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

Nobel winning economist backs Bank of South

Joseph E. Stiglitz- 2001 Nobel Prize winner in economics- supported the idea of creating a new development bank for the Americas. The idea behind the Banco del Sur (Bank of South) was propelled by the Venezuelan government and Stiglitz gave defended it after meeting with Hugo Chavez:

"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.

In addition, Stiglitz praised Venezuela’s economic growth though he warned Chavez that measures need to be taken to “support” growth.

The Banco del Sur will be initially established by seven South American countries and is scheduled to be inaugurated on November 3^rd.

Speaking of the Nobel Prize, the campaign to grant the Nobel Peace Prize to Bolivian president Evo Morales ended on Friday when that honor was bestowed on Al Gore and the U.N. panel on climate change.

Image- International Herald Tribune

Sources- Prensa Latina, International Herald Tribune, Bloomberg, Guardian UK, Columbia University, AHN