News Highlights
Seminar participants call more infrastructure development key to competitiveness
The IDB promotes more public-private associations and proposes a tripartite fund
Latin America must improve its business climate and increase investments in physical infrastructure to avoid falling behind other emerging regions of the world, said experts at a seminar today.
Latin America is experiencing a generalized retreat in infrastructure investment, said Carlos Guimaraes, the IDB’s private sector coordinator. He added that other regions of the world have increased their investment in the sector as a percentage of their gross domestic product.
“This means that we are growing more slowly,” he said, both due to deficiencies in infrastructure per worker as well as in loss of markets to competing regions that can produce and deliver goods more rapidly than many countries in the region.
In 2005 total infrastructure investment in Latin America totaled $47 billion, which represents some 2 percent of the region’s GDP, while rates of such investment in China and other Asian and Eastern European countries are triple that.
In 1980, Latin America and the Caribbean had 40 percent more infrastructure than the so-called Asian Tigers, according to Antonio Vives, manager of the IDB’s Sustainable Development Department. In 2000, these latter countries had a 70 percent advantage.
Everett Santos, president of the Latin American Investment Fund, discussed some of the obstacles to higher infrastructure investment, among them the high risk of political interventions that would effect the profitability of private investments, uncertainties in the judicial and regulatory arenas, exchange risks, the low level of development of local capital markets, and in some cases, inflation.
Another roadblock to increased private sector participation in infrastructure development in Latin America is citizen opposition to privatization despite advantages in lower costs, broader coverage, access and efficiency, added Santos.
Other speakers in the conference included Diana Mondino, former Latin American director for Standard and Poor’s, Nicholas Stern, economic advisor to the government of Great Britain, and Demian Fiocca, president of Brazil’s nacional development bank BNDES.
The IDB is helping to create a tripartite infrastructure fund with resources from the IDB, donor countries and private companies.
The IDB applauds the creation of the Brazilian Carbon Market
Addressing the problem of global climate change is one an IDB priority, and the creation of the Brazilian Carbon Market is a “giant step” forward, said Antonio Vives, manager of the Bank’s Sustainable Development Department at the start of a seminar on the subject.
The seminar participants discussed the role of agro-energy and the carbon market in efforts to achieve sustainable development and to present some of the instruments that the Brazilian Carbon Market will use to promote carbon substitution projects in Latin America.
“For us this brings together two very important elements,” said Vives. He explained that the sale of carbon credits and their purchase by the developed countries is not development assistance in the traditional sense, but nevertheless enables the countries to obtain resources to carry out projects that can help improve the standards of living and quality of life of our peoples.
The Brazilian Carbon Market (MBRE) is a joint initiative between the Brazilian Mercantile and Futures Exchange and the Brazilian Ministry of Development, Industry and Foreign Trade. Its main objective is to develop an efficient trading system for certified emission reductions aligned with the principles underlying the Kyoto Protocol. The first stage of the Brazilian Carbon Market launched in mid-September 2005 was the implementation of a Carbon Facility, which will register projects. The second stage of the organization of the Brazilian Carbon Market, which entails the establishing a carbon credit trading environment in the option, forward and spot markets. This phase will be gradually implemented towards the end of 2005.
Loan for roads program signed for Peru
Minister of Finance Fernando Zavala Lombardi and IDB President Luis Alberto Moreno today signed a $50 million loan to support a $200 million program designed to improve secondary roads as part of the country’s decentralization process.
In the program, the country’s 24 regions that will sign agreements with the Ministry of Transport and Communications to improve their ability to rehabilitate and main roads and environmental, technical and managerial standards. The regional governments will adopt specific standards of planning, citizens’ participation, maintenance, outsourcing to microenterprises and environmental and social protection, as well as using their own resources to support the program to help ensure its sustainability.
Key figures engage in dialogue on Latin America’s future
A group of senior-level participants at the Annual Meeting met in the evening for a public dialogue that both honored the region’s past and looked into the future.
The event featured an homage to Juscelino Kubitschek, former Brazilian president (1956-1961) and widely considered the architect of modern Brazil. Nicknamed the “Bossa Nova President,” Kubitschek was also as former mayor of Belo Horizonte and governor of Minas Gerais. Participants in the dialogue viewed a video commemorating him.
A new IDB award was announced to honor leaders in efforts promote development in Latin America and the Caribbean.
Speakers during the following discussion included Hondura President José Manuel Zelaya Rosales, IDB President Moreno, Minas Gerais Governor Aécio Néves; Marco Aurélio de Almeida García, who represented the Brazilian president, and Andrés Bajuk, finance minister of Slovenia and IDB governor.
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