Sunday, January 27, 2008

The Little Development Bank That Could

Hugo Chavez has now urged his Latin American allies to withdraw its reserves from U.S. banks, warning of a looming U.S. economic crisis. Chavez rhetorically asked, "Why does that money have to be in the north? ... You can't put all your eggs in one basket."

To help pool resources within the Caribbean/Latin American region, Chavez launched a new development bank at the meeting of the fledgling Bolivarian Alternative for the Nations of Our America (ALBA). The new regional trade alliance (the brainchild of Chavez) is intended to offer a socialist path to integration while snubbing U.S.-backed free-trade deals. The ALBA summit was attended by the presidents of four of the 36 independent countries in the Caribbean and Central & South America (Cuba, Venezuela, Bolivia, and Nicaragua). The highlight of the summit was the welcoming of its newest member: the 290-square-mile island nation of Dominica.

At the Chavez-organized meeting, Nicaraguan President Daniel Ortega criticized the U.S., saying "the dictatorship of global capitalism ... has lost control." Three days earlier, Ortega had shouted "Long live the U.S. government" as he inaugurated an American-financed section of highway in his home country.

It was announced that the new ALBA bank will be capitalized in the amount of $1- 1.5 billion. In comparison, the Inter-American Development Bank (which has the same goal of supporting Latin American and Caribbean development) is capitalized in the amount of $101 billion.

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