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CARACAS, Venezuela (AP) — Venezuelan President Hugo Chavez and three of his closest allies are teaming up to create a regional development bank intended to strengthen their alliance and promote independence from U.S.-backed lenders like the World Bank.
The bank is to be launched Saturday as Chavez hosts a summit with leaders from Nicaragua, Bolivia and Cuba — members of the Bolivarian Alternative for the Americas, or ALBA.
The left-leaning regional trade alliance is intended to offer an alternative, socialist path to integration while snubbing U.S.-backed free-trade deals.
The ALBA Bank will be started with $1 billion to $1.5 billion of capital, Venezuelan Finance Minister Rafael Isea said Friday, according to the state-run Bolivarian News Agency.
Venezuela, with its plentiful oil earnings, is expected to be the leading financier. The funds will go toward social programs and other joint efforts, from farming projects to oil ventures.
Chavez and the leaders of six other South American countries last month launched a similar venture, the Bank of the South, which is projected to have as much as $7 billion in startup capital and offer loans with fewer strings attached than those given by the World Bank or the International Monetary Fund.
Nicaraguan President Daniel Ortega said he believes the ALBA Bank will bring "mutual benefits." For instance, he said, Nicaragua's farm projects could "start supplying Venezuela with milk, with beef" — which could help Chavez's government stem recent shortages of such products.
The two governments Friday signed a series of accords, including one for "food security" under which Nicaragua pledged to help supply milk, corn, beans and beef to Venezuela.
"I want to thank Daniel and all of Nicaragua," Chavez said. "We still have to depend on a lot of imported foods."
In turn, Chavez's government is selling oil under preferential terms to Nicaragua and has sent the country fertilizers, tractors and electric generators.