Venezuelan President Hugo Chavez's efforts to curb the influence of the US in the developing world range from creating a leftist TV network for Latin America to selling cheap oil to his allies, but few of his projects were begun as enthusiastically as the Bank of the South.
Now, the fervor surrounding the Bank of the South, a project heralded here as a regional financing alternative to Washington-based institutions like the World Bank and Inter-American Development Bank, has cooled as Brazil seeks to diminish the new bank's clout.
Ahead of a meeting in Rio de Janeiro, Brazil, set for next month, at which the bank's creation is expected to be formally announced, Venezuela and Brazil have diverged on its base of operations, size, startup capital and mission, according to people briefed on the negotiations.
The diverging views of the project point to contrasts between Brazilian President Luiz Inacio Lula da Silva, a longtime socialist who embraced market-friendly policies once in power in Latin America's largest country, and Chavez, who favors a more assertive role for Venezuela's government in guiding economic policy here and elsewhere in the region.
Some sectors in Brazil are chafing at Chavez's ambitions to lead integration efforts. At the same time, tension persists over a spat between Chavez and Brazil's Senate over Venezuela's pushing a critical television network off its public airwaves -- a move many in Brasilia saw as stifling dissent -- and Chavez's recent criticism of the use of food crops to produce automotive fuels, a cornerstone of Brazil's economy.
"Brazil has demonstrated its conservatism in relation to Venezuela's thinking," said Vince McElhinny, a Latin America analyst at the Bank Information Center, a Washington group that tracks development banks. "A project that began with enthusiasm over egalitarian principles is dealing with Brazil's decisiveness in trying to limit its scope."
Venezuelan officials, who want the Bank of the South to be based in Caracas, have had to deal with Brazilian proposals to have it function from a smaller capital such as Montevideo, Uruguay, or Asuncion, Paraguay.
Also, Venezuelan ambitions for the bank to start operations with US$7 billion in capital have been countered by Brazil's more modest suggestion of US$3 billion.
Discussions around forming the bank have also focused on how many technical employees each country can nominate, whether financing should come from each country's foreign currency reserves and how transparent the bank's lending policies should be.
In addition, Brazil would prefer to limit membership to South American countries, while Venezuela wants to include Central America and the Caribbean, which would allow Chavez allies Nicaragua and Cuba to become shareholders.
"We want the bank to be tied to Unasur," Marco Aurelio Garcia, the international affairs adviser to Brazil's president, said in a telephone interview, referring to a fledgling intergovernmental union whose structure has yet to be determined.
"The negotiations involve the question of pace," he said.
Some countries, especially Bolivia and Ecuador, see the Bank of the South as a way to dilute the influence of the World Bank and IMF.
The conflict between Brazil and Venezuela over the bank is just one level of its obstacles. There are also critics of Chavez who note that Latin America already has native development banks that are flourishing. One is the Corporacion Andina de Fomento, based in Caracas and created in the 1970s. It has grown beyond its original focus on Andean countries, adding as shareholders Brazil and Spain and more than a dozen private banks in the region. Another is BNDES, the Brazilian development bank, whose lending already dwarfs that of the Inter-American Development Bank.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS