The creation of Banco del Sur could work against economic goals of member states, economist Daniel Artana wrote in regional policy journal Americas Quarterly.
Artana said Banco del Sur, a regional bank established in September 2009 upon an agreement among Latin American states, lack what other multilateral banks already have, including high investment grade rating and allocation and contribution levels that consider income levels of member states.
“The very concept of Banco del Sur defies basic tenets of international lending and development. Should it ever come to pass, Banco del Sur will have a negative effect on the region’s development and credit worthiness and dearly cost its members,” said Artana, chief economist of Argentina-based research foundation FIEL.
Artana said major multilaterals like the International Monetary Fund, the World Bank, the Inter-American Development Bank and the Corporación Andina de Fomento, already provide lending service to Latin America and guarantee that richer countries contribute more while poorer countries are granted access to greater borrowing.