Identifier
Created
Classification
Origin
07LAPAZ793
2007-03-22 14:39:00
CONFIDENTIAL
Embassy La Paz
Cable title:
BANK OF THE SOUTH: FREE LUNCH FOR BOLIVIA?
how-toVZCZCXYZ0018 PP RUEHWEB DE RUEHLP #0793 0811439 ZNY CCCCC ZZH P 221439Z MAR 07 FM AMEMBASSY LA PAZ TO RUEHC/SECSTATE WASHDC PRIORITY 2927 INFO RUEHAC/AMEMBASSY ASUNCION 6659 RUEHBO/AMEMBASSY BOGOTA 3984 RUEHBR/AMEMBASSY BRASILIA 7870 RUEHBU/AMEMBASSY BUENOS AIRES 5125 RUEHCV/AMEMBASSY CARACAS 2349 RUEHPE/AMEMBASSY LIMA 2464 RUEHMD/AMEMBASSY MADRID 3392 RUEHMN/AMEMBASSY MONTEVIDEO 4505 RUEHQT/AMEMBASSY QUITO 4991 RUEHSG/AMEMBASSY SANTIAGO 9575 RHMFISS/HQ USSOUTHCOM MIAMI FL RUMIAAA/USCINCSO MIAMI FL RUEHUB/USINT HAVANA 0232 RHEHNSC/NSC WASHINGTON DC RHEBAAA/DEPT OF ENERGY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEATRS/DEPT OF TREASURY WASHINGTON DC
C O N F I D E N T I A L LA PAZ 000793
SIPDIS
SIPDIS
STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW
E.O. 12958: DECL: 03/21/2017
TAGS: EAID ECON EFIN EINV PREL BL
SUBJECT: BANK OF THE SOUTH: FREE LUNCH FOR BOLIVIA?
REF: LA PAZ 679
Classified By: Ecopol Counselor Andrew Erickson for reasons 1.4 (b) and
(e).
-------
Summary
-------
C O N F I D E N T I A L LA PAZ 000793
SIPDIS
SIPDIS
STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW
E.O. 12958: DECL: 03/21/2017
TAGS: EAID ECON EFIN EINV PREL BL
SUBJECT: BANK OF THE SOUTH: FREE LUNCH FOR BOLIVIA?
REF: LA PAZ 679
Classified By: Ecopol Counselor Andrew Erickson for reasons 1.4 (b) and
(e).
--------------
Summary
--------------
1. (C) President Morales announced on March 11 that Bolivia
would join the Bank of the South. Central Bank President
Raul Garron told the Ambassador that the Central Bank has not
committed to providing any contributions to the Bank of the
South. Inter-American Development Bank Resrep Joel Branski
told Emboffs that the Bank of the South would offer market
rates similar to those of the Andean Development Corporation,
rather than concessional lending. End summary.
2. (C) In El Alto on March 11, Venezuelan President Hugo
Chavez and President Evo Morales signed an agreement
providing that Bolivia would join the Bank of the South, an
initiative started by Venezuela and Argentina (reftel). The
press reported on March 20 that the Bank would have an
initial capital of USD 7 billion, half of which would be
provided by Argentina. According to the press, Ecuador would
provide another USD 50 to 100 million.
3. (C) Bolivian Central Bank President Raul Garron told the
Ambassador on March 21 that he thought the Bank of the South
would provide healthy competition to the Andean Development
Corporation and the Inter-American Development Bank. He
indicated that Bolivia would be delighted to participate in
the Bank if it meant no cost to Bolivia and greater access to
cheap capital. He noted that the Central Bank has not agreed
to provide any financial contributions to the Bank of the
South. He said that committing Central Bank funds would
require the government to pass a law. (Note: The media had
reported that each member state would have to kick in 10
percent of its international reserves as an initial capital
contribution to the Bank. If true, this would amount to USD
350 million for Bolivia. End note.)
4. (C) Inter-American Development Bank (IDB) Resident
Representative Joel Branski told Emboffs on March 21 that
Venezuela and the southern cone countries were flush with
reserves and could feasibly create a serious bank that would
compete with the IDB. According to Branski, the Brazilian
Ambassador said that Brazil was not in favor of the Bank, but
would enter if the Bank was created so as not to be left out
of the "club." Branski asserted that the Bank would offer
market rates similar to the Andean Development Corporation,
and not the concessional lending for which Bolivia was hoping.
GOLDBERG
SIPDIS
SIPDIS
STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW
E.O. 12958: DECL: 03/21/2017
TAGS: EAID ECON EFIN EINV PREL BL
SUBJECT: BANK OF THE SOUTH: FREE LUNCH FOR BOLIVIA?
REF: LA PAZ 679
Classified By: Ecopol Counselor Andrew Erickson for reasons 1.4 (b) and
(e).
--------------
Summary
--------------
1. (C) President Morales announced on March 11 that Bolivia
would join the Bank of the South. Central Bank President
Raul Garron told the Ambassador that the Central Bank has not
committed to providing any contributions to the Bank of the
South. Inter-American Development Bank Resrep Joel Branski
told Emboffs that the Bank of the South would offer market
rates similar to those of the Andean Development Corporation,
rather than concessional lending. End summary.
2. (C) In El Alto on March 11, Venezuelan President Hugo
Chavez and President Evo Morales signed an agreement
providing that Bolivia would join the Bank of the South, an
initiative started by Venezuela and Argentina (reftel). The
press reported on March 20 that the Bank would have an
initial capital of USD 7 billion, half of which would be
provided by Argentina. According to the press, Ecuador would
provide another USD 50 to 100 million.
3. (C) Bolivian Central Bank President Raul Garron told the
Ambassador on March 21 that he thought the Bank of the South
would provide healthy competition to the Andean Development
Corporation and the Inter-American Development Bank. He
indicated that Bolivia would be delighted to participate in
the Bank if it meant no cost to Bolivia and greater access to
cheap capital. He noted that the Central Bank has not agreed
to provide any financial contributions to the Bank of the
South. He said that committing Central Bank funds would
require the government to pass a law. (Note: The media had
reported that each member state would have to kick in 10
percent of its international reserves as an initial capital
contribution to the Bank. If true, this would amount to USD
350 million for Bolivia. End note.)
4. (C) Inter-American Development Bank (IDB) Resident
Representative Joel Branski told Emboffs on March 21 that
Venezuela and the southern cone countries were flush with
reserves and could feasibly create a serious bank that would
compete with the IDB. According to Branski, the Brazilian
Ambassador said that Brazil was not in favor of the Bank, but
would enter if the Bank was created so as not to be left out
of the "club." Branski asserted that the Bank would offer
market rates similar to the Andean Development Corporation,
and not the concessional lending for which Bolivia was hoping.
GOLDBERG