<incom> FW: Seven South American Countries Agree to Establish Regional Development Bank

[michael gurstein]

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From: moderator at PORTSIDE.ORG [mailto:moderator at PORTSIDE.ORG] 
Sent: October 18, 2007 7:17 PM
To: PORTSIDE at LISTS.PORTSIDE.ORG
Subject: Seven South American Countries Agree to Establish Regional
Development Bank


Seven South American Countries Agree to Establish
Banco Del Sur - Regional Development Bank on Nov. 3

* South American Countries Agree to Found Banco Del Sur
  (Bloomberg News)
* New South American bank planned (BBC News)
* Bank of the South sets launch date on Nov. 3 in
  Venezuela (Associated Press)

** Bank of the South: An Alternative to the IMF and
   World Bank -- Center for Economic and Policy
   Research panel in Washington, DC - Oct. 23, 2007
   at Service Employees International Union (SEIU)
   Conference Center

==========

* South American Countries Agree to Found Banco Del Sur
By Jeb Blount

Bloomberg - October 8, 2007

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTCCDSFNqrzY

Seven South American countries agreed to establish
Banco del Sur, a regional development bank championed
by Venezuelan President Hugo Chavez, in an effort to
expand regional trade and growth with their own
resources.

Chavez, Brazilian President Luiz Inacio Lula da Silva
and the presidents of Argentina, Bolivia, Ecuador,
Paraguay and Uruguay will inaugurate the bank on Nov.
3, in Caracas according the "Declaration of Rio de
Janeiro" signed by finance ministry officials of the
seven countries today.

"Banco del Sur is the beginning of a new financial
architecture for the South," said Rodrigo Cabezas,
Venezuela's finance minister, in comments to reporters
in Rio de Janeiro. "Our development won't be put at
the service of other countries." Today's meeting
included officials from Brazil, Argentina, Paraguay,
Uruguay, Bolivia, Ecuador and Venezuela.

Chavez proposed the bank as part of a drive to counter
the influence of the U.S. in Latin America and use oil
profits from record high crude prices to finance social
and economic development programs. Brazil has resisted
efforts to use the bank as an alternative to the
International Monetary Fund and is opposed to using
bank funds to support currencies.

"Lula and Brazil are not socialists like Chavez but
they are under pressure from Brazilian companies who do
a lot of business in Venezuela to keep relations
good," said Jose Botafogo, a former Brazilian
Ambassador and head of Brazil's Foreign relations
association in an interview. "Brazil would probably
rather not have a new bank, but it's willing to accept
one if it's a real bank and not just a Chavez social
program."

According to the declaration, the Caracas-based bank
will have regional offices in La Paz and Buenos Aires,
said a spokeswoman for the Brazilian finance ministry,
which hosted the meeting of finance ministers in Rio de Janeiro.

The amount each country will contribute to the bank and
how it will raise additional capital are issues to be
worked out in the 60 days after the Caracas signing
ceremony, Guido Mantega, Brazil's finance minister said
at a press conference.

In addition to agreeing to set up the bank, they
decided each country will have an equal voice on the
bank's board of directors. Chile, Peru, Colombia,
Suriname and Guyana are yet to say whether they will
join the bank.

Venezuela, which had wanted the bank to make loans to
Cuba and Central American nations such as Nicaragua
emphasized the bank's difference from older
international institutions such as the World Bank and International Monetary
Fund.

"No conditions will be set on loans to members,"
Cabezas said, adding that the lending practices of the International
Monetary Fund and the World Bank in the region had been a "neo- liberal
disaster."

Brazil, which according to Mantega will make a
"large" contribution to the bank, emphasized the goal
of creating a self-sustaining institution that will
earn enough interest on investments to increase the
amount of capital available for loans.

"We will not be making adventures; this will be a
serious bank," Mantega said. "We see it as a way of
promoting regional integration projects and both the
private and public sector."

The bank will not make grants, only interest-bearing
loans and operate only within South America Mantega.
The bank will also seek to increase its capital to
"three, four or five times" the initial national
contributions through borrowing, possibly through
international capital markets, he said.

The bank hopes to make its first loan in 2008, Mantega
and Cabezas said. They also said the bank plans to work
with existing regional financial institutions such as
Brazil's state development bank BNDES and the
Corporacion Andina de Fomento.

==========

* New South American bank planned

By James Ingham

BBC News - October 9, 2007 http://news.bbc.co.uk/2/hi/business/7034939.stm

Seven South American countries will create a new
development bank.

