Colombian President Samper at opening ceremony (Photo: IDB)

Press releases from IDB¥s Annual Meeting in Cartagena

By Roger Hamilton, Cartagena

Calling education a "main political priority," Chilean Finance Minister Eduardo Aninat told delegates to the Board of Governor's 39th annual meeting that improvements in schooling will be "just as important to the region's future as the structural reforms in the economic sphere." He cited IDB figures indicating that raising average schooling by one year would raise average economic growth potential in the coming decade by 1 percent annually.

Representing the United States, Lawrence H. Summers, U.S. Deputy Treasury Secretary, called on the IDB "to more than double the share of new lending to primary and secondary education in the next three years--to more than $3 billion."

Summers also proposed the establishment at the Bank of a Special Fund for Hemispheric Education that would speed the education reform process already underway in a number of countries. The fund would provide loans and grants to "plug the gaps" in reforms--"when teachers are trained but have no books, when schools are built but have no teachers," said Summers. It would also finance the development of performance standards, programs to reach the very poor, rural people, minorities, and initiatives to be carried out on a regional level.

Other governors emphasized the importance of education in advancing the region into the 21st century, and urged the Bank to fully back the education initiatives that were to be announced at the Santiago Summit of the Americas in April (See the June issue of IDBAmÈrica for details on the expanded IDB role in this area.)

Also in Cartagena, the IDB's governors reaffirmed the Bank's mandates of poverty reduction, investments in social sectors and infrastructure, and support for the private sector and small business.

The board agreed to provide $1.15 billion in soft loans from the Bank's concessional lending window, the Fund for Special Operations, to the region's poorest countries for the next two years. It also agreed to provide $500 million in interest rate subsidies from the Intermediate Financing Facility during the same period.

A committee of the Board of Governors is expected to meet in the next six months to take a closer look at future policies for concessional financing as well as other Bank moves to increase the flow of resources to borrowing member countries and make operating mechanisms more flexible.

In another closely watched issue, several governors supported an IDB management proposal to increase direct lending to the private sector without government guarantees, from the present 5 percent of total loan approvals to 10 percent of the Bank's sustainable lending. A decision on this proposal is expected to emerge from a series of upcoming discussions on the Bank's future policies and programs.

The Board of Governors, the IDB's maximum policymaking body, is made up of finance ministers, central bank presidents and other senior officials from each of the Bank's 46 member countries. In addition to its annual meeting, a working committee of the Board of Governors meets occasionally to discuss specific issues.

The IDB meeting was held in conjunction with the annual meeting of the governors of the Inter-American Investment Corporation (IIC), a member of the IDB Group that invests in small and medium-sized businesses.

In Cartagena, the IIC's governors agreed to consider a capital increase that would enable the Corporation to expand its program of lending and equity investments.

In his summation of the meeting, IDB President Enrique V. Iglesias pointed to the optimistic climate that prevailed in Cartagena, which he said was primarily due to evidence that Latin America could withstand the worst effects of the Asian financial crisis, thanks largely to economic reforms pushed through in recent years.

Iglesias also highlighted the Bank's involvement in new areas such as violence prevention, citing recent IDB loans to support peaceful coexistence in Colombia and Uruguay. In addition, he noted Bank support for countries that are rebuilding after civil strife, such as Guatemala, and its funding of emergency relief in several countries for weather-related catastrophes caused by El NiÒo.

Finally, Iglesias emphasized the need for civil society to join with the public and private sectors in the region in planning and carrying out development projects. His remarks echoed the conclusions of a two day seminar on the role of civil society held in Cartagena before the start of the meeting.

The meeting was formally closed by Colombian Finance Minister Antonio J. Urdinola, in his role as chairman of the Board of Governors. He was followed by Rosita SolÌs, an African-American poet from Colombia's Pacific port city of Buenaventura, who delivered a whimsical interpretation of the week-long proceedings.

The next IDB annual meeting will be held in Paris, France.