Rethinking FinanceAlternative voices for a new financial architecture

Latin America has of some of the world's largest countries, in terms of land area, but the continent has no large global economy, and only two medium-sized economies: Brazil and Mexico. The region also lacks a local hard currency as a basis for international, and especially intra-regional, trade. Many of the commodities that South American countries export do not trade in the currency of the originating country. A regional currency facilitates trade and the creation of financial service hubs.

Leaders of the Bolivarian Alliance for the Peoples of Our Americas (ALBA) met on October 16 and 17 in Cochabamba, Bolivia. At this meeting the leaders of the member countries – Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Honduras, Nicaragua, Saint Vincent and the Grenadines, and Venezuela – agreed on a new name for the SUCRE, that now stands for Sistema Único de Compensación Regional (Unified System of Regional Compensation), and signed its Constitutive Treaty.

One group of financiers seems to be doing nicely out of the global recession: the International Monetary Fund and other International Financial Institutions (IFIs) are enjoying a return to relevance and lining up for increased funding. But the issues at stake here go beyond the IFIs’ own agendas.

In Latin America discussions are held on whether or not the debt with the IMF should be paid, if its conditionalities should be met, and during the last weeks, if the purchase of IMF bonds by Brazilian government is a treasonous unprincipled act or if it is just a good way to branch away from US Treasury Bonds. These debates have explored all the aspects of the tumultuous relationship between the IMF and LA, except for one: What Fund do we want? How should we reform the Fund, if we could?