A new development bank for South America, called Banco del Sur, spearheaded by Venezuela’s president, Hugo Chavéz, should be set up within months, after the region’s economy ministers decided that each member state would have one vote on the board.
The bank – which is being established as an alternative to Washington-based multilaterals, including the IMF, the World Bank, and the Inter-American Development Bank – will have initial capital of $10 billion. Sources indicate that Argentina, Brazil and Venezuela will each contribute $1 billion; $400 million will come from Ecuador and Uruguay; and $100 million from Bolivia and Paraguay. Colombia, Peru, Chile, Suriname and Guyana will contribute the remaining $3 billion.
Banco del Sur will have headquarters in Caracas, Buenos Aires and Bolivia’s capital, La Paz.
Carlos Fernández, Argentina’s new economy minister, says: "The Banco del Sur has entered the final stage of completion, as set out in its constitutional charter." He adds that the bank aims eventually to have a capital base of $20 billion.
A heated debate has taken place throughout the region about whether the new bank is necessary and about what its objectives will be. South America already has two other regional development banks: the Andean Development Corporation (CAF in Spanish) and the Financial Fund for the Development of the River Plate Basin (Fonplata in Spanish).