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Aug 27, 2015

Canada and the IDB: Partners for Prosperity

For almost half a century, Canada has been a strong partner of the Inter-American Development Bank (IDB). It joined the IDB, the world’s oldest and largest regional development bank, in 1972. Yet Canada has been an IDB partner for much longer, first engaging the Bank in 1964 by creating the Canadian Fund with the equivalent of $47.2 million to support investments in physical infrastructure. Since then, Canada has proved a longstanding and reliable partner, working with the IDB through both its public and private sector windows to accelerate development in Latin America and the Caribbean (LAC).

It has contributed to six Canadian single donor trust funds since 1984, most recently establishing the Canadian Fund for Universal Legal Identity in LAC in 2014. It has also been a consistent and crucial contributor to IDB-managed multi-donor trust funds, joining global public and private sector leaders in supporting LAC through funds for Regional Infrastructure Integration Fund, Aid for Trade, Disaster Prevention, Gender and Diversity, Transparency Fund, and Citizen Security. Its lifetime trust fund contributions to date come to a tantamount $289.9 million, which have in turn leveraged millions more in financing from fellow donors.

In recent years, as part of its diplomatic strategy for the Western Hemisphere, Canada has continued to strengthen its links with its Latin American and Caribbean neighbors. Crucially, this support comes not simply in financing but also through the transfer of knowledge and learning. Canada, through such agencies as the Department of Foreign Affairs, Trade and Development Canada (DFATD) and Export Development Canada (EDC), has contributed unique expertise and knowhow to the region through secondments and other channels. For instance, these agencies facilitated public and private Canadian contributions to IDB knowledge products including the “Bridging Gaps, Building Opportunity” and “The Next Global Breadbasket” reports, which discuss broadband and food security, respectively.

In this vein, Canada broke new ground in 2015 by partnering with the IDB in the area of extractives, harnessing each partner’s respective strengths to ensure an innovative, effective, and responsible approach to extractives in LAC. With extractives becoming a pressing concern for the region, Canada’s long-term relationship with the IDB, as well as its and commitment to the sustainable and equitable development of the sector, make Canada an ideal first partner as the Bank addresses this challenging area. A look at 2014 alone exemplifies this partnership and Canada’s dedication to LAC’s economic and social progress. In just one year, the country committed more than $45 million through the IDB towards priorities including citizen security, civil registration, and transparency.

But to get a broader snapshot of the weight of Canada’s many contributions to the region, it’s important to look further back. Since 2008, Canada has contributed more than $5 million in reimbursable financing to such priorities as renewable energy and concessional finance. It has contributed nearly $200 million in grant financing to support infrastructure, development and competitiveness, and more. It has been a crucial partner to Haiti, providing tens of millions of dollars in grant financing over the past decade. In other sectors, including climate change and citizen security, Canada has shown equal leadership. Through its Climate Fund for the Private Sector in the Americas, Canada’s $204.6 million contribution (at 2015 conversion rates) is leveraging private sector funding to generate solutions and job creation. In citizen security, it is facilitating country-level and regional progress, uplifting violent communities in Jamaica and elsewhere.

Thus unsurprisingly, among the IDB’s 22 non-borrowing member countries, Canada is the third largest shareholder, contributing with just over 4 percent of its ordinary capital and providing valuable and strategic guidance on the Bank’s 14-member board of directors. Primary partners of the IDB in the Canadian government include the Canadian Trade Commissioner Service, and Foreign Affairs, Trade and Development Canada.

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