José Miguel Insulza, Interior Minister for Chile, and IDB President Enrique V. Iglesias, unveil a bust of former IDB President Felipe Herrera Lane. Photo by W. Heinz

The fundamental relationship between citizens of Latin America and the broader society headed the agenda of seminar topics at today’s IDB Annual Meeting in Santiago, Chile.

"Politics is more than merely important for development," declared IDB President Enrique V. Iglesias in the opening session of the seminar "Good Governance and Development."

"It is crucial," he said.

The seminar, which was made possible through the support of the Swedish Fund for the Reform of the State, Governance, and Civil Society, is one of 16 being held in conjunction with the 42d Annual Meeting of the Boards of Governors of the IDB and the Inter-American Investment Corporation.

"After having worked very hard to reduce macroeconomic deficits and social deficits, we must now pay as much or more attention to the democratic deficit," said Iglesias.

Although the IDB formerly steered clear of politics in its lending operations, this has changed dramatically in recent years. Since 1994, said Iglesias, the Bank has approved more than 100 loans and technical cooperation financings aimed at strengthening the region’s democratic institutions.

In his presentation, Edmundo Jarquín, chief of the Bank’s State, Governance, and Civil Society Division urged a new way of looking at the link between democracy and development. "Poverty, inequality and underdevelopment have often been held to be a threat to democracy," he said.

"The above is correct," he said, "but not enough attention has been paid to the opposite relationship–that democracy is the fundamental condition to spur development and fight poverty and inequality." As a result, he continued, most analyses of Latin American development issues have focused on the absence of democracy as the cause of political instability and its effect on growth. But not enough attention has been paid to the need to achieve true democracy as a precondition to development.

Ethics takes the spotlight

In the seminar "Ethics and Development," IDB President Iglesias declared that the high levels of poverty and inequality in Latin America present serious ethical challenges. The situation become even more critical due the effects of globalization, he continued.

"We have globalization, but we do not have global rules to administer it, so that the benefits of new technology reach the population as a whole."

In a separate presentation, Bernardo Kliksberg, coordinator of the IDB’s Inter-American Institute for Social Development, said poverty is the central ethical challenge facing the region.

"The ethical question is fundamental for Latin America, which is considered the world’s most unequal region, where 58 percent of the children are poor, where 18 percent of mothers give birth without medical attention, and where one-third of families lack potable water," Kliksberg said.

Also taking place today were seminars on increasing the competitiveness of small and medium-side businesses and on civil aviation.

In a separate event, a ceremony was held for the unveiling of a bust of Felipe Herrera, the Chilean economist who was the first president of the IDB. The bust was placed in front of the Casa Amarilla, a part of the Mapocho Cultural Center Complex, which was originally the residence of the head of the railway station that formerly occupied the site.

For high resolution photos of the annual meeting, please see here.