At a Dec. 9 ceremony hosted by outgoing Argentine president Nestor Kirchner in the presidential palace in Buenos Aires, the heads of six South American countries signed an agreement formally creating the Bank of the South, a development bank to be financed by South American countries to promote infrastructural projects and to aid companies from the region. Bolivian president Evo Morales, Brazilian president Luiz Inacio Lula da Silva, Ecuadoran president Rafael Correa, Paraguayan president Nicanor Duarte Frutos and Venezuelan president Hugo Chavez attended the signing. Argentine president-elect Cristina Fernandez de Kirchner was also present; she was to succeed her husband on Dec. 10. Uruguayan president Tabare Vazquez decided to skip the Dec. 9 ceremony and wait until Dec. 10 to sign the accord; his absence reflected strains between Argentina and Uruguay over the Botnia paper mill being built in Uruguay.
The bank was proposed by Hugo Chavez in 2004 and has been strongly supported by Rafael Correa as an alternative to financial institutions like the World Bank which are dominated by US and European interests. The founding countries have decided that each member country, whether large or small, will have an equal vote; administration will be by a council composed of the economy ministers of the seven founding countries. The headquarters will be in Caracas, with other offices in Buenos Aires and La Paz. (La Jornada, Mexico, Dec. 10)
The decision to form the bank comes at a time of strong growth in a number of Latin American countries. On Dec. 13 the United Nations’ Economic Commission for Latin America and the Caribbean (Cepal) projected that the 2007 annual growth rate for the region would be 5.6%. The strongest growth was in Panama (9.5%), Argentina (8.6%) and Venezuela (8.5%). Brazil, the region’s largest economy, was expected to grow at a rate of 5.3%. But Mexico, with the second largest economy, showed a rate of just 3.3%, about the same as Haiti’s. Only Nicaragua (3%) and Ecuador (2.7%) performed worse. Mexico, which has carefully followed US-promoted economic policies, may be facing even more problems in the near future. Cepal executive secretary Jose Luis Machinea indicated that Mexico would probably be the country most affected by a likely recession in the US next year. (LJ, Dec. 14)
From Weekly News Update on the Americas, Dec. 16
See our last report on Latin America’s alternative integration.