An Alternative to Debt Slavery - The Bank of the South

Hugo Chavez announced his idea for a Banco del Sur, or Bank of the South, as part of his crusade against the institutions of international capital he calls "tools of Washington." With seven founding member-states - Venezuela, Argentina, Brazil, Uruguay, Paraguay, Bolivia and Ecuador
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In July, 2004, the IMF and World Bank commemorated the 60th anniversary of their founding at Bretton Woods, NH to provide a financial framework of assistance for the postwar world after the expected defeat of Germany and Japan. With breathtaking hypocrisy, an October, 2004 Development Committee Communique stated: "As we celebrate the 60th anniversary of the Bretton Woods Institutions....we recommit ourselves to supporting efforts by developing countries to pursue sustainable growth, sound macroeconomic policies, debt sustainability, open trade, job creation, poverty reduction and good governance." Phew.

In fact, for 63 hellish years, both these institutions achieved mirror opposite results on everything the above comment states. From inception, their mission was to integrate developing nations into the Global North-dominated world economy and use debt repayment as the way to transfer wealth from poor countries to powerful bankers in rich ones.

The scheme is called debt slavery because new loans are needed to service old ones, indebtedness rises, and borrowing terms stipulate harsh one-way "structural adjustment" provisions that include:

-- privatizations of state enterprises;
-- government deregulation;
-- deep cuts in social spending;
-- wage freezes or cuts;
-- unrestricted free market access for foreign corporations;
-- corporate-friendly tax cuts;
-- crackdowns on trade unionists; and
-- savage repression for non-believers under a system incompatible with social democracy.

Everywhere the scheme is the same: huge public wealth transfers to elitist private hands, exploding public debt, an ever-widening disparity between the super-rich and desperate poor, and an aggressive nationalism to justify huge spending on security for aggressive surveillance, mass incarceration plus repression and torture for social control.

Read the alternatives and future prospects of the Bank, click here.