Latin America, Caribbean progress to create new financial architecture

[Tabarnack]

Caracas, 19 May. AVN .- Finance technical delegations and ministers of Latin America and the Caribbean met last Wednesday in Caracas to debate joint initiatives to create a new financial architecture and strengthen the region ahead of future crisis.
First vice president of Venezuela"s Central Bank, Eudomar Tovar, said the information after the mentioned encounter, which took place in eastern Venezuela.
“This is particularly about finding alternatives to strengthen the regional financial architecture” by supporting initiatives such as the Bank of the South and the Bolivarian Alliance for the Peoples of Our America (ALBA).
Eduomar Tovar added:“We are living moments of change which need oxygenated organizations to allow us a progressive advance towards the national interests of each country.”
Also head of the commission for the Unitary System for Regional Compensatory Payments (SUCRE), Tovar expressed that the goal of this encounter -the fourth ahead of the Latin American and Caribbean Summit (CALC)- is “endorsing a document to mark the birth of the Community of Latin American and Caribbean States (CELAC),” which is expected to be created next July 05 in Venezuela.
The Ministers met in the above mentioned encounter expressed their will to take part on a mechanism such as CELAC, made by all Latin American and Caribbean countries without the hegemonic presence of the United States and Canada.
CELAC is expected to be born in Venezuela, reason why there have been carried out four preparatory meetings in Caracas, aiming at putting final touches to constituent proposals for the new agency in the social, economy, energy and environment issues.
Technical and ministerial debates in economic matters will continue this Thursday, during meeting over the international financial crisis and foreign trade.
About the issue, Tovar expressed that the declaration which would be signed today will take into account commercial exchange initiatives already implemented in the region through mechanisms as the Union of South American Nations (Unasur) and ALBA.
These modalities of commercial exchange have “aimed at facing the impacts of the international financial crisis.”
Regional agenda
Since early morning last Wednesday, technical delegations focused their debate on issues such as mitigation measures undertaken by each country to face the world capitalist crisis, possible answers to similar situations in the future and proposals to strengthen regulation mechanisms.
They also debated over reforming international financial institutions, as well as creating new entities and instruments such as the Bank of the South, the Unitary System for Regional Compensatory Payments (SUCRE) and a system for local currency payments.
In matters of foreign trade, the agenda included a debate over mechanisms to foster an exchange based on principles of complementarity, solidarity and cooperation.
Identifying measures to overcome difficult situations by taking advantage of interregional commercial accords and fostering cooperation programs in matters of training and exchange of experiences are also included on the agenda.
It is expected that the technical and ministerial commissions on finances sign a declaration this Thursday, with the attendance of Venezuelan Foreign Minister Nicolas Maduro and high-level delegations.


Agencia Venezolana de Noticias

[Tabarnack]

Bank of the South to Initiate Operations this Year

The Bank of the South (Banco del Sur) will begin operations this year, even before its formal constitution, the head of Ecuador’s presidential commission to design the new regional financial architecture, Pedro Paez, informed last Tuesday from Quito.

The proposal was raised byEcuadorand plans to carry out projects by means of a trust. “The proposal consists of a trust fund for each project”, said Paez, who detailed that there are plans, for example, to use funds from the Bank of the South to build a system of Latin American laboratories which guarantee healthcare for people throughout the region”.

This project in particular aims at producing generic medicines with the possibility of financing research regarding cures for diseases such as leishmaniasis, tuberculosis and malaria, which have not been treated by transnational pharmaceutical companies because “they are not profitable”.

There are other initiatives such as building micro-regional mills controlled by local producers and governments, connected by the Internet.

That plan aims at establishing a strategic reserve of basic food staples to ensure supplies for the population during extraordinary events such as droughts, earthquakes or floods.

Currently, the creation of the Bank of the South has been confirmed by the parliaments of Ecuador and Venezuela. The bank’s constitution is still pending the approval of Argentina, Brazil, Bolivia, Paraguay and Uruguay.

Chairman of the board of directors of Ecuador’s Central Bank, Diego Borjas, expressed that the regional entity should be officially created before the end of this year, once the remaining parliaments approve their incorporation.

“We hope that Uruguay, Bolivia and Argentina will solve this situation very soon”, Paez said.

The Bank of the South is an initiative of countries that comprise the Union of South American Nations (Unasur) and seeks to ensure regional economic independence in a continent that has suffered severely from dependence on international financial institutions, such as the World Bank and the International Monetary Fund (IMF).

The Bank of the South will eventually replace funding, loans and credits provided by the IMF, with direct financing from the region’s countries, based on a philosophy of integration, cooperation and solidarity. The bank’s founding principles prohibit the use of funds to indebt or inslave member nations, but rather to provide them with a platform for sustainable development and growth.

Venezuela Analysis