Tuesday, November 06, 2007

Support for a good South Bank

2nd Open letter on creation of South Bank

South America, November 2007


To the Presidents of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Uruguay and Venezuela


Dear Presidents,

We are addressing you for the second time to express the great expectation aroused in our peoples by the initiative to establish a South Bank. We are also encouraged by the positive response of other countries of South America who have manifested their wish to participate in the South Bank.

The signatories of this letter are social networks, organizations, and movements, labour unions, and professionals who are struggling against the scourge of illegitimate public debt and the perverse policies and practices of the existing international financial institutions and the current global trade system. We are sure that the decision to establish a South Bank can be a significant step and an opportunity not only for South America, but also for the whole of Latin America and the Caribbean and other regions of the South.

We come from a recent history of struggle against dictatorships in nearly the entire continent. This explains our determination to open and institute new spaces for participation and direct democracy. However, the non-transparent and non-participatory way in which the negotiations on the establishment of the South Bank are being carried forward, without public debate and without consultation with our societies, might indicate that we are facing something that could turn out to be more of the same.

We are convinced that a new South-South financial entity should be focused not only on overcoming the negative experiences of economic aperture - with always the same consequences of higher indebtedness and capital flight, deregulation and privatization of public patrimony and basic services suffered by the region -, but also the well-known non-democratic, non-transparent, regressive, and discredited behaviour of the multilateral organisms such as the World Bank, the CAF, the IDB, and the IMF. Our recent history has shown that the latter’s choice of economic, social, and environmental policies, imposed on our governments through conditionalities, have ended in the decapitalization and deindustrialization of the region’s economies, and have trapped these in an agro-mineral-export model that impedes their development and deepens their subordination to the economies of the North, while worsening social inequity, ecological damage, and the “eternal” financial, historical, social, cultural, and ecological debts.

Recognizing how important it is for the countries involved in the establishment of the South Bank to reach agreement on key issues related to its nature and objectives and its financial and operational structure, we think it is essential to offer the following proposals which express the aspirations of ample sectors of our countries’ societies, as manifested by the numerous social entities consulted:

1. The focus of the South Bank should be in promoting a new development framework whose essential values would be the sovereignty of our peoples over their own territory and development, the responsible self-determination of our economic, social, and environmental policies, solidarity, sustainability, and ecological justice; for the Bank economic and technological development must be conceived as a means toward the superior goal which is human and social development.

2. The action of the South Bank must be guided by concrete goals such as full and dignified employment, ensuring food, heath, and housing, universalization of basic public and free education, a redistribution of wealth overcoming inequity, including gender and ethnic inequality, reducing the emission of greenhouse gases and their effects on the continent’s population and that of the entire world.

3. The South Bank should be an integral part of a new Latin American and Caribbean financial architecture which includes a South Fund, with the functions of a continental Central Bank capable of articulating a continental-wide system of settlements with a state of the art telematics platform. It needs to be able to link policies which promote macroeconomic stability with policies for development and the reduction of structural asymmetries, in a framework conducive to the future development of a common monetary system at the service of a strategy of strengthening economic and commercial ties within the region, introducing commercial exchanges based on national currencies and working towards the establishment of a regional currency at least for intraregional exchanges. To build a space of supranational monetary and financial sovereignty demands a lot of local flexibility in order to avoid sub imperialist temptations and the triumph of monetarist orthodoxy in certain aspects, as in recent European experience.

4. The South Bank should serve to compensate the historic, social, and ecological debts of which our peoples are creditors. Its financing must be oriented towards overcoming the asymmetries, social inequities, and ecological damage perpetrated in the continent for more than five centuries.

5. The South Bank must contemplate the participation of citizen organizations and social movements, not only in the development of its initial architecture but also in its financial and operational decision-making, and in the monitoring of the use given to the funds awarded.

6. The South Bank should be managed in an egalitarian way among its member countries, instituting and respecting the egalitarian principle of “one country, one vote” at all levels of collegiate decision-making. It should seek to channel regional savings in the region.

7. Capital subscriptions of the South Bank should be proportional to the economic capacity of member countries; other sources of capitalization could include part of the international reserves and loans from member countries, common global taxes and donations. Financial resources from the present multilateral financial institutions and from states that have plundered our continent should be excluded. Such dispositions of the South Bank could allow an increase in the placing of member countries’ reserves outside the dollar and euro spheres, and encourage the return of national capitals deposited abroad.

8. The South Bank must be committed to transparency in its administration, rendering a public accounting of its functioning and activities and submitting its lending operations and internal functioning to a permanent, socially-participatory external audit.

9. For the South Bank not to become “more of the same”, its administrative quality, austerity, and efficiency must be permanently evaluated, prohibiting any kind of immunity privileges to its officials, and based on the fully transparent and timely availability of information, and the democratic and social control of its management. To avoid excessive expenditures and bureaucratic deviations, the Bank must have a compact staff that is both diversified, efficient, effective, and managerially flexible.

10. The loans of the South Bank should be for the promotion of a genuinely cooperative regional integration, based on principles such as active subsidiarity, proportionality and complementarities; the financing of public investment; assisting self-managed local development; and promoting equitable and solidarity-based commercial exchanges among family farmers, small producers, the cooperative sector, and the social solidarity economy, indigenous and traditional communities and women’s, fishermen’s, workers’, identity etc. socioeconomic organizations.

11. The South Bank must adopt as its investment priority those projects oriented towards food and energy sovereignty; the research and development of appropriate technologies for an endogenous and sustainable development of the region, including free software; the programmed and complementary production of generic medicines; the recovery of ancestral wisdom, systematized and accepted as an agroecologic science; the promotion of environmental justice; the improvement of public services; support for victims of forced displacements; promotion of communications and intraregional culture; the creation of a South University and an equivalence system for diplomas issued throughout the region; and infrastructure that is based on different logics of spatial organization as implemented by local solidarity and self-managed development communities. The bank should not reproduce the finance model of existing international financial institutions with the construction of mega-projects that damage the environment and biodiversity.

12. The South Bank must be considered an essential tool for the custody and channelling of savings, breaking the repeated cycles of exaction of national and regional efforts through manoeuvres and suspicious deals with indebtedness and public securities, subsidies to privileged and/or corrupt private local and international economic and financial groups, and a permanent guarantee for the speculative movements of capital entry and outflow.

We understand that all the above is in keeping with what was emphasized in the Quito Ministerial Declaration of May 3, which states: “The peoples have given their governments the mandate to provide the region with new instruments of integration for development which must be on based on designs which are democratic, transparent, participatory, and accountable to the citizenry.

We are concerned about the repeated postponement of the signing of the South Bank´s founding Act, which could be an indication of the existence of significant unresolved issues. We hope that in the negotiations to overcome these unresolved issues, the proposals presented in this letter will be taken into account.

The current regional and international economic and financial situation is still favourable to the taking of concrete steps in this direction, but it may not last. We trust that you will take advantage of this historic possibility to create what could become a real South Peoples’ Solidarity Bank.

Yours sincerely,

Secretaría Regional:
Piedras 730, (1070) Buenos Aires
T/F +5411-43071867

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