latin America regional focus, :V z ' P B S 6/11/7 http://irps.ucsd.edu/assets/015/6797.pdf) By either ignoring or overreacting to Chavez, the U.S. would only help his cause and alienate its neighbors in Latin America. However, full support of the bank is not realistic since its primary purpose is to undermine U.S.-supported financial institutions. Therefore, option 3 is the most realistic and beneficial for the U.S. While

Lawrence 07

the U.S. could easily sit back and wait for Banco del Sur to experience the problems that afflict any multilateral organization, it should instead take advantage of this opportunity to address at least some of the complaints of developing countries within the current institutions. The IDB could make significant improvements in transparency while allowing Latin American countries a larger voice. There will naturally continue to be conflict between borrowing and lending countries, but even some progress in incorporating the views of the borrowers could be viewed as a success. The U.S. should not support the elimination of conditionality, but showing some willingness to compromise on the strictness of the measures would be a positive sign. New
voting rules including increased votes for developing countries would also be viewed favorably, although this may involve difficult negotiations with Europe. 6 Ultimately, small steps that encourage the involvement of Latin American countries in the future direction of the IMF would help reestablish the U.S. as a partner in the region. A policy of active engagement with Latin America to address concerns about conditionality and unfairness within the IFIs is the only way to change the root cause of the antiAmericanism that Chavez has so effectively exploited.

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