Banco del Chavez: Undermining Liberal Capitalism

The Banco del Sur is only the latest gambit in Venezuelan president Hugo Chavez's mission to pry Latin America away from international capitalism. The bank would be run by Latin American countries themselves and would play a role similar to those of the World Bank and the International Monetary Fund (IMF). By replacing the IMF as the primary lender in Latin America, Chavez undermines the liberal trade and investment policies that have benefited other countries in the region such as Colombia and Chile. The Banco del Sur is not in itself a poor idea. It has the potential to promote greater economic development in Latin America. However, the bank need not and should not replace the IMF. Such a move would be motivated by political rather than economic interests and would harm Latin America's economic prospects.