Bank of the South to Initiate Operations this Year
The Bank of the South (Banco del Sur) will begin operations this year, even before its formal constitution, the head of Ecuador’s presidential commission to design the new regional financial architecture, Pedro Paez, informed last Tuesday from Quito.
The proposal was raised byEcuadorand plans to carry out projects by means of a trust. “The proposal consists of a trust fund for each project”, said Paez, who detailed that there are plans, for example, to use funds from the Bank of the South to build a system of Latin American laboratories which guarantee healthcare for people throughout the region”.
This project in particular aims at producing generic medicines with the possibility of financing research regarding cures for diseases such as leishmaniasis, tuberculosis and malaria, which have not been treated by transnational pharmaceutical companies because “they are not profitable”.
There are other initiatives such as building micro-regional mills controlled by local producers and governments, connected by the Internet.
That plan aims at establishing a strategic reserve of basic food staples to ensure supplies for the population during extraordinary events such as droughts, earthquakes or floods.
Currently, the creation of the Bank of the South has been confirmed by the parliaments of Ecuador and Venezuela. The bank’s constitution is still pending the approval of Argentina, Brazil, Bolivia, Paraguay and Uruguay.
Chairman of the board of directors of Ecuador’s Central Bank, Diego Borjas, expressed that the regional entity should be officially created before the end of this year, once the remaining parliaments approve their incorporation.
“We hope that Uruguay, Bolivia and Argentina will solve this situation very soon”, Paez said.
The Bank of the South is an initiative of countries that comprise the Union of South American Nations (Unasur) and seeks to ensure regional economic independence in a continent that has suffered severely from dependence on international financial institutions, such as the World Bank and the International Monetary Fund (IMF).
The Bank of the South will eventually replace funding, loans and credits provided by the IMF, with direct financing from the region’s countries, based on a philosophy of integration, cooperation and solidarity. The bank’s founding principles prohibit the use of funds to indebt or inslave member nations, but rather to provide them with a platform for sustainable development and growth.