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Competitive Global and Regional Integration Strategy

On March 22, 2011, the IDB approved the Sector Strategy to Support Competitive Global and Regional Integration. The Strategy proposes to invest simultaneously in the software and hardware of integration to increase competitiveness and create jobs in Latin America and the Caribbean. The purpose of the Strategy is to increase and sharpen the Bank’s contribution to a competitive Latin America and Caribbean (LAC) global and regional integration. It provides the framework for the Bank to reach the 15 per cent target of annual lending in integration projects by the end of 2015, and to contribute to all dimensions of the regional development goals related to integration.

The central tenet of the Strategy is that the Bank needs to act simultaneously on the software (policy and regulatory frameworks) and the hardware (physical integration) of integration, ensuring coherence between national and regional interventions. Though software investments require fewer resources, they can make integration infrastructure more efficient and unlock investments in hardware. Focusing on the software-hardware continuum and strengthening the production of regional public goods will be crucial to retaining the historical comparative advantage of the IDB as LAC’s integration Bank.

The document concludes that the region needs to bridge two intertwined global and regional integration gaps:

  • seizing a fair share of global trade
  • deepening regional markets and functional policy cooperation. It needs to do so by focusing on:
  • an unfinished trade agenda that sill requires expansion, perfection and convergence of existing agreements
  • reducing logistics costs related to underinvestment in transport infrastructure, an inadequate transport mode mix, uneven regulatory frameworks, lack of trade facilitation at border crossings, all complemented by competitive integration of energy markets and reduction of the digital divide
  • expanding the provision of Regional Public Goods, harnessing the potential of South-South Cooperation

To support global and regional integration, the Strategy sets a framework under which the Bank will:

  • offer a wider range of financial and non-financial sovereign and non-sovereign instruments;
  • blend them more efficiently as to provide greater incentives for collective action;
  • engage client countries’ on integration at the highest executive level, particularly the Bank’s governors;
  • improve internal coordination. By deploying a smart-mix of instruments, the Bank will create the necessary incentives to promote integration in client countries.

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