Venezuela, Argentina to establish 'Bank of the South'

During a visit to Venezuela, Argentinean President Nestor Kirchner signed an agreement with Venezuela's socialist President Hugo Chavez that will launch the "Bank of the South" (Bancosur) within four months, reported a February 22 article. Bancosur is part of the push, led by Venezuela, for Latin American integration to challenge US corporate domination. Chavez has promoted the bank as a source of cheap credit for countries in the region and a non-exploitative alternative to the First World-controlled International Monetary Fund (IMF) and World Bank.

The idea is for Latin American nations to place a portion of their foreign reserves into the bank, allowing it to make loans to countries in the region to assist them to pay off debts to the IMF or other private creditors. Bancosur will also aid state-led economic development and provide direct assistance to cooperatives and small and medium sized businesses.

The money would be made available without the neoliberal economic polices, such as the privatisation of state-owned industries and the ending of subsidies on basic goods, that are often demanded by the IMF and World Bank.

Already, Venezuela has pledged to place 10% of its foreign reserves into Bancosur. Ecuador has also signed an agreement to contribute to the bank.

Venezuela and Argentina also signed a series of cooperative agreements that trade oil for food. Argentina, for example, agreed to send Venezuela 10,000 tonnes of beef and 5000 tonnes of chicken. reported that trade agreements were signed in areas of agriculture, health, and technology, energy, communications and construction.

Venezuela also agreed to loan US$135 million to an Argentinean milk production cooperative. It will supply Venezuela with 15 million tonnes of milk over the next 12 years in return. Argentina agreed to assist with the construction of factories to produce agricultural machinery and gas-powered buses. Trade between the two countries is expected to have increased tenfold from 2003 by the end of 2007, according to