As North America slid into economic recession in September, Venezuela’s President Hugo Chavez met with fellow Latin American leaders ‘Lula’ da Silva, Evo Morales and Rafael Correa to discuss his Banco Del Sur (Bank of the South). Advocated by Chavez and launched in December 2007, Banco Del Sur is intended as a viable alternative monetary fund for Latin American development projects. Unlike the widely discredited International Monetary Fund (IMF) and World Bank, Banco Del Sur promises credit without structural or economic reform conditions, or the social disruptions characteristic of many Inter-American Development Bank (IADB)-funded projects. Argentina – which seven years ago defaulted on $9.8 billion of IMF loans – joined Banco Del Sur at Chavez’s request, along with Brazil, Bolivia, Ecuador and Paraguay.
One year on and Banco is still ‘in the cot’, not least because members have conflicting visions for it. Venezuela and Argentina anticipate the Bank’s involvement in regional monetary policy and balance of payments finance, while Brazil – which already has its own development bank – sees Banco Del Sur servicing Latin America’s Regional Trade Agreement, known as Mercosur.
