Auction of painting by young artists during the IDB Annual Meeting. Photo by J. Inostroza

Representatives of IDB member countries today urged the Bank to act with flexibility and concentrate on the fight against poverty in Latin America and the Caribbean.

Bank governors from Austria, Denmark, Finland, France, Haiti, Israel, Italy, Panama, Netherlands, Portugal, Switzerland, Venezuela, and Costa Rica took the floor on the second day of plenary sessions of the IDB’s Annual Meeting of the Board of Governors at the Mapocho Cultural Center in Santiago.

Speaking in the name of the countries of Central America, Costa Rican Finance Minister Leonel Baruch expressed gratitude for the international support following hurricanes Mitch and Keith and the earthquake that struck El Salvador earlier this year.

He said that the Central American countries want to work more closely with the IDB to match loans needs of individual nations.

"We also believe that the conditionalities of loans should be drastically simplified," Baruch said. "It is necessary to emphasize meeting objectives. We join in seeking results and not getting unnecessarily tied up with conditionalities that indicate lack of confidence and often only confirm unjust stereotypes."

European governors expressed their support for the IDB’s participation in the international initiative to reduce the debt burden on the heavily indebted poor countries (HIPC). The countries in the region that qualify for HIPC benefits are Bolivia, Guyana, Honduras and Nicaragua.

The governors also urged the IDB to collaborate with the World Bank and the International Monetary Fund so that the economic policies of the middle income Latin American and Caribbean countries benefit the poorest and most vulnerable social sectors. At the same time they urged the IDB to continue working with borrowing countries to combat corruption with programs that guarantee transparency in the administration of public funds.

In another development today, five more countries joined the Inter-American Investment Corporation, the IDB Group institution that supports small and medium-size enterprises in the region. The IIC´s new members are Belgium Finland, Norway, Portugal, and Sweden.

The Annual Meeting was inaugurated Monday at a ceremony in the Diego Portales building with the participation of the presidents of Chile, Argentina and Uruguay; delegations from 46 member countries of the IDB; representatives of international institutions; diplomats; and special guests.

The first day of the meeting felt the impact of political developments in Argentina, whose government is making vigorous efforts to overcome a crisis of confidence.

During the inaugural ceremony, Chilean President Ricardo Lagos offered encouragement to his Argentine counterpart, President Fernando de la Rúa.

"One can only applaud the courage and the forceful decision, which we should all support, because what happens to Argentina affects us all," Lagos said.

President de la Rúa, who has convoked different political forces to form a "grand agreement of national unity" to confront the crisis, asked solidarity from Latin American neighbors.

"I take before this assembly my personal expression of confidence in my country, and I ask the world, the neighbors, friends, to give Argentina the confidence it deserves," he said.

De la Rúa used the occasion to confirm that former economy minister Domingo Cavallo, leader of the Acción por la República party, will join his cabinet.

Uruguayan President Jorge Batlle criticized the protectionist trade barriers that hurt exports of Latin American and Caribbean countries to industrialized nations.

"The things that we produce at a comparative advantage cannot be sold in the world markets because that those who ask for openness close the door on our people, thus preventing them from enjoying the fruits of their work," he said.

The United States, represented by Deputy Assistant Secretary of the Treasury William E. Schuerch, turned over the chairmanship of the Board of Governors on Monday to Chile, which will hold that position until the inaugural session of the Annual Meeting in Brazil in 2001.

Schuerch said in his presentation to the Board that President George W. Bush is committed to deepening ties between the United States and its neighbors in the Western Hemisphere.

"President Bush desires an equal partnership with all the countries in Latin America based on mutual respect and trust," he said.

The governors by acclamation elected Chilean Treasury Minister Nicolás Eyzaguirre Guzmán as the new chairman.

Eyzaguirre, in his address, said multilateral financial institutions needed more contingency credit mechanisms to support sound economies during crises of confidence.

The IDB, he said, should creatively use a wide range of instruments to meet the challenges, and to help borrowing country members overcome financial turmoil from abroad that can endanger development objectives.

IDB President Enrique V. Iglesias said in his inaugural speech that Latin America facethree great challenges in the new century: poverty reduction, increase in competitiveness, and consolidation of integration. (See Monday’s Today’s News for a full account.)

At the same time, he said the Bank will continue to support countries in the region in their efforts to promote equitable and sustainable economic growth, integration into the global economy and modernization of political institutions.

In other events

Ecuadoran Finance Minister Jorge Gallardo Zavala and IDB President Iglesias today signed documents for two loans totaling $17 million, one to support the national census, and the second the strengthen the capacity of the government to target social investments to relieve poverty.