Annual Meeting 2003- Today's News

A presentation by Brazilian Planning Minister Guido Mantega (center) on Brazil's economy and social programs was a highlight of the afternoon session. (Photo by Wilie Heinz)

Milan, Italy - The Annual Meeting was highlighted today by presentations by the IDB governors of Brazil, Colombia, Ecuador and Peru on the economic and social situation in their countries and projections for the future.

At the morning plenary sessions, Bank governors presented statements on economic and social conditions in their countries, offered views on regional development and set forth positions on IDB policies. Speaking were the governors for Belgium, Switzerland, Ecuador, Germany, the United Kingdom, Finland, the Netherlands, Bolivia, Denmark, and Sweden. A total of 3,570 persons have registered for the Annual Meeting to date.

In an afternoon briefing, Guido Mantega, Brazil's planning minister, presented an optimistic assessment of the results of the first three months of that country's new government and set forth ambitious goals for the future.

Among these results he cited reduced inflation, a re-establishment of foreign credit lines, an increase in the country's trade surplus, a reduction in country risk and an acceptable exchange rate in terms of the U.S. dollar.

He conceded that the international financial community initially had doubts over the ability of the new government to responsibly manage the economy. "All of these doubts have been dispelled," he said. "The international community has confidence in the new government."

Among the government's first moves were to prepare a tax reform program, which would have the effect of increasing the competitiveness of Brazil's exports, and a program to reform the social security system. Mantega predicted that both initiatives will gain passage.

A foremost priority for 2003 will be to reduce interest rates, he continued. "The Brazilian economy reacts quickly to changes in interest rates," he said, adding that the country currently has a serious shortage of credit.

Small- and medium-size businesses-the major generators of jobs--must currently pay 50-60 percent annual interest rates on loans, said Mantega, making it necessary for the government to help make up the credit shortfall.

Mantega set forth a series of medium-term goals for the Brazilian economy that included generating sustainable growth rates based on trade surpluses, increasing domestic savings and investment, boosting competitiveness through structural reforms and public and private investment, and policies of social inclusion and reduction of inequities in income distribution through implementation of social policies and growth in labor productivity.

The ultimate aim of the government's new policies is to improve social conditions, said Mantega. He said his government will get more results with the same resources in its social programs by increasing efficiency.

Briefings by Colombia, Ecuador and Peru

In his briefing, Colombian Finance Minister Roberto Junguito presented a series of indicators showing an increase in domestic and international confidence in the country's ability to guarantee internal security and carry out sound economic policies. In addition to recent backing from international finance organizations, the finance minister pointed to two recent bond issues that were well received by private investors.

In the area of public security, Junguito presented figures indicating a drop in the level of violence and an increase in vehicle use, which indicates that people feel increasingly safe to travel.

Although he said he was not satisfied with the overall performance of the economy, he singled out construction and manufacturing as sectors showing high growth. In addition, he said, consumption is on the rise, while unemployment is falling.

Maurcio Pozo, economy minister of Ecuador, described his government's program to reduce poverty through promoting macroeconomic stability and pursuing sustainable growth. According to Pozo, Ecuador has one of greatest growth potentials in the region. Foreign and domestic investment will be key to helping the country achieve its poverty reduction goals, he said.

Javier Silva Ruete, finance minister of Peru, presented his country's priorities for economic expansion and social development. Peru will host the 2004 IDB Annual Meeting.

Signing ceremonies

The Director General of the National Planning Office of the Dominican Republic, Fernando Mangual, and IDB President Enrique V. Iglesias today signed contracts for a $5 million loan to finance technical support for carrying out a pension reform that will broaden and deepen the Dominican social security system to cover vulnerable sectors of the population.

Bolivia's Finance Minister Javier Comboni Salinas and IDB President Iglesias signed the contract for a $2.5 million soft loan for an emergency support program for water production in the Sama-Tarija Biological Reserve. The resources will cover immediate costs to reactivate water services to the communities affected by a fire in the reserve and help them recuperate from environmental damage.

Costa Rican Finance Minister Jorge Walter Bolaños and IDB President Iglesias today signed the documents for a $6,355,000 innovation loan for a program aimed at reducing the impact of diseases and disabilities triggered by unhealthy habits and behaviors in the poorest areas of the country. Health promotion campaigns will be conducted to inform the public about risks of eating unhealthy foods, shirking exercise, alcohol, tobacco and drugs.

José Gasset Loring, president of Compañía Española de Financiación del Desarrollo S.A., of Spain, and Jacques Rogozinski, general manager of the IIC, signed a memorandum of understanding for a joint debt facility of up to $60 million to provide long-term loans to small and medium-size joint ventures located in IIC Latin American and Caribbean member countries.

Jacques Rogozinski, general manager of the Inter-American Investment Corporation, and José Luis Romero Hicks, general manager of Banco Nacional de Comercio Exterior S.N.C. de México signed a memorandum of understanding that lays the groundwork for joint action to foster the creation, expansion, and modernization of Mexican small and medium-size companies.

Also today, meeting participants attended the seminar "After the Washington Consensus: Restarting growth and reforms in Latin America."