Venezuela to Quit IMF, World Bank

Venezuela will withdraw from the Washington-based lending organizations, the IMF and World Bank, in a symbolic move that distances leftist President Hugo Chavez from much of the international economic community.

Chavez, who plans to create an alternative lending bank run by South American nations and funded in part with his OPEC nation's high oil revenue, said on Monday Venezuela no longer needed the institutions dominated by U.S. "imperialism."

Leaving the International Monetary Fund and the World Bank would severs ties between the fifth largest oil supplier to the United States and the world's leading lenders to emerging nations.

"We don't need to be going up to Washington ... We are going to get out," Chavez, who calls Cuban leader Fidel Castro his mentor, said at an event to celebrate May Day workers' rights.

"I want to formalize our exit from the World Bank and the International Monetary Fund," he said.

Chavez blames the organizations' decades-old economic recipes of tight budget control, privatizations and open markets for continued poverty across Latin America.

He wants to build a socialist state based on policies rejected by the institutions in Washington, such as those he announced on Monday -- a 20 percent minimum wage hike and a gradual reduction in the working day to six hours.

The move to quit the multilaterals is politically symbolic but should have little immediate financial impact.

Debts Paid Off

Since Chavez first took office in 1999, Venezuela has gradually reduced its cooperation with the organizations and, after years of strong oil prices, said it paid off its last debts to the World Bank this month.

Venezuela is one of several countries, particularly in Latin America, that have in the last few years reduced their dependence on the multilateral agencies and so tempered the lenders' global clout.

Some leftist Latin leaders hosted by Chavez at the weekend proposed quitting a World Bank body that arbitrates between foreign investors and states as they seek greater freedom to dictate the terms of foreign investment in their nations.

Chavez is nationalizing huge swathes of the economy this year and on Tuesday will lead a massive rally to take over the operations of multi-billion dollar oil projects run by some of the world's largest companies.

He said it marked the end of an era of Washington-dictated policies and returned Venezuelan resources under the state's control.

"The wheel has turned full circle," he said.