- Governments approve kicking off process to review IDB capital levels.
- Seminars, dialogues, exhibitions and debates mark IDB’s 50-year anniversary.
MEDELLÍN, Colombia – For nearly a week ending today, this picturesque and thriving city transformed itself into the economic epicenter of Latin America and the Caribbean.
Major roadways were decorated with banners announcing the 50th Annual Meeting of the Board of Governors of the Inter-American Development Bank. Chefs in restaurants wore aprons in honor of the event.
A live version of Colombian coffee icon Juan Valdez delighted visitors to the Plaza Mayor Convention Center. All in all, over 6,000 delegates – from artists and authors to investors, civil society representatives and journalists – took part in an agenda that included the role of youth in development to discussions on Latin America’s knowledge and technology gap.
But the focus was clearly the worsening economic situation. The Board of Governors, made up of top economic authorities of the IDB’s 48 member states, instructed Bank management to review the need for additional capital to give the IDB the tools to provide counter-cyclical as well as long-term development financing.
“For the IDB, the message is clear: let’s get to work,” Moreno told authorities on Monday’s closing ceremony of the Board of Governors.
Nobel Prize winner and Harvard Business School Professor Robert Merton summed up the economic situation: “It is bad, but it is not out of control.”
According to an IDB study made public during the Assembly, the global financial crisis will have a profound impact on the region, with average annual output of the seven biggest economies forecast to remain stagnant over the next five years, and potentially to fall 1.9 percent if rich economies take longer to recover.
The Annual Meeting activities kicked off March 25, with a day dedicated to youth activities. Moreno met with young coffee growers in the Salgar region. The IDB teamed up with MTV to launch a writing contest on development themes for Spanish-speaking youth. Five young authors – Edmundo Paz-Soldán of Bolivia, Jorge Franco of Colombia, Wendy Guerra of Cuba, Alberto Fuguet of Chile and Claudia Amengual of Uruguay – engaged an audience on writing.
The following day, attendees packed the Plaza Mayor main conference hall in the first regional forum on small and medium enterprises. Keynote speakers included Juan Enríquez Cabot, a recognized authority on the political and economic impact of life sciences. Cabot said the world was initiating a revolution in life sciences based on decoding the DNA of various life forms. Only countries that took advantage of this new wave of innovation will reap its biggest benefits, he said.
Latin American countries should ensure that their small firms become conversant in the new technologies emerging from life sciences so they may become the major corporations of the future. “If it could be done in India, it can be done in Argentina, Brazil, Ecuador, Mexico or Peru,” he said.
The Bank hosted four seminars. With China participating in the Annual Assembly for the first time, the Governor of the People’s Bank of China, Zhou Xiaochuan spoke about the challenges of our times. Other speakers included former IDB President Enrique V. Iglesias, the CEO of Intel Corp. Craig Barrett as well as several international experts, including sociologist Alain Touraine and journalists Moisés Naim and Michael Reid.
The Inter-American Investment Corporation (IIC), an IDB affiliate, launched its diagnostic tool for small and mid-sized companies in Colombia, in collaboration with nine local institutions.
Colombian President Álvaro Uribe inaugurated Expodesarrollo 2009, a business fair focused on development held on the sidelines of the Annual Assembly.
Representatives from 40 civil society organizations held a dialogue with Moreno and other senior Bank managers. The discussion ranged from accountability to the Bank’s recapitalization.
Former President Bill Clinton spoke about development challenges in a difficult economic environment on March 28, before an audience of 1,600. He urged people to donate more, noting that a child could be sent to school “for the cost of a good necktie.”
On the same day, the IDB launched the book Celebrating the past, building the future – Fifty years of development in Latin America and the Caribbean, which talks about five decades of ups and downs, achievements and contradictions in the region's economic life.
The Annual Assembly provided a backdrop for dozens of deal signings. Chinese financial institutions and the IDB inked a deal to provide trade and infrastructure funding. The Export-Import Bank of Korea and the IDB signed an agreement to co-finance public and private sector projects worth as much as $2 billion over the next three years. The Japanese government made a $5 million donation to an IDB-managed fund that promotes investments in economically and environmentally energy options
Geithner: We would like to see the IDB move further
One of the highlights of the inaugural ceremony of March 29 was a speech by U.S. Treasury Secretary Tim Geithner. “We would like to see the IDB move further,” he said. “To help address the region’s demand for finance this year and next, we encourage the IDB to expand its existing resources, alongside the World Bank and the other regional development banks.”
The Annual Assembly was wrapped up on Tuesday, March 31, in a seminar organized by the IDB and attended by Uribe as well as leaders of major corporations like Telefonica and Odebrecht. They noted that good investment opportunities existed, despite the crisis.
Dominican Republic Finance Minister Vicente Ignacio Bengoa Albizu urged nations to support a quick capital increase, and he called the IDB meeting in Medellin “its most important in 50 years.”
Moreno also summed up the sense of urgency that befell on Medellin. “Now, more than ever,” he told Governors during a closing address, “Latin America and the Caribbean need the IDB.”