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IDB to present new development initiative for Latin America and the Caribbean

Inter-American Development Bank President Luis Alberto Moreno will hold a press briefing on Tuesday, June 6 to present a new initiative to promote economic opportunities for the low-income majority of Latin America and the Caribbean, a region where poverty and inequality levels have hardly changed over the past five decades.

At the briefing, which will take place at 3:30 p.m. at IDB headquarters (1300 New York Ave, NW, Washington, D.C., 12th floor, Cecilio Morales Room), Moreno will outline the Building Opportunity for the Majority initiative, which will guide a growing portion of the IDB’s lending and establish benchmarks and targets to measure its performance over the next five years.

Some 360 million people, or 70 percent of the population in Latin America and the Caribbean, have incomes under $300 a month, measured on a purchasing power parity basis, according to the World Resources Institute (WRI). While they constitute a $510 billion-a-year market, these neglected consumers and producers pay a “poverty penalty” that raises their living costs, stunts their productivity and limits their opportunities to accumulate assets.

Low-income people in this region lack access to running water, reliable electricity, good roads and safe transportation. Their homes tend to be precariously built on land they probably can’t prove they own. Their businesses are hobbled by a scarcity of credit and excessive bureaucratic requirements.

Moreno believes the IDB, as the leading source of multilateral financing for Latin America and the Caribbean, must work creatively with governments, the private sector and civil society to help more people move into the middle class.

To that end, the IDB will devote increasing amounts of its lending, which can rise to $8 billion a year, to finance innovative partnership projects in a few key areas where it may make a difference, such as enabling entrepreneurship and expanding access to affordable housing, basic infrastructure, microfinance and modern communication technologies.

In many cases, these challenges could be addressed by adapting to the public sector some of the strategies employed by businesses and non-profit organizations that are successfully serving clients or working with entrepreneurs at the base of the social and economic pyramid.

Building Opportunity for the Majority will be launched at a June 12-13 conference at the IDB. Presidents Evo Morales of Bolivia and Alvaro Uribe of Colombia have been invited to participate in the event. Bill Clinton, Jamaican Prime Minister Portia Simpson Miller, Honduras Cardinal Oscar Rodriguez, Telmex Chairman Carlos Slim, World Resources Institute President Jonathan Lash, Instituto Libertad y Democracia President Hernando de Soto and Nicholas Negroponte, founder of One Laptop per Child, will be the keynote speakers.

At the conference WRI’s Lash will present the results of his think-tank’s investigation of the purchasing power of low-income people in Latin America and the Caribbean and the “poverty penalty” this population endures. De Soto will present the Lima-based ILD’s survey of unregistered businesses, farms and urban properties in the region.

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