Venezuela and Russia Create Bi-National Bank

A delegation of Venezuelan officials led by Vice President Ramon Carrizalez met with Russian officials including former President Vladimir Putin in Moscow to create the bank and review the progress of ongoing bilateral projects.

The vice ministers of finance of the two countries, Dmitry Pankin of Russia and Gustavo Hernandez of Venezuela, signed the founding documents. The bank will invest primarily in energy and transportation projects.

According to Pankin, Russia’s Gazprombank and VTB will control 51% of the new bank, which has starting capital of $4 billion and is headquartered in Moscow. Venezuela’s state oil company PDVSA and its National Treasury will control the minority share.

“This bank will be able to genuinely act as the foundation of future cooperation between Russia and Venezuela,” said Pankin in a press conference on Tuesday.

“Our relations are advancing in an accelerated manner,” Vice President Carrizalez told the press.

Russia and Venezuela have strengthened their alliance by signing dozens of bilateral investment accords in recent years. Venezuela has purchased $4.4 billion worth of Russian military equipment since 2005 and last September Russia approved a $1 billion loan to Venezuela for future arms purchases.

Last November, Venezuela’s PDVSA and Russia’s Gazprom formed a mixed enterprise to drill for gas along the Venezuelan coast. The two countries have also discussed the joint construction of a nuclear power plant in Venezuela, and formed mixed enterprises for the exploitation of the Orinoco Oil Belt.

To facilitate these cooperation accords, the two countries have increased commercial flights and relaxed visa requirements.

Venezuelan Foreign Relations Minister Nicolas Maduro, who participated in the meetings in Moscow on Tuesday, said the deals represent “a new worldwide economic architecture.”

“Only a multi-polar world will be able to guarantee balance in international relations,” said Maduro.

Russia’s foreign relations minister, Sergey Lavrov, said, “The more cooperation mechanisms are established, the more stable the participating countries’ situations will be.”

Trade between Venezuela and Russia was worth $958 million in 2008, a slight decrease from 2007, according to Russian government figures.

Categorised in: Article

This post was written by James Suggett