The Bank of the South proposes to try to break the dependence of developing countries on international financial markets, channel their own capacity for saving, stop capital flight, channel central resources to priorities for independent social and economic development, change investment priorities, etc. It is designed as a public bank and as an alternative to the Inter American Development Bank and the World Bank.
The Bank of the South can grant credits with or without interest, as well as non-reimbursable aid in the form of donations. The Bank will be principally financed by contributions from member countries in the form of contributions and donations. Tax revenues through regional/international taxes can also be considered.
Those receiving priority credits and donations must be public entities (state, province, municipality, public corporations in the areas of production and services). Additionally, it is essential to clearly define private agents who can receive credits and donations from the bank so as to exclude strengthening big business interests from its activity. History from the past two centuries is replete with examples of public and popular banks that essentially served to strengthen capitalistic accumulation without any actual benefit for the people.
The Bank of the South cannot be disassociated from the debt situation. It is essential that the Bank avoid managing public debt for the benefit of financial capital.
Another important aspect is the necessity of popular and democratic oversight in tandem with debt-auditing initiatives. The active participation of parliaments in supervising the Bank's role must also be encouraged.
Source: CADTM
_ www.cadtm.org
