Bank of the South to soon start operations

A Latin American regional bank designed to serve as a counterweight to the International Monetary Fund and the World Bank is expected to begin operations in May.

The Bank of the South will be launched with $10 billion in startup capital, according Venezuelan Finance Minister Ali Rodriguez. "Several pending items were resolved," added Rodriguez after finance representatives of the seven member countries met yesterday in Caracas.

Argentina, Brazil, and Venezuela pledged $2 billion each for the Bank while Uruguay, Paraguay, Ecuador, Bolivia will each allocate $1 billion for the new institution.

The Bank of the South was created in December 2007 and at the time was both praised and panned by political analysts. Shortly before the Bank was launched, Nobel economics laureate Joseph Stiglitz enthusiastically backed it:

(…) "One of the advantages of having a Bank of the South is that it would reflect the perspectives of those in the south," he told a media conference. It would boost Latin America's development and provide a useful alternative to the World Bank and the International Monetary Fund.

"It is a good thing to have competition in most markets, including the market for development lending," Prof Stiglitz said.

Image- El Clarin (The heads of state of several South American countries launched the Bank of the South in 2007).
Online Sources- The Latin Americanist, WSJ.com, Prensa Latina, The Economist, Guardian UK, Center for International Policy, IHT