Transcript
THE ROLE OF THE BANK
IDB president Luis Alberto Moreno, the governor of Minas Gerais and other political representatives today began, discussions on Latin American financing and the role of development banks, at the IDB’s Annual Meeting.
According to President Moreno, multilateral development banks should ensure that markets and financial services are not only more stable and competitive, but also more inclusive:
“It’s important that financial services serve a large percentage of the population. In that sense, the IDB is supporting financial institutions with programs directed towards the poor.”
Multilateral financial institutions were first established to aid reconstruction in post-war countries.
But today, they do a lot more.
In the last 50 years, multilateral financial institutions have transferred more than 2.5 trillion dollars.
The IDB currently devotes more than 40% of its resources to investments that generate direct benefits to emerging economies. Its financing is devoted to programs that reduce poverty, increase social equality, strengthen civil society and reinforce democratic institutions.
The Bank also engages in environmental protection, modernization of financial systems, reduction of violence and promotion of social integration.
But Nobel Prize winning economist Douglass North said development cannot depend solely on a bank’s actions:
“Institutions are nothing more than incentive structures. They are incentive systems towards a certain behavior, and that structure defines the manner in which economic organizations and markets work, and how efficient or costly they are. But the economic market – and this is important – is created by political systems.”
For Latin America, development is an incentive – but also a responsibility.
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