Bank of the South
The Bank of the South ; or BancoSur is a monetary fund and lending organization established on September 26, 2009 by Argentina, Brazil, Paraguay, Uruguay, Ecuador, Bolivia and Venezuela with an initial capital of 20 billion U.S. dollars. Argentina, Venezuela and Brazil were to have each pledged $4 billion, while Uruguay, Ecuador, Paraguay and Bolivia were to have chipped in smaller amounts. The intention of the bank is to lend money to nations in the Americas for the construction of social programs and infrastructure.
Plans and Involvement
The ultimate goal of the Bank of the South is to include every state within the region of South America. It has been established because of disapproval of the protocol of the World Bank and IMF, in particular the enforcement of unrelated free market reforms on countries seeking emergency loans. It also represents an attempt to achieve regional independence and endogenous development. The program would lend money to any nation involved in the construction of approved programs, and without conditions traditionally attached to such loans, such as deregulation.
The Bank is intended as an alternative to borrowing from the IMF and the World Bank. Hugo Chavez has promised to withdraw from the IMF and encourages other member states to do so as well, Indeed Latin America's dependence on the IMF fell dramatically between 2005 and 2008, with outstanding loans falling from 80% of the IMF's $81bn loan portfolio, to 1% of the IMF's $17bn of outstanding loans. Brazil and Argentina are also refusing to borrow from the IMF again. In 2005, Latin America made up 80% of the IMF's lending portfolio. With Latin American countries refusing to continue dealing with it, that percentage dropped to 1% by 2007.
It is proposed that all member countries contribute fairly equal shares to the Bank's initial capital of fourteen billion reais (seven billion dollars) so that no member state will control a dominant share. Argentina joined with Venezuela to officially propose such an initiative, but Brazil also became a major player.ZNet, 18 May 2007, BancoSur should be a bank to finance a socialist economy
The concept was first raised during the first presidential campaign of Venezuelan President Hugo Chavez, in 1998.V. McElhinny, Global Exchange, Bank of the South
The concept was originally launched in 2006 in cooperation between Venezuela and Argentina, led by their respective Presidents Hugo Chavez and Nestor Kirchner.Tehran Times, 11 December 2007, South America launches rival to the IMF, World Bank In April 2007, Brazil agreed to join.Venezuelanalysis, 16 April 2007, Brazil To Join Bank of the South
In May 2007, a meeting in Quito led to the official creation of the bank, and was said to indisputably signify another step towards Latin American integration.
Seven South American nations met in Rio de Janeiro on October 8, 2007, to plan the beginning of the Bank. It was announced that the Bank will be headquartered in Caracas, Venezuela, and would begin operations on November 3, 2007; this was later postponed to 5 December 2007, and then to 9 December 2007.Merco Press, 4 December 2007, South America ready to launch two major regional projects Representatives from Argentina, Bolivia, Brazil, Ecuador, Paraguay, Uruguay and Venezuela were present at the meeting. All 12 South American countries will be eligible to borrow from the Bank.International Herald Tribune. October 8, 2007. "Bank of the South sets launch date on November 3, 2007 in Venezuela." In a surprise move, Colombia formally requested membership in the bank on 13 October 2007. As of April 25, 2008, the bank was still awaiting its member nations to have their local legislatures approve their individual capital investments. Member voting rights were yet to be determined at that time.
In March 2009 a number of Latin American nations agreed to contribute $7 billion towards the bank's start-up capital. Venezuela, Argentina, and Brazil are to contribute $2 billion each, and Ecuador, Bolivia, Paraguay, and Uruguay agreed to contribute varying amounts to provide the remaining $1 billion.MercoPress, 9 May 2009, Bank of the South takes off with 7 billion USD initial capital
On Saturday, September 26, 2009, the presidents of Argentina, Brazil, Paraguay, Uruguay, Ecuador, Bolivia and Venezuela signed an agreement establishing the South Bank with an initial capital of 20 billion U.S. dollars. Leaders including Brazilian President Luiz Inacio Lula da Silva and Argentina's Cristina Fernandez de Kirchner formally signed on to the pact and announced that the starting capital would be $20 billion.
It was unclear how much each country would contribute, but under the previous $7 billion figure announced in May, Argentina, Venezuela and Brazil were to have each pledged $2 billion, while Uruguay, Ecuador, Paraguay and Bolivia were to have chipped in smaller amounts.
Union of South American Nations
Bolivarian Alternative for the Americas
SUCRE (currency of the ALBA)
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