A Message from the President

Building Opportunity
for the Majority

Almost a year ago, I had the honor and pleasure of opening the eighth Inter-American Forum on Microenterprise in Santa Cruz, Bolivia. That was one of my first public appearances as President of the Inter-American Development Bank (IDB), and I have come to believe that it was a suitable occasion to commence my tenure at the Bank.

The countries of our region face many challenges and difficulties, but none so critical as the struggle of millions of poor and marginalized citizens who enjoy very few options for creating and leading a dignified life. Although the Latin American and Caribbean region has experienced periods of economic growth and prosperity, there has been little or no improvement in poverty or inequality, resulting in social and economic exclusion for the majority of people. During my first year with the IDB, I have tried to focus on strategies that may address these problems. In June 2006, the Bank organized a conference on Building Opportunity for the Majority, which brought together many bright minds to discuss the challenges to be met and to identify the best and most practical options for helping the many people at the base of the economic pyramid.

Among the areas discussed, microenterprise development was emphasized as a dynamic and flexible mechanism for providing opportunities and prospects for the majority. With the recognition that microenterprises can contribute considerably to economic development comes the obligation to support them in any way possible.

The Bank has long acknowledged this obligation and has dedicated resources and funds for almost three decades to developing a vibrant and effective microenterprise sector in the region. Yet the supply of microfinance services is still inadequate relative to the potential market, particularly for rural households and agricultural producers.

Micro and small enterprises have a very high growth potential and their resourcefulness serves as a driving force for innovation. However, more firms need to generate higher-paying, better-quality jobs, and more workers need to be given the skills to access them. The firms themselves will find it difficult to grow in isolation, and increasingly will depend on linkages with other firms to fully take advantage of markets and new business opportunities.

The Bank has been committed to the microenterprise sector for a long time, but is now ready to take this commitment a step further and redefine its role in creating economic opportunities for all, accelerating and expanding the access of the majority to goods and services.

Many of the new activities that IDB is launching under its initiative Building Opportunity for the Majority will challenge more forcefully and effectively the historic lack of broad-based economic growth, which is needed to generate shared societal benefits in Latin America and the Caribbean.

To this end, IDB’s initiatives will call for the establishment of a Network for Innovation and Opportunity throughout the region. To directly benefit the microenterprise sector, the Bank will undertake to leverage the volume of microfinance loans in the region from US$5 billon to US$15 billion over the next five years, with private banks providing most or all of the money. It will also create a new US$1 billion lending program for small and medium enterprises.

In order to meet the challenges of this new initiative, IDB’s actions during the period 2007 to 2011 will focus initially on six priority areas, including: renewed focus on financial democracy, employment generation and entrepreneurship, basic infrastructure services, information and communication technology, housing, and basic identification documents. Each of these areas profoundly impacts quality of life for all at the base of the pyramid, and the quality and quantity of business for the millions of micro and small entrepreneurs in our region.

It is time to adopt a less macrobased approach and work to overcome obstacles that have prevented the majority from improving their quality of life.