About the FLAR
Agreement for the Establishment of the Latin American Fund
The Governments of Bolivia, Colombia, Ecuador, Peru, and Venezuela
The Andean Reserve Fund has proven to constitute a valuable support for member countries in particular and for subregional integration in general; inasmuch as the Cartagena Agreement was subscribed to facilitate the integration of Latin America through the Latin American Free Trade Association (ALALC), and as of 1980 through the Latin American Association of Integration (ALADI).
It is essential that the Latin American region has its own financial institution which, through mutual cooperation, permits the solution of problems derived from external sector imbalances in the economies of member countries and at the same time facilitates the process of regional integration;
The joint administration of a Fund constituted with part of the international monetary reserves of the member countries may effectively contribute to the harmonization of their monetary, exchange, financial and payments policies; The cooperation between countries may be a means of channeling financial resources toward investments which will contribute to the development of regional trade;
The financing granted by the Fund to solve balance of payments problems of member countries may facilitate access by these countries to financial markets; Several Latin American heads of State and regional organizations have raised the possibility of expanding the Andean Reserve Fund activities to the Latin American level in view of its positive operating experience;
By virtue of the aforementioned factors, the administrative bodies of the Andean Reserve Fund have conducted a detailed analysis of the various proposals put forth with respect to the establishment of a financial institution to support the balance of payment needs of Latin American countries;
This analysis concluded that a feasible way to create a financial entity capable of providing substantial balance of payments support at the Latin American level would be to build on a well-established, functioning organization such as the Andean Reserve Fund; and for this purpose, it would be necessary to modify pertinent parts of the Andean Reserve Fund Agreement so as to permit the gradual incorporation of other countries from the region, while preserving the financial balance of the institution.
TAKING INTO ACCOUNT:
That the Assembly of the Andean Reserve Fund, in compliance with Article 20 (j) of the Agreement of the Andean Reserve Fund, has recommended pertinent modifications in said Agreement to the governments of member countries.
Through their Plenipotentiary Representatives to constitute the following:
LEGAL STATUS, HEADQUARTERS, OBJECTIVES