Russia and Venezuela Bi-national Bank

Dear Editor,

The joint steps taken by Venezuela and Russia to create an investment bank demonstrates the growth of a positive and potentially rewarding relationship (“Venezuela and Russia Create a Bi-National Bank,” June 23) where none existed before. However, the relationship could be a delicate one, for Venezuela, if it is not closely monitored, could be tempted to look upon the proposed new institution as much as a political institution as an economic one. Venezuela has shown a persistent wariness regarding outside economic penetration of South America, particularly if it adversely affects projects already financially functioning within the Free Trade Area of the Americas (ALBA). In 2006, the Bank of the South was founded with its mission to financially unite the region. This was an initial step toward resolving problems associated with South America’s chronic financial dependency on the United States. Creating an effective economical partnership with Russia through their new bi-national bank raises the possibility that Caracas will persuade Russia to serve as a countervailing factor meant to neutralize the United States traditional role as regional hegemon. But the purpose of ALBA may be somewhat compromised by Russia’s enhanced influence in the region. ALBA could be adversely affected by the emergence of the new bi-national bank with Russia, which could end up diminishing the authority of the broader-based Bank of the South. In both cases Russia’s partnership with Venezuela is one not to be ignored due to the affect it is bound to have on already established programs in Latin America.

Leonardo Faria Chusán
Research Associate, Council on Hemispheric Affairs
Washington, D.C