News Releases

Apr 3, 2006

IDB Annual Meeting opens with a call to increase region’s competitiveness and equity

Bank president will take moves to decentralize IDB and increase its responsiveness to needs of borrowing member countries

BELO HORIZONTE, Brazil -The Annual Meeting of the Board of Governors of the Inter-American Development Bank was inaugurated today with calls to restore and expand infrastructure in the region to enable it to compete in the global marketplace.

Speakers addressing the meeting's inaugural session also emphasized the need for the IDB and the region to close gaps between the rich and the poor so that all groups benefit from democracy and reap the fruits of development. Not doing so, they said, could create social and political turbulence that could threaten democracy and disrupt the movement toward economic reforms.

In his speech, IDB President Luis Alberto Moreno pledged that he will take steps to make the Bank more agile and decentralized to better enable it to help its borrowing member countries compete in the global economy.

“In the first place I want to promote a Bank that is closer to its clients, the people of Latin America, and I will foster its decentralization,” said Moreno. “Secondly, we will make the Bank more agile, reducing the time lapse between the approval and the disbursement of loans.”

Other priorities will be to boost IDB lending to the private sector and support regional infrastructure projects to help the region effectively integrate its economies.

In his address, Moreno also pledged continued support for programs to combat poverty and for working closely with subnational governments, such as provinces and municipalities, which are increasingly taking responsibility for social services such as education and health.

In this regard, Moreno announced an initiative that will be launched in a conference to be held in Washington, D.C., June 11-13, to expand benefits of development to the great majority of the peoples of Latin America and the Caribbean.

Honduran President José Manuel Zelaya Rosales said that the past three years of 5 percent growth are not enough to resolve long-standing problems of poverty. He lamented the gap between “growth and poverty and democracy and poverty,” saying that the “progress being achieved must be compared with goals that have not been achieved.”

“We have never had so much political democracy,” he said, “but the people are demanding more social and economic democracy.” He concluded that “poverty is a threat to democracy.”

Bolivian President Evo Morales said that his country’s indigenous majority must benefit from the nation’s natural resources or the result will be social conflicts. Referring to “500 years of plundering of our resources,” he said that the indigenous people now seek “not revenge, but justice.”

At the same time, he called for a strong private sector role as part of the solution for lifting 67 percent of his country’s people out of poverty. “In this process of change we need not just the support of our neighboring countries and international organizations, but also the private sector,” he said.

“But the private sector cannot be the owners of our resources, but partners,” he said. As such, he said, “they will be welcome.”

Similarly, he urged expanded trade, but on the condition that it would benefit the population, create jobs, help microenterprises, and not eliminate small producers.

Brazil’s Minister of Planning Paulo Bernardo, who was elected chairman of the IDB Board of Governors, also spoke forcefully for the need for equity and social inclusion.

“We need solid macroeconomic policies,” he said, “but this is not enough.” It is equally important to expand income distribution and to provide assistance to the private sector. “It is crucial of achieve social harmony in the region,” he said.

Paulo Bernardo also called for full-fledged assistance for Haiti “from all of the countries of Latin America and the Caribbean.”

Naokazu Takemoto, Japan’s senior vice minister of finance and outgoing chairman of the IDB Board highlighted the problem of income disparity in Latin America, which he said was greater than in Asia. He also noted the serious problems caused by lack of infrastructure, saying that it costs three times more to ship goods in Latin America than in industrialized countries.

Calling attention to the recurrent problem of natural disasters, he pledged $5 million over a three-year period to the Bank to finance programs for prevention and technical assistance.

In his welcoming address, Fernando Pimentel, mayor of Belo Horizonte, highlighted the “enormous inequities” that exist in the countries of the region, which he called “our biggest shame.”  He said that policies must always be “inspired by social justice.”

Also speaking at the inaugural session, Aécio Neves da Cunha, governor of the state of Minas Gerais, said that the region must not merely grow, but grow in such a way as to provide opportunities to all segments of society, drawing on new technologies and lessons from the past.

“To spend more than we have, or spend badly what have, is incompetent and irresponsible,” he declared, adding that the goal for the future is to create societies that are “more just, more equal, more cohesive.”

 The 47^th Annual Meeting of the IDB's Board of Governors is held jointly with the 21^th Annual Meeting of governors of the Inter-American Investment Corporation (IIC), the IDB affiliate that supports the development of small and medium-size firms in the region through equity investments and loans.

The boards of governors, the highest policy-making bodies of these institutions, include finance ministers, presidents of central banks and other senior officials of the 47 IDB member countries. Members include the 26 borrowing countries in Latin America and the Caribbean.

The 2007 IDB meeting will be held in Guatemala.

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