Bank has capacity to lend more than $40 billion to Latin America and Caribbean in the next five years
QUEBEC CITY, Canada - Inter-American Development Bank President Enrique V. Iglesias today presented the Summit of the Americas with a proposed portfolio of regional projects designed to meet the main challenges of the Western Hemisphere developing countries in the 21st Century.
The IDB initiatives are focused on priority areas for Latin America and the Caribbean: strengthening of democracy to consolidate governance, integration as a means to achieve economic growth, sustainable use of natural resources to protect the environment, development of human capital to reduce social disparities and promotion of Internet access to stimulate technological development of the region.
Iglesias said that the IDB has the resources, experience and comparative advantages to move ahead with the strategic objectives of the Summit of Americas, the assembly of heads of state and government representing 34 countries in the Western Hemisphere.
"The IDB is an institution that serves our peoples. It is an institution that in this century will consolidate efforts to concentrate on what we still dream and believe in: a region in which vigorous effort and solidarity bring us closer to the day when no one in Latin American and the Caribbean will be excluded or left aside by the process of development. This is our mandate, and this is our commitment."
Iglesias said the Bank, which is the leading source of multilateral financing for the region, will lend more than $40 billion in the next five years. According to the mandate of the Bank’s member countries, 40 percent of the financing must be dedicated to projects that will reduce poverty and social inequality.
Right now 43 percent of the IDB’s active loan portfolio of more than $49 billion is dedicated to social sector projects, such as education, health, urban development, social investment funds, microenterprise, potable water, sanitation and science and technology. No other multilateral financial institution has a greater proportion of its operations in social sectors.
In accordance with the Bank’s mandate, nearly 35 percent of the IDB loans have been awarded to the lesser developed countries of the region. These resources are largely channeled to social programs and to modernization of the state, areas where there is limited private financing.
Portfolio of regional projects
The portfolio of regional projects proposed by the IDB constitutes a contribution to advancing the Action Plan of the Summit of the Americas and will supplement traditional Bank operations.
The IDB recognizes the link between good government and development. Since 1994 the institution has emphasized operations to help borrowing member countries reform and modernize their governments to consolidate democracy.
In the coming years the Bank will promote a wide-ranging regional program that will include support for democratic governance, creation of a hemisphere network of legislative information, the establishment of the Justice Studies Center of the Americas, a project for violence prevention, and a training program for young democratic leaders.
The latter initiative will be carried out by the Organization of American States. It will train potential leaders in the organization and strengthening of the branches of government, civil society organizations, consensus-building in a framework of pluralism, and policy-making through broad consultations and citizens’ participation.
Since its creation in 1959 the Bank has supported initiatives for regional integration. It assisted the development of regional physical infrastructure and the efforts of its borrowing members to reduce the vulnerability of their financial systems. The institution has provided and will continue to provide financial and technical support for the negotiations for the Free Trade Area of the Americas.
The Bank proposes deepening these activities in the coming years as well as increasing its support for the implementation of international accounting and auditing standards in the Latin American and Caribbean financial markets, as well as modern corporate governance, securities regulations, and supervision of insurance and financial institutions.
In conjunction with other financial institutions, the IDB will support infrastructure integration plans as proposed by the governments of South America and the Puebla-Panama plan that will strengthen the ties between Mexico and the Central American Isthmus.
In the area of sustainable development, Bank operations will encourage borrowing member countries to improve environmental quality and management of natural resources. Among other regional initiatives, the IDB will support the project for a Meso-American Biological Corridor and a program for legal security and sustainable development of indigenous lands.
The IDB will place special emphasis on its new program to deal with natural disasters. For this purpose it will offer borrowing countries a new line of fast-disbursing credit to finance prevention and mitigation of risks of natural disasters. This initiative will encourage countries to include risk reduction in planning and investing in public works. At the same time it will promote the exchange of information on best practices to respond to emergencies and prepare efficient reconstruction plans.
Poverty and inequality are two of the most pressing social problems of the region. Although there has been a reduction in the level of poverty in several countries in recent years, this process is fragile and insufficient.
"A frontal attack on poverty should continue to be the central theme of our activity as a part of an ambitious social development agenda that mobilizes efforts to achieve greater equality in access to opportunities," Iglesias said.
The IDB will continue to support comprehensive strategies for poverty reduction drafted by borrowing countries to concentrate greater effort on behalf of those who have been largely excluded the most from economic development: the poor, women heads of households, youth, the elderly, disabled persons and racial and ethnic minorities.
These efforts will be backed by regional initiatives, such as the Program for Integrated Community-Based Projects for Excluded Groups, which will focus on helping indigenous communities, Afro-Latinos, and other marginalized sectors; the program for Dignified, Active, Productive and Healthy Aging; the Voluntary Youth Services of the Americas Program; the program for the prevention and treatment of AIDS; and the Inter-American Teacher Training Program.
The latter initiative will include distance training for teachers, especially at the secondary level, to improve education in mathematics, sciences, and languages for Latin American youth. Secondary education is now the weakest link in the region’s educational system, and demand is expected to accelerate in the present decade.
Information technology could become the key tool to achieve greater political, economic and social development. The IDB encourages programs designed to achieve greater access to these technologies and promotes wider Internet connectivity to reduce the so-called "digital divide."
The IDB will support efforts by countries to establish laws and regulatory systems that facilitate access to new technologies by the broadest economic and social spectrum of their populations. A program of telecommunications centers in rural areas will facilitate Internet access. Another program will apply new information and communication technologies to higher education in the region.
Finally, the Program for the Democratization of Informatics will train underprivileged youth in both information technologies and human rights. This initiative, to be carried out regionally, is based on a successful experience in a low-income neighborhood of Rio de Janeiro.