MercoPress. South Atlantic News Agency

Brazil decides full support for the (development) Bank of the South

President Rousseff will send the bill to congress next month

The administration of President Dilma Rousseff will be sending the bill creating the Bank of the South to congress next month, since this financial institution “will help the region address the global crisis”.

“South America is already facing credit problems from the global crisis and to the Bank of the South initiative must advance much faster, because it will help solve several problems and will be a powerful tool to protect the region”, said foreign affairs presidential advisor Marco Aurelio García.

The bank initiative is supported by Argentina, Brazil, Bolivia, Ecuador, Paraguay, Uruguay and Venezuela that in September 2009 signed the constitution charter of the institution.

According to the charter the bank will have 20 billion dollars in resources and a subscribed capital of 10 billion dollars with an initial contribution from associates of 7 billion dollars.

Brazil will be participating with 2 billion dollars said García, although final numbers have yet to be decided.

The bank will help finance production lines with a regional basis which will help generate jobs and will reduce the “strong dependency of the manufacturing industries of South America”.

The political boost to the creation of the Bank of the South follows the growing doubts and dangers from the global crisis, who specifically mentioned the difficulties faced by the auto industries in Argentina and Brazil.

In both countries which have strong investments in the industry there is a “heavy dependence on imported auto-parts” which could be significantly reduced with an increased regional production through projects that could be financed by the bank, according to Garcia.

“We want to cut outer region imports and would like to see the auto parts regional market become a heavy international player in the area”, said the presidential advisor.

Garcia admitted that in spite the European Union has taken some steps to contain the global crisis, “concerns” and “doubts” persist as to the immediate future and the repercussion of those misbalances in South America.

“The region remains too dependent on developed countries so what ever happens there (EU) we won’t be free on consequences”, said Garcia.

The original idea of the bank is the brainchild of Venezuela’s Hugo Chavez as an attempt to cut dependency from international multilateral organizations controlled by the “rich imperialist” countries.

Brazil under Lula da Silva and with Brazil the darling case of Wall Street and international investors gave lip support to the idea, but working on the 2008/09 global recession experience and the current situation has changed position and Brasilia now decisively supports the initiative.