Iran General NewsChavez to inaugurate development bank with Iran’s Ahmadinejad

Chavez to inaugurate development bank with Iran’s Ahmadinejad

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ImageBloomberg: Venezuelan President Hugo Chavez will meet Iranian President Mahmoud Ahmadinejad in Tehran before the two leaders inaugurate a joint development bank tomorrow with $200 million in starting capital.

By Matthew Walter and Daniel Cancel

ImageApril 1 (Bloomberg) — Venezuelan President Hugo Chavez will meet Iranian President Mahmoud Ahmadinejad in Tehran before the two leaders inaugurate a joint development bank tomorrow with $200 million in starting capital.

Chavez is on a tour of the Middle East and Asia this week, seeking to bolster economic ties and secure funding for oil projects. Iran and Venezuela are also studying the possibility of building two jointly owned refineries, Venezuelan Basic Industries Minister Rodolfo Sanz said, according to an e-mailed statement.

“This is part of a strategy to form a new financial architecture between us,” Chavez said today in comments broadcast by state television.

Venezuela may pursue similar joint development banks with Syria and Qatar, Chavez said. The socialist leader called for increased cooperation among South American and Arab countries at a summit yesterday, and said former U.S. President George W. Bush should be jailed for the war in Iraq.

Chavez cut spending last month and raised the sales tax to try to cover a budget deficit caused by the 67 percent plunge in crude oil prices since July. Venezuela depends on crude oil sales to cover half the government’s budget.

The Iran-Venezuela bank will eventually have $1.6 billion in capital, Sanz said. Aside from economic development funds, Venezuela is seeking capital to maintain oil production.

Venezuela, the fourth-biggest supplier of oil to the U.S., is courting China and Japan to land billions of dollars in energy investments, Oil and Energy Minister Rafael Ramirez said March 13.

The South American country needs $12 billion to develop natural-gas resources and $6 billion for Orinoco belt oilfields, the minister said.

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