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S America set to launch new bank South America launches new bank
(1 day later)
Representatives from across South America will sign agreements on Sunday setting up a new regional bank, the Banco del Sur or Southern Bank. Leaders from across South America have signed agreements setting up a new regional bank known as the Banco del Sur or Southern Bank.
The body is designed to supersede the World Bank and International Monetary Fund (IMF), seen by many as responsible for failed policies in the region.The body is designed to supersede the World Bank and International Monetary Fund (IMF), seen by many as responsible for failed policies in the region.
Funded by regional powers such as Brazil, Argentina and Venezuela, it will aid economic and social projects.Funded by regional powers such as Brazil, Argentina and Venezuela, it will aid economic and social projects.
Each member will have one vote, irrespective of its size or funding.Each member will have one vote, irrespective of its size or funding.
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Set up by Brazil, Venezuela, Argentina, Uruguay, Paraguay, Ecuador and Bolivia, the Banco del Sur will have its headquarters in Caracas, with offices in Buenos Aires and La Paz. Set up by Brazil, Venezuela, Argentina, Uruguay, Paraguay, Ecuador and Bolivia, the Banco del Sur's headquarters are going to be in Caracas, with offices in Buenos Aires and La Paz.
It'll be very difficult to have an institution that operates with transparency and efficiency Alan Cibils, economist It'll be very difficult to have an institution that operates with transparency and efficiency Alan Cibils, economist class="" href="/1/hi/world/americas/7068124.stm"> Rival seeks to usurp IMF
The idea was born after what analysts say were the failed economic recipes suggested by the IMF and the World Bank.The idea was born after what analysts say were the failed economic recipes suggested by the IMF and the World Bank.
"From a theoretical point of view it's necessary, it has been necessary for a long time," said Argentine economist Alan Cibils. The agreements to formally set up the bank were signed at a ceremony at the presidential palace in Buenos Aires, hosted by Argentine President Nestor Kirchner and his wife, President-elect Cristina Kirchner who is being inaugurated on Monday.
Bolivian President Evo Morales said the bank would provide a tool to help to combat poverty in the region and brought "new hope" for the people of South America.
President Hugo Chavez of Venezuela said such a proposal had been "unthinkable a decade ago".
Today, he said, "it is a political reality that forms part of an economic and social war".
The bank aims to start with capital of $800m (£400m) and eventually gather $7bn, with funds to deal with natural disasters and develop joint scientific and economic projects across the region.
Brazilian President Luiz Inacio Lula da Silva said the bank's formation was a "decisive step" towards the integration of South America, and he invited other countries in the region to join.
However, although the project sounds grand, the arguments over how the bank will operate have already begun, says the BBC's Daniel Schweimler in Buenos Aires.
Argentine economist Alan Cibils said that from a theoretical point of view such a bank had been necessary for a long time.
But he added: "From a practical point of view I would say I'm sceptical. It'll be very difficult to have an institution that operates with transparency and efficiency given the levels of corruption in the governments that are sponsoring this institution."But he added: "From a practical point of view I would say I'm sceptical. It'll be very difficult to have an institution that operates with transparency and efficiency given the levels of corruption in the governments that are sponsoring this institution."
The agreements to formally set up the bank are being signed in Buenos Aires where regional leaders have gathered for Monday's inauguration of the new president of Argentina, Cristina Kirchner.
They hope to start with $800m and eventually gather $7bn, with funds to deal with natural disasters and develop joint scientific and economic projects across the region.
It sounds grand but the squabbles about just how it will operate have already begun.