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Chavez: Venezuela to exit IMF, World Bank

President Hugo Chavez announced Monday he would formally pull Venezuela out of the World Bank and the International Monetary Fund, a largely symbolic move since the nation has already canceled its debts to the lending institutions.
/ Source: The Associated Press

President Hugo Chavez announced Monday he would pull Venezuela out of the World Bank and the International Monetary Fund, a largely symbolic move because the nation has already paid off its debts to the lending institutions.

“We will no longer have to go to Washington nor to the IMF nor to the World Bank, not to anyone,” said the leftist leader, who has long railed against the Washington-based lending institutions.

Venezuela, one of the world’s top oil exporters, recently repaid its debts to the World Bank five years ahead of schedule, saving $8 million. It paid off all its debts to the IMF shortly after Chavez first took office in 1999. The IMF closed its offices in Venezuela late last year.

Chavez, who says he wants to steer Venezuela toward socialism, made the announcement a day after telling a meeting of allied leaders that Latin America would be better off without the U.S.-backed World Bank or IMF. He has often blamed their lending policies for perpetuating poverty.

New lender?
Chavez wants to set up a new lender run by Latin American nations and has pledged to support it with Venezuela’s booming oil revenues. The regional lender, which he has called “Bank of the South,” would dole out financing for state projects across Latin America.

Chavez has criticized past Venezuelan governments for signing agreements with the IMF to restructure the economy — plans blamed for contributing to racing inflation.

Under former President Carlos Andres Perez in 1989, violent protests broke out in Caracas in response to IMF austerity measures that brought a hike in subsidized gasoline prices and public transport fares.

Enraged people took the streets in violence that killed at least 300 people — and possibly many more. The riots came to be known as the “Caracazo,” and Chavez often refers to it as a rebellion against the status quo.

During Sunday’s talks with leaders from Bolivia, Nicaragua, Cuba and Haiti, Chavez predicted that “sooner or later, those institutions will fall due to their own weight.”

“They will wear away — the International Monetary Fund, the World Bank and all those institutions,” Chavez said.

Bolivian President Evo Morales raised complaints about a World Bank body that mediates disputes between governments and foreign investors. He said governments never seem to win their disputes against transnational companies at the World Bank’s International Center for Settlement of Investment Disputes.

Chavez suggested that Latin countries could instead create their own arbitration body for disputes with big companies.

‘That prison’
Venezuela is not the only country in the region distancing itself from international lenders.

Nicaraguan President Daniel Ortega said Sunday that he hopes to “get out of that prison” of IMF debt and that “we are negotiating with the Fund to leave the Fund.”

Ecuador’s leftist president, Rafael Correa, recently asked the World Bank’s representative there to leave and said the country paid off its debt to the IMF. Argentina also has paid back billions of dollars to the IMF.