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

ALBA Bank opens in Cuba

The Bolivarian Alternative for the Americas (ALBA, in Spanish) opened its first bank yesterday in Cuba. The ALBA trade alliance- consisting of Venezuela, Cuba, Nicaragua, and Bolivia- will start with nearly $1 billion in assets and can fund development projects throughout Latin America and the Caribbean.

The ALBA Bank was masterminded by Hugo Chavez and formed during a summit in January. According to one Venezuelan official, the bank is designed to compliment with another multilateral economic body promoted by Chavez: the Bank of the South.

(Vice-minister for Financing and Development Gustavo Hernandez) denied the project would compete with the Bank of the South, an initiative of Venezuelan President Hugo Chavez designed to be an alternative to multilateral institutions like the World Bank and the International Monetary Fund, which according to Caracas are overly influenced by Washington.

"We want to work internationally in a financial framework that allows us to build a type of cooperation and innovation based on other criteria," he said.

Aside from the ALBA, Venezuela and Bolivia are part of the Bank of the South along with Brazil, Uruguay, and Paraguay.

Image- Christian Science Monitor (“A presence: Venezuela's Hugo Chavez presides over the first Bolivarian Alternative for the Americas (ALBA) Summit in 2007.”)

Sources- International Herald Tribune, Prensa Latina, Guardian UK, The Latin Americanist, BusinessWeek

Bank of the South launched

Representatives of seven South American countries met on Sunday to formally launch the Bank of the South- a new regional development bank. In a ceremony in Buenos Aires, the bank was established with an initial capital of $7 billion and with the goal of acting as a viable alternative to other financial institutions such as the World Bank and International Monetary Fund.

Though most of the countries allied to the Bank of the South are led by left-leaning presidents, one analyst told the BBC News that the bank shouldn’t be rejected merely over politics:

Michael Shifter, Latin American expert at the Washington-based Inter-American Dialogue, said that while it was "tempting to dismiss the Banco del Sur because of the political agenda behind it", he would advise skeptics to wait and see.

"Chavez's political agenda is undeniable, but so is the money he has at his disposal right now," he said.

"Over the longer run, the initiative will have real problems because of politicization, but in the meantime it would be a mistake to underestimate its possibilities."

The Bank of the South’s founding members are Venezuela, Argentina, Brazil, Bolivia, Paraguay, Uruguay and Ecuador.

Sources- BBC News, Xinhua, Associated Press, Reuters, Bloomberg

Image- Al Jazeera

Daily Headlines: June 12, 2007

* Cuban-American senator Bob Menendez (image) will not only support Hillary Clinton’s candidacy for the U.S. presidency but will serve as her campaign co-chair.

* Congrats to Latina actress Ana Ortiz (best known for her role in “Ugly Betty”) who got married over the weekend in Puerto Rico.

* The Christian Science Monitor examines the dangers facing journalists in Mexico.

* The Hugo Chavez-led Bank of the South will have its main office in Caracas with branches in Bolivia and Argentina.

* Mexico’s peso continues to fall in value after investors' worries over the U.S. economy.

* Follow-up: remember the State Department report that blasted Venezuela’s counternarcotics efforts? Guess which country’s law enforcement seized 2.5 tons of cocaine bound for Africa.

Image- WNYC

Sources- Guardian UK, Christian Science Monitor, Zee News, Wikipedia, Bloomberg, Monsters & Critics, Wikipedia, USA TODAY, The Latin Americanist, Metro