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South-South Cooperation: The Bank of the South
Back in March I did a small piece on the creation of the Bank of the South, a.k.a, El Banco Sur (click here to see post). Currently working on my own analysis to this development and my general view on this South American effort to create a regional bank. For now, here are a few excerpts from today's MercoPress article. Economy and Finance ministers from seven South American countries are scheduled to meet Friday in Buenos Aires to advance in the creation of the Bank of the South, a financial institution to fund infrastructure and development projects in the region.“At the meeting participants will advance in the founding multilateral agreements for the establishment of the Bank of the South“, said the Argentine Central Bank in a short release.Participating ministers are from Argentina, Brazil, Bolivia, Ecuador, Paraguay, Uruguay and Venezuela.
In 2007 the countries of Venezuela, Argentina, Brazil, Bolivia, Ecuador, Uruguay and Paraguay formed Banco del Sur (Bank of the South). The bank if finally opening its doors, and, not surprisingly has made few headlines up in North America.Banco del Sur will launch operations with a initial $10 billion in capital for loans and other programs, reported Venezuela's state news agency ABN.
Contributions break down as follows. Venezuela, Argentina, Brazil will each contribute $2 billion. Bolivia, Ecuador, Uruguay and Paraguay will pool together the other $4 billion.Venezuela's finance minister Alí Rodríguez told media yesterday, he believes the Presidents of Banco del Sur's member countries know it is necessary to advance regional integration of energy, infrastructure and finance.Sounds all fine and dandy, but easier said than done. It would be some great ideal if Latin America's commodity producers could come together and form some kind of financial system to trade their goods (one random thought). It would also be nice if inter-regional trade could be made easier.
Yes... you can drive from Asuncion, Paraguay to La Paz, Bolivia but it will be ONE HECK OF A JOURNEY. Remember to pack extra shocks for your car too.Good idea to keep watch on this bank and see how things progress in the coming months.
