Some observers believe that the plan has an unmistakable political message. They say it complements other measures that Washington has taken to undermine the increasingly independent policies of several governments in Latin America.
A number of countries, including Argentina, Bolivia, Brazil, Ecuador, Paraguay and Venezuela, say they plan to establish a new development institution called the "Bank of the South" to rival the international development banks that are dominated by industrialized nations.
The idea was championed by Venezuelan President Hugo Chavez as a tool to increase social spending and promote poverty alleviation.
Many leaders in Latin American have blamed the neoliberal policies of Washington, the World Bank and the Inter-American Development Bank (IDB) -- in which the U.S. has the largest share at 30 percent -- for continued poverty in the region.
Some are forsaking the economic advice peddled by the trio, which generally pressures nations to liberalize their economies and sell national assets to foreign companies and their allies in the local business elites.
The new mood has prompted Washington and the Washington-based development banks to unveil a number of initiatives meant to fight poverty in Latin America.
"Politically what they are doing is trying to counter the influence of Chavez and the other seven countries that are forming the Bank of the South," said Mark Weisbrot, who co-directs the Center for Economic and Policy Research in Washington.
"I think that's what's behind all these initiatives coming from the U.S. and U.S.-dominated institutions," he said.
But U.S. Treasury Secretary Paulson said Washington has a genuine interest in fighting poverty in Latin America.
"The United States' interest in the Americas is strong," Paulson said. "We are committed to helping the region reduce poverty, fight corruption, build a middle class and generate more opportunities, including for those who currently feel excluded from the region's growing prosperity."
The U.S.-led program aims to help international investors' pinpoint infrastructure projects and disburse information about them. It will be managed by the International Finance Corporation, which is often viewed in Latin America as an instrument of U.S. economic and foreign policies in the region.
The World Bank agency also plans to provide technical assistance on structuring projects, tendering concessions and improving regulatory regimes.
The initiative signals the U.S. interest in the region in the face of rising sentiments against corporate-led globalization. The unrest has been buttressed by the World Bank and similar international financial institutions, which have had negative impacts in several countries in the region. For example, the bank's policies have led to an ever-widening gap between the poor majority and the rich.
Last month, Washington unveiled another program to re-energize market-based bank lending to small businesses in Latin America and the Caribbean.
The initiative involves a combination of new lending models, sharing part of the lending risk, and technical, regulatory assistance so that more banks can finance options for small businesses.
Washington maintains that Latin America's most serious constraint on economic growth is its lack of infrastructure. It said that Latin America currently spends less than 2 percent of its gross domestic product -- the primary indicator used to gauge the health of an economy -- on infrastructure annually, failing to make sufficient investments in electricity, transport and water systems.
In March, the U.S. Treasury Department, the main power broker in most international financial institutions, said it had worked closely with the IDB over the past year to cancel $4.4 billion in debt and interest owed by five of Latin America and the Caribbean's poorest countries.
The World Bank said that investing in the region's infrastructure could reduce inequality by as much as 20 percent.
In March, the World Bank issued a report encouraging foreign investors and businesspeople to start pursuing the world's four billion poor people as a potentially lucrative market worth $5 trillion, much bigger than previously thought. It estimated that the poor in Latin America could number 360 million people.
The IDB's pro-U.S. president, Luis Alberto Moreno, a former Colombian ambassador to Washington, announced plans last year to target the market for the region's low-income majority.
Donald Terry, manager of the IDB's Multilateral Investment Fund, said earlier this year that the private sector must look at poor people as the consumers that will buy the goods they produce.
The poor, he said, "are an untapped market for the private sector."
Analysts say that what Washington and its allies in international financial institutions are really proposing is a plan to maintain their grip on Latin economies while appearing to be fighting poverty.
"This is a sad spectacle of an administration so trapped in ideology and narrowly defined self-interest that even when it decides to provide assistance in the region, it cannot do it in a pure and genuine way," said Aldo Caliari of the Center of Concern in Washington.
"The problem of poverty and inequality generated by unfettered market-based solutions -- clearly reflected in the support that the public gives to leaders promising a recapture of the state for the promotion of social goods -- is finally reaching a level where the administration feels it needs to give some sort of countervailing assistance."
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Albion Monitor July
11, 2007 (http://www.albionmonitor.com)
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