By Xinhua
Buenos Aires : Presidents of six South American nations have signed a document to create the Bank of the South, a development bank intended to be an alternative to institutions like the World Bank and International Monetary Fund (IMF).
Presidents of Argentina, Venezuela, Brazil, Bolivia, Ecuador and Paraguay signed the document Saturday.
The bank was launched with an initial capital of $7 billion. Uruguayan President Tabare Vazquez is expected to sign the document Monday morning.
To be based in the Venezuelan capital of Caracas, the bank also has two branches in the Argentine capital of Buenos Aires and Bolivia’s legislative capital, La Paz.
The presidents said the bank was aimed at boosting economic growth of South America with low interest credit for infrastructure projects and financing for private sector projects.
Different from other institutions like IMF, all members of the Bank of the South are given veto power.
“The bank will be a tool to enhance the financial autonomy of South America, as it is the first bank really controlled by the nations of our continent,” Brazilian President Luis Inacio Lula da Silva said.
“I believe that it is a good time for business and will benefit us all,” he added.
Bolivian President Evo Morales called the founding of the bank a “historic moment”, saying it will help solve financial problems and social ones.
Ecuadorian President Rafael Correa said the launch of the bank marked an end of the South American central banks’ reliance on the IMF and the World Bank.
“We must do all for South America to have a potent voice in the globalisation era,” Paraguayan President Nicanor Duarte said.
For his part, Venezuelan President Hugo Chavez said: “The Bank of the South will free us from the chains of dependency and underdevelopment.”
He also said the bank would focus on the region’s weakest nations to finance their industrial and energy development programs with a social perspective.
The bank will start operations in 2008, and legislatures of its member nations have 60 days to ratify their presidents’ decision.
The bank will be run by a Board of Directors comprising the economic ministers of its member states.