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Mar 19, 2007

Moreno calls for contract for equality of opportunities for Latin America and the Caribbean

Region’s governments need to raise revenues to finance better social services and modernize public infrastructure, says IDB president

GUATEMALA CITY – Inter-American Development Bank President Luis Alberto Moreno today called on Latin America and the Caribbean to enter a contract to expand economic opportunities for the poor.

In a speech at the opening ceremony of the 48^th annual meeting of the IDB Board of Governors, which is taking place here this week, Moreno said that despite the recovery of growth in recent years, a majority of the region’s population has not seen any improvement in their living standards.

Moreno, who addressed Guatemala President Oscar Berger, Chile President Michelle Bachelet, El Salvador President Antonio Saca, Honduras President Manuel Zelaya, Belize Prime Minister Said Musa and delegates from the IDB’s 47 member countries, said Latin America’s main challenge in coming years will be to ensure that the benefits of progress reach every household in the region.

“It is intolerable that 205 million Latin Americans are living below the poverty line. Their plight demands that institutions and governments scale up their efforts on multiple fronts. We need solutions now for society’s most vulnerable, such as children, the elderly, and indigenous and Afro-descendent communities,” said Moreno.

Quoting the Popol Vuh, the sacred book of the Mayan Quiche people, Moreno noted that their maxim on solidarity was “let no one be left behind”.

This precept, which was adopted as the annual meeting’s motto, should inspire the IDB’s work, Moreno added. An apt case is the recent decision by the Board of Governors to cancel some $3.4 billion in debts owed by the five poorest member countries, Bolivia, Guyana, Haiti, Honduras and Nicaragua.

Solidarity is also reflected in social contracts such as tax systems. However, Moreno added, Latin America has one of the lowest levels of tax revenues in the world, which limits investments in social services such as education and in public infrastructure needed to reduce poverty and boost competitiveness.

“We need a contract that guarantees equal opportunity for all,” said Moreno. “To preserve a pro-growth economic environment, such a contract must include a fiscal pact aimed at raising revenues, and recognize what is a valid, fundamental principle in any society that aspires to equality: those who earn more, pay more.”

The IDB has put forward a new strategy to address the lack of opportunities for economic progress for the poor by emphasizing projects that focus their benefits on low-income groups, particularly in areas such as access to financial services, housing and basic infrastructure.

As an example Moreno mentioned a new initiative the IDB will soon launch to work with local governments interested in expanding coverage and improving the quality of water and sanitation services in poor communities.

Moreno also highlighted the issue of climate change, which poses risks as well as opportunities for Latin America and the Caribbean. On one hand such alterations may intensify the severity of certain natural disasters, diminish the availability of water or hurt rural productivity. On the other hand they also open the way for developing renewable sources of energy.

The IDB stands ready to assist borrowing member countries both mitigate risks stemming from climate change and capitalize of their comparative advantages to develop a biofuels industry, he said.

“Biofuels are an opportunity for the region to harness its natural resources in an activity that calls for new technology innovation centers, infrastructure investment, rural modernization and job creation,” Moreno said. “In this endeavor we should look to Brazil, a world leader in biofuels, not just to learn from its experience but also because of the importance of technology transfers between sister nations.”

In his speech Moreno paid tribute to the memory of Antonio Ortiz Mena, president of the IDB from 1971 to 1988, who died last week in his homeland, Mexico.

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