Bank of the South

The Bank of the South (Dutch: "Bank van het Zuiden", Portuguese: "Banco do Sul", Spanish: "Banco del Sur") is a monetary fund and lending organization first proposed by Venezuelan President Hugo Chávez. 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 nation within the region of South America. It has been established because of disapproval of the protocol of the World Bank and other international lending institutions. 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 e.g. deregulation.

The Bank is intended as an alternative to borrowing from the IMF and the World Bank. Hugo Chávez has promised to withdraw from the IMF and encourages other member states to do so as well, Raphael Correa of Ecuador declaring the World Bank representative to his country a "person non grata". 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.

A meeting of southern international economists in Caracas recently saw repeated declarations of the importance of Banco del Sur, especially in light of the recent global financial crisis.

Current status

Venezuela, as the originator of the idea, will be involved upon the organization's inception. Other participating countries are Argentina, Brazil, Bolivia, Colombia, Ecuador, Paraguay and Uruguay. In April 2007, Brazil promised to donate a large amount of funding as well.

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, [ [http://www.juventudrebelde.cu/internacionales/2007-11-03/el-banco-del-sur-sera-realidad-en-diciembre/ El Banco del Sur será realidad en diciembre - Internacionales - Juventud Rebelde - Diario de la Juventud Cubana ] ] and then to 9 December 2007, [ [http://www.mercopress.com/vernoticia.do?id=12056&formato=HTML Mercopress ] ] when it was finally launched. [ [http://ap.google.com/article/ALeqM5g81SJxsarRbnlaER9l95Oc818FogD8TE26180] Dead link|date=March 2008] 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. ["Bank of the South sets launch date on November 3, 2007 in Venezuela." "International Herald Tribune". October 8, 2007. ] In a surprise move, Colombia formally requested membership in the bank on 13 October 2007. [ [http://www.venezuela-aktuell.de/index.php?option=com_content&task=view&id=367&Itemid=6 Venezuela aktuell - Viele Überraschungen bei Dreiergipfel ] ]

Fractional-reserve banking

One of the main objectives is to divert the profits generated by fractional-reserve banking back to original countries instead of the present external exploitation done by "outside" banks.

ee also

*Union of South American Nations
*Bolivarian Alternative for the Americas
*Mercosur
*Telesur
*Bolivarianism
*Bolivarian Revolution
*Fractional-reserve banking

References

ources

[http://www.economist.com/world/la/displaystory.cfm?story_id=9149736 Article in the Economist]

[http://www.venezuelanalysis.com/news.php?newsno=2273]

[http://www.tehrantimes.com/index_View.asp?code=158969]