Experts address missing pieces of crisis response ahead of Canadian 2010 G8/G20 meeting
On October 19th and 20th the Halifax Initiative co-hosted a conference with The North-South Institute and the University of Ottawa on “What’s missing in the response to the global financial crisis?” The conference sought to engage the Canadian government in discussions with national and international academics, activists and policy-makers ahead of next year’s G8/G20. The conference touched upon a range of issues related to the causes of the crisis, policy and regulatory remedies, governance of the international financial institutions, tax havens and unfettered private capital flows, an emerging debt crisis, alternatives to the renewal of the Doha trade round, and the respective roles of the United Nations and G20. A policy brief with clear recommendations for the government is forthcoming.

What is the Bank of the South?
On December 9th, 2007, representatives from Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay, and Venezuela met in Buenos Aires, Argentina, to launch “el Banco del Sur” or the Bank of the South (BoS). With the creation of the Bank, the leaders of Latin America envisaged a new development institution to help promote growth and tackle poverty. The BoS was originally proposed in 2006 by Venezuelan president Hugo Chavez. Chavez, along with other South American leaders, wanted a Bank that would allow them to assert their political and financial independence from traditional international financial institutions (IFIs), like the International Monetary Fund (IMF) and the World Bank, and put an end to decades of structural adjustment policies imposed by the IFIs on countries in Latin America.

In 2000, the Halifax Initiative Coalition organized a conference on Transforming the Global Financial System. At that time, the prospect of alternative institutions and mechanisms to the Bretton Woods Institutions (BWIs), for funding international development, were very much a matter of theoretical debate.

Now, just seven years later, the landscape has changed dramatically. There are now new players in the field in the form of alternative institutions, such as the Bank of the South and the Chiang Mai initiative. There are alternative sources of development funding, for example through new bi-lateral donors from China, Brazil and India, or from private sources, such as the Bill Gates Foundation. There are alternative mechanisms for financing development and regulating financial flows, such as airline levies, advance market commitments and currency transaction taxes.

The Bank of the South: An Alternative to the IFIs?
In early June, the Bank of the South moved a step closer to becoming a reality as the Ministers of Finance of Venezuela, Argentina, Paraguay, Brazil, Ecuador and Bolivia met in Buenos Aires to discuss its founding constitution. In addition to functioning as a development bank and a source of stabilization funds, the Bank is seen as a precursor to a regional monetary system. Just as significant is the Bank of the South’s role as an alternative to the World Bank and IMF, whose policies in Latin America have faced substantial regional criticism. In this respect, the Bank is seen as a valuable mechanism for re-asserting Latin America’s economic independence and political sovereignty.