Special report: Yearender 2007

    MEXICO CITY, Dec. 28 (Xinhua) -- Latin America has witnessed significant progress in its integration efforts in 2007 as the Bank of the South was officially launched, but problems and difficulties still lie ahead.

    BANK OF THE SOUTH, A REMARKABLE PROGRESS

    Formally founded in the Argentine capital of Buenos Aires on Dec. 9, the bank groups seven South American countries, namely, Brazil, Argentina, Venezuela, Uruguay, Ecuador, Bolivia and Paraguay.

    Initiated by Venezuelan President Hugo Chavez and his former Argentine counterpart Nestor Kirchner in 2006, the bank is designed to provide financing for the region's economic growth.

    If the seven countries get the approval of their respective legislatures within 60 days, the bank will start operation in 2008.

    The bank's establishment is regarded as one of most remarkable progress in the decades-long integration efforts of the region. This will give the region its first ever autonomous financial institution. The bank adopts one-member-one-vote system, rather than fashions its voting structure after the International Monetary Fund (IMF) and the World Bank where voting power depends on the amount of capital each member contributes to the institution's capitalization allotments.

    "The bank will be a tool that strengthens financial autonomy of South America, as it is the first bank really controlled by the nations of our continent," said Brazilian President Luiz Inacio Lula da Silva.

    Terming the bank as "a step forward along the road to Latin America's integration," Ecuadorian President Rafael Correa said "the long and sad neo-liberal night, which made our central banks completely subject to the IMF and the World Bank, is ending."

    Correa's remarks reflected the deep misgivings among Latin America counties about those international financial institutions, especially the IMF, which demanded Argentina's adoption of stringent financial policies in exchange for loans when the country was plunged into an economic crisis in the 1990s.

    The move, however, failed to help Argentina out of the crisis. It only made Latin American governments reluctant to seek aid or credit from the IMF, and highlighted to them the need to break their dependency on these international financial bodies. A better choice would be setting up an alternative body that ensures the active participation of all members in the decision-making process. That is precisely the mission of Bank of the South.