Following a meeting in Brazil, finance ministers said
the Bank of the South would play a "central role in the
new financial architecture of the region".

The bank will have its headquarters in Venezuela, the
country that originated the idea.

The idea for this bank was first put forward by
Venezuela's socialist President Hugo Chavez, who is
keen to reduce US influence in the region.

President Chavez also wants to provide an alternative
to lending organisations such as the World Bank and the International
Monetary Fund, which he sees as biased, capitalist and imperialist.

The Bank is also part of his agenda to bring about
South American unity.

Now with the agreement of Argentina, Brazil, Bolivia,
Ecuador, Paraguay and Uruguay, the idea has become a
reality and the bank will be launched next year.

There are however some details that still need
resolving.

The bank's capital is likely to start at $7bn - not all
cash, but certificates it can call on when needed.

But this figure has not been agreed on by all, neither
has the exact amount that each country will contribute.

Presidents of all seven nations will sign the deal at a
summit in Caracas in November.

==========

* Bank of the South sets launch date on Nov. 3 in
Venezuela

The Associated Press - October 8, 2007
http://www.iht.com/articles/ap/2007/10/08/business/LA-FIN-Brazil-Bank-of-the
-South.php

RIO DE JANEIRO, Brazil: The Bank of the South - once
just a gleam in the eye of South American leaders - now
has a due date.

Finance Ministers from seven nations announced Monday
that the multinational funding institute, which will
operate similarly to the Inter-American Development
Bank, will be founded Nov. 3 in Caracas, Venezuela.

The bank is the brainchild of Venezuelan President Hugo
Chavez, who has been promoting it as an alternative to
the International Monetary Fund, which he blames for perpetuating poverty
and contributing to inflation in Latin America.

"We can now say that the Bank of the South is about to
become reality," Brazilian Finance Minister Guido
Mantega told reporters in Rio de Janeiro. "It will
finance integration and will be open to all of South
America's 12 countries."

"There is still important work to be concluded,"
Mantega said, adding that the countries involved have
yet to determine details such as the bank's financial
structure and how much each nation will contribute.

Chavez has touted the bank as a counterweight to U.S.
influence and a way for the region to chart its own
economic course.

But Venezuelan Finance Minister Rodrigo Cabezas said
Monday that "the bank is not against anything or
anyone. It is in favor of the people of South America."

"This is not a bank of one country or of one
president," he added.

The bank will lend for development projects at interest
rates similar to those charged by other multilateral institutions, Mantega
said.

He added that the finance ministers of each member
nation will sit on the bank's administrative council
and that each country will have one vote.

The launch date was agreed to during a daylong meeting
between the finance ministers of Argentina, Bolivia,
Brazil, Ecuador, Paraguay, Uruguay and Venezuela.

==========

The Center for Economic and Policy Research invites you
to join us for a special opportunity:

Bank of the South: An Alternative to the IMF and World
Bank

with special guest speakers,

* Rodrigo Cabezas, Minister of Finance, Venezuela
* Ambassador Mario Gustavo Guzmán, Ambassador of
Bolivia to the United States (invited)
* Fausto Ortiz, Finance Minister, Ecuador (invited)
* Miguel Peirano, Minister of Economy and Finance,
Argentina (invited)
* Guido Mantega, Minister of Finance, Brazil (invited)
* With introductory remarks by Dr. Mark Weisbrot,
economist and co-director of the Center for Economic
and Policy Research

Tuesday, October 23, 2007 --  10:30am -12 noon

Service Employees International Union (SEIU) Conference
Center
1800 Massachusetts Avenue, NW
Washington, DC 20036

Latin America has experienced an unprecedented long-
term economic growth failure over the last quarter-
century, at the same time that it has implemented a
number of economic policies advocated by the IMF and
World Bank. In recent years, the electorate in a number
of countries has voted to reject these policies and has
elected governments with an explicit mandate to change
course on economic policy.

These governments have been looking toward and in some
cases implementing alternative economic strategies,
including regional economic integration. This year, the governments of
Bolivia, Brazil, Ecuador, Paraguay, Uruguay, Venezuela, and now Colombia,
have decided to form a new "Banco del Sur" as an alternative to the IMF,
World Bank, and allied institutions. It is scheduled to be launched on
November 3rd. Join us for a special opportunity to discuss the Bank of the
South with some of its creators.

To RSVP, please click here.
<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=eFZF9SYmLFHKXfAJjSWC
Kzx%2F4Uq2gJzB>

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