Article from: Herald Sun
October 10, 2007
SEVEN South American countries have agreed to establish a development bank championed by Venezuelan President Hugo Chavez as an alternative to the World Bank.
The Banco del Sur, or Bank of the South, is to be inaugurated on November 3 at a presidential summit in the Venezuelan capital Caracas, according to a declaration signed yesterday at a meeting in Rio de Janeiro of finance ministry officials from Venezuela, Argentina, Brazil, Uruguay, Paraguay, Bolivia and Ecuador.
The bank is to be headquartered in Caracas as its founders aim to expand regional economic growth and trade by financing development projects using their own money.
It is to play "a central role in a new regional financial architecture," the declaration said.
But media reports that the bank would have founding capital of $US7 billion ($A7.85 billion) remained unconfirmed, as was the amount of money each founding member would contribute to the bank or how it would raise additional capital.
The participating countries said the first loans should be made in the first half of 2008, and the bank would not lend outside its region during its first phase.
The establishment of the bank resulted from South American discontent with the World Bank and the International Monetary Fund.
The leftist-nationalist Chavez has accused the financial institutions of "extortion" and being instruments of imperialism.