TEHRAN (Reuters) – Iran and Venezuela opened a joint bank yesterday to develop economic projects, Iranian state television reported.

The Tehran-based Iran-Venezuela bank, which was inaugurated by visiting Venezuelan President Hugo Chavez and Iranian President Mahmoud Ahmadinejad, has an initial capital of $200 million with each country providing half.

“The capital will be raised to 1.2 billion dollars with the aim of supporting joint economic, industrial and mining projects as well as accelerating the ongoing projects,” the state television said.

Chavez, who arrived in Tehran on Wednesday for an official visit, accused the United States and Britain of being “the most guilty” for the international economic crisis because of the financial model they had imposed.

“The values of capitalism are in crisis and capitalism has to end,” the television quoted Chavez as saying at the inauguration ceremony.

“We must take a transitional path to a new model that we call socialism.”

Chavez and Ahmadinejad, both ex-military officers known for their anti-US rhetoric, have strengthened economic and political ties. Chavez is on his seventh trip to Iran since Ahmadinejad was elected in 2005.
Chavez criticised the G20 summit in London, saying the International Monetary Fund (IMF) must be eliminated, the official IRNA news agency reported.

During the summit, leaders from the Group of 20 industrial and developing countries promised $1.1 trillion to combat the economic downturn.

“Iran and Venezuela should be the model for a type of brotherly and constructive relationship for other countries in the world,” state television quoted Ahmadinejad as saying.

Iranian media said Iran and Venezuela would also sign a Memorandum of Understanding to build a pair of oil refineries, one in each country.

The world’s No. 4 crude oil exporter, Iran lacks the refinery capacity to produce enough gasoline for domestic consumption.