South American Leaders Launch Bank of the South

Venezuelan President Hugo Chavez and five other South American leaders officially launched the regional development bank, Banco del Sur which is to permit the nations of the region to use their reserves for development and investment in the region.
Leaders from Six South American nations celebrate after signing the founding act for the Bank of the South (AP)

Mérida, December 10, 2007 ( –
Venezuelan President Hugo Chavez and five other South American leaders met in Argentina on
Sunday to officially launch the regional development bank, Banco del Sur (Bank
of the South). Chavez emphasized that the new bank will permit the nations of
the region to use their reserves for development and investment in the region
and will mark the beginning of true union among the nations of South America.

The founding act of the new financial entity was signed
before a packed audience at the Casa Rosada presidential palace in Buenos Aires. Presidents
Nestor Kirchner of Argentina, Evo Morales of Bolivia, Ignacio "Lula" da Silva
of Brazil, Rafael Correa of Ecuador, Nicanor Duarte of Paraguay, and Hugo Chavez of Venezuela were all present for the signing, as
well as a government representative from Uruguay.

"The Bank of the South opens the possibility to bring
investment and the South American nations' reserves to our continent in order
to convert them into development," said the Venezuelan president.

Chavez, who first put forth the idea in 2006, explained that
the nations of the region have traditionally deposited their reserves in banks
in North America and Europe, a circumstance
that results in a transfer of wealth from the poor nations to the wealthy
nations. He emphasized the necessity for the nations of the region to keep
their financial resources in the region.

"Hundreds of billions of dollars, in treasury bonds in
the United States,
in Euros, in goods. The time has come to bring those resources back," he

The bank, which Venezuelan officials estimate will have
around $7 billion to start with, is intended to grant the nations of the region
greater financial and political independence. Traditionally, poor nations have
been dependent on loans from the World Bank and the International Monetary Fund
(IMF), institutions whose loans come with strings attached.

"They have always subjected the less-developed countries
to their rules and methods upon giving them credits, without looking at the
reality," said Nicanor Duarte about the international financial

But unlike financial organizations such as the World Bank
and the IMF, the Bank of the South will have equal representation among all the
member countries regardless of financial contribution and will dispense loans
to the South American nations for regional integration plans as well as
development programs to fight poverty.

"The South American nations will be able to put an end
to their political and financial dependence that they have had with the
neoliberal model," said President of Ecuador Rafael Correa.

Bolivian President Evo Morales said the bank is the first
step towards a common currency among the South American nations and would allow
them to resist the pressures of international lending institutions that have
demanded the privatization of state-owned companies.

President of Ecuador Rafael Correa explained that the
development of a joint fund as the central axis of the region's central banks
would allow for the development of a common currency among all the South
American nations. He assured that it only required the political will of the
region's leaders.

"Nothing is preventing us from setting up the creation
of a common currency," he explained.

The South American leaders also emphasized the importance of
the new bank in the region's integration. President Chavez pointed to other
projects for integration, including the regional television channel Telesur and
Petrosur, an initiative for the integration of the region's energy supply.

"This integration must exist to assure our people
health, housing, and decent jobs," he said.

President of Brazil Lula da Silva called it a "decisive
step" in South America's integration and agreed that the institution would
give the South American nations greater independence and allow them to
"defeat the South American dependence on the international system."

"This will be the first international bank truly
controlled by the nations of our continent," he said.

The bank will start operations in 2008 and will be based in Caracas with regional offices in Buenos
Aires and La Paz.
The members' financial ministers will decide funding and operation details over
the next two months.