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I. INTRODUCTION
ON December 9, 2007, in Buenos Aires, Argentina, the former president of Argentina, Mr. Nestor Kirchner, joined the presidents of Bolivia, Mr. Evo Morales, Brazil, Mr. Inacio Lula da Silva, Ecuador, Mr. Rafael Correa, Paraguay, Mr. Nicanor Duarte Frutos, and Venezuela, Mr. Hugo Chávez Frías, in signing the Bank of the South's Foundational Act ("Act")· The purpose of the Act is to create a development bank ("Bank of the South") to finance the economic and social development of its members, strengthen integration, reduce inequalities, and promote equitable distribution of investments among its members.12 As of 2008 Chile, Colombia, and Peru have decided not to join the new bank, though their incorporation may take place in the future, as some of the current members have disclosed.3
The Bank of the South's head offices will be located in Caracas, Venezuela, with two subsidiaries to be situated in Buenos Aires, Argentina, and La Paz, Bolivia.4 Originally proposed by Mr. Chavez as a Latin American monetary and financial alternative to the International Monetary Fund ("IMF") and the World Bank, creation of the Bank of the South was quickly supported by Argentina, Bolivia, and Ecuador. Brazil, Paraguay, and Uruguay later expressed their support.3
This paper analyzes whether the Bank of the South can be successfully implemented, considering the circumstances surrounding its creation and the differing interests of its members.5 I conclude that even though South America is experiencing a favorable economic period that ought to favor the creation of a regional financing tool like the Bank of the South, the different interests converging into the Bank of the South will likely impede its creation in a competitive and successful manner.
II. WHAT IS GOING ON IN LATIN AMERICA?
Latin America is undergoing an outstanding macro-economic period. In April 2008, the Inter-American Development Bank ("IDB") held its annual meeting in Miami, Florida. In his message to the gathering, the bank's president, Luis Alberto Moreno, noted that "despite the recent instability in international financial markets and the projected slowdown in the U.S. economy, the outlook for Latin America and the Caribbean is brighter than it has been in decades."6
The emergence of China and India in the global economy, and the robust economic performance of the United States and...