MercoPress. South Atlantic News Agency

Region gives final touches to launching of Bank of the South

Economy and Finance ministers from all South American countries, except for Peru and Colombia, are meeting Monday in Brazil to discuss final details of a regional development financial institution sponsored by Venezuela's President Hugo Chavez.

The meeting is to be held in Rio do Janeiro but Brazil's Economy minister Guido Mantega anticipated there will also be a formal meeting in the Itamaraty Palace which is the seat of the Brazilian Foreign Affairs ministry. Ministers from Argentina, Brazil, Bolivia, Ecuador, Paraguay, Uruguay and Venezuela plus Chile as observer, will be drafting a final document looking ahead to the official launching of the Bank of the South next November 3 in the Venezuelan capital, Caracas. The idea behind the initiative is that the Bank of the South becomes an alternative for multilateral credit organizations such as the International Monetary Fund, World Bank, International Development Bank to finance national and regional development projects. However there are some details to work out, basically Brazil's position which prefers preferential capital contribution and representation. Venezuela on the other hand favors an equal distribution of the bank's shares no matter the contribution volume of each country member. Brazil's cabinet chief Dilma Rousseff admitted differences in several points "but we're going to continue with an open spirit to wisely express our positions; we are contrary to any confrontation policy". Brazil's reticence at the beginning of the year was one of the hurdles for the bank, but last month President Chavez after holding talks with Argentina's Nestor Kirchner, Ecuador's Rafael Correa and Bolivia's Evo Morales announced the bank would begin operations in 2008. The bank was scheduled to being operations last July/August. The Bank of the South original capital was agreed in seven billion US dollars. Ecuador, a close ally of Venezuela's Chavez hailed the bank saying it would soon become the "world's largest financial institution" "We're starting with double the capital of the Inter American Development bank, when we pool all our international reserves we'll become the largest bank in the planet", said Ecuadorian Interior minister Gustavo Larrea. "It's a mistake not to have your own bank; they are paying us 2.2% for our international deposits and then charge us 12% for our foreign debt" underlined Larrea.