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South Bank, a project that marks the change on the continent

"The South Bank is the beginning of what we do, "described Nicanor Duarte Frutos, President of Paraguay, in the act of launching the regional financial institution. It was last night in the White Hall of the Casa Rosada, with Nestor Kirchner and Cristina Fernández as hosts. In addition to Paraguay, were the leaders of Brazil, Lula da Silva, Venezuela, Hugo Chavez, Bolivia, Evo Morales and Ecuador, Rafael Correa. The only absentee, with notice, was the Tabaré Vázquez, that only now add his signature to the founding charter of the credit agency. In a match full of praise crossed the empty chair was left clear demonstration of the deterioration of the relationship with Argentina. "It's the first time that South American countries have in hand the management of a financial institution of this kind," praised Lula, before Chavez spoke of "financial empowerment" and Correa urge the seven partners to repatriate the 250,000 million dollars of foreign reserves that together have invested in the core countries to leverage regional development.

Upon signing the founding charter remains a difficult stage. Ministers of Economy and Finance of the seven countries will meet in the next 60 days, a battery of key operational issues that will give the bank its final profile. The first is to determine how much each country will contribute and what the initial capital of the entity. In previous negotiations were considered different alternatives, ranging from 6000 to 10,000 million dollars. The number being stronger ending was 7000 million, but is not yet final. Argentina, Brazil and Venezuela integrate more than 50 percent of that amount, although it would set a schedule of five or more years to complete disbursements.

meetings in the next two months will also have to figure out what proportion of the loanable amount received by each country, to what extent it is tied to what they have contributed to the functioning of the bank and how many staff each nation sent to key agencies selection of projects to fund and analysis on the feasibility of such initiatives. Until now it was resolved that the highest decision-making body will be a Governing Council composed of ministers of Finance and Economy, within which each country shall be entitled to one vote. But that body will receive the recommendations of technical offices that will make an initial choice of projects.

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bank's head office is in Caracas and there will be two regional offices in Buenos Aires and La Paz. The partners have yet to choose who will be the first president. There are good chances of being an Argentine, while the second alternative is that the responsibility rests with a representative of one of the smaller countries. That is, it would be neither a Brazilian and a Venezuelan.

As it begins to operate, supposedly in two months, the Banco del Sur should prove a useful tool to finance development of the region and not merely a bureaucratic structure. But that is a challenge for later. The concrete at this point is that the creation of the entity reflects better than anything the times in the economic sphere. Just as the '90s were marked by the Washington Consensus and the uncritical reception of these recipes by most Latin American countries, the IMF as omnipresent instructor, this stage shows that the region seeks to regain autonomy in decision decisions. The accumulation of reserves in central banks is part of the process and another example of how these nations began to imagine solutions from within, upon confirming that the international lending agencies led to a worsening of his continuing problems with constraints.

One of the objectives of the South Bank is to build regional balance, that the poorest countries and major weaknesses in infrastructure can make a leap in its development. The institution must provide funding for that mission. The Minister of Finance of Bolivia, Luis Arce, said his country needs funds to grow the state oil company YPFB, to mining companies and other energy projects. "We are the hope and opportunity, as having received debt relief, the doors are closed to access credit from long-term market," he said. "The financial institution will be of great help to the region. No more dependence on international agencies to obtain credit for production, "the Paraguayan senator Alfonso González, president of the Mercosur Parliament.

Unlike the national development banks such as BNDES in Brazil, South Bank does not conduct its loans directly to businesses, but to finance projects submitted by countries. Then each nation will redirect resources as they see fit. Argentina would seek support to expand technology businesses. The project must be oriented to the productive development, infrastructure and social action. The president of Bolivia, Evo Morales, said the bank would also provide loans to public enterprises and social enterprises.

A central issue is that the recovery of claims is effective. If countries do not cancel the loan in a timely manner, the entity will lose weight and lending capacity. The bet is to consolidate the growth of economies, making based on infrastructure, expansion devices productive and social cohesion. "We need to stop financial dependence," summarized the Ecuadorian Correa. "There comes a time when we have much to do," he harangued. David Cufré


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