Americas Partnership-IDB Responsible Investment Forum 

November 2, 2023

Opening remarks - As prepared for delivery

Ilan Goldfajn, President

Inter-American Development Bank

Washington, D.C.

 

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Good morning! 

 

His Excellencies President Lacalle Pou; President Abinader; President Lasso; President Boric; President Chaves Robles; Her Excellency President Boluarte; the Honorable Janet Yellen, U. S. Secretary of the Treasury; and Senator Dodd:

Welcome to the Inter-American Development Bank – the IDB, or BID, for the insiders.

We’re thrilled to host this Responsible Investment Forum, on the occasion of the first Leaders’ Summit of the Americas Partnership for Economic Prosperity.

As leaders gather for the Summit, we’re encouraged by their efforts to rebuild the region’s economies – as Secretary Yellen says, “from the bottom up and middle out.”

Dear Excellencies, Madam Secretary, your presence here is a testament to your commitment to regional integration and your tireless work to improve the lives of people in the Americas.

 

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Latin America and the Caribbean continues to face challenges – a triple challenge of rising social demands, fiscal constraints and sluggish economic growth. 

Add climate change, and you can see why some regard these mounting challenges as overwhelming. 

And yet, our vision at the IDB is that Latin America and the Caribbean has a unique opportunity to be part of the solution to our shared global challenges.

So, the region is at a crossroads – a potential inflection point ­– at which its future could change if it seizes this unprecedented opportunity. 

 

Take three examples:

 

On clean energy:

The region can be a source of clean energy for the world. 

Indeed, already today, almost 30% of energy in Latin America and the Caribbean comes from renewable sources, double the world average. And in parts of the region, this percentage is much higher. 

Latin America and the Caribbean is also home to 2/3 of the world’s lithium and 38% of its copper, crucial to the green transition.

 

On nature and biodiversity: 

The region is an important player in preserving biodiversity and nature, especially in the Amazon, where we launched our Amazonia Forever umbrella program, based on a holistic framework.

The fact is the Amazon absorbs 1/4 of the CO2 absorbed by all land on the planet, mitigating climate change for the whole world.

 

On food security: 

Latin America and the Caribbean already produces enough food to feed 1.3 billion people, double its population. With the right reforms, it could do more to alleviate food insecurity in the region and globally.

So, Latin America and the Caribbean is part of solution to our biggest shared challenges: climate change, food insecurity and clean energy.

 

The opportunity is there, and it must be seized.

 

The IDB is well positioned to help the region leverage its comparative advantage and focus on a few important priorities.

In our current discussions on the IDB’s new Institutional Strategy, we're focusing on three priorities: social issues, including poverty and inequality, food security, education, and health; climate mitigation and adaptation, including the ambitious work for the Amazon; and bolstering sustainable regional growth.

We’re also helping countries strengthen institutional capacity and the rule of law. 

This is especially important because we don’t just need strong democratic institutions and legal stability for their own sake; we need them to build a robust private sector that powers investment and sustainable development.

 

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We’re excited about the synergies with the Americas Partnership and this Responsible Investment Forum.

The Americas Partnership for Economic Prosperity is an important initiative to promote shared goals through regional integration.

Regional integration is in the IDB’s DNA. As the region's leading development bank, we have a competitive edge in promoting integration. 

Regional integration expands markets, creates jobs, generates revenue and reduces poverty. It also helps us better address climate and pandemic shocks. 

Let me share one statistic on the benefits of regional trade integration: by liberalizing trade between 1990 and 2010, the region boosted per capita GDP by 40%. Virtually no other public policy can spark growth so effectively.

Integration goes beyond trade in goods and services. It has “hard” and “soft” dimensions, and we’re addressing both.

We’re promoting the type of physical integration that reduces costs and delays in the transportation of people and goods. We’re also investing in digital and telecommunications infrastructure to build the region’s digital economy. And we’re improving regulations and policies that enable and incentivize integration.

We’re also taking a holistic approach to integration by assuring worker protections via safety nets, pensions and healthcare, and by promoting the shared use and management of scarce resources, like water and energy.

 

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Integrating the Americas is key to building a more prosperous hemisphere.

We welcome U.S. leadership in establishing the Americas Partnership because trade and investment between the U.S. and the region creates opportunities for companies, consumers and workers.

Last year, trade between the U.S. and the region was $1.5 trillion. And each year, the U.S. exports over $720 billion in goods and services to the region, supporting nearly 2 million jobs. That’s about 20% more than what the U.S. exports to the European Union.

The benefits of this are felt across the United States: Latin America and the Caribbean is the largest or second-largest customer for goods from 40 U.S. states. And exports from the U.S. are projected to grow to $1.2 trillion by 2030.

And not only trade, but responsible investment. I’m talking about the type of investment that creates high-quality jobs and generates the environmental, social and governance outcomes that the region needs.

During the last three years, the U.S. was the largest source of FDI inflows to Latin America and the Caribbean – almost 40% of total investment flows, up from 26% in the preceding five years.

Over 3,000 American multinational companies have a presence in the region, through almost 20,000 affiliates in the IDB’s 26 borrowing countries.

We hope this Forum and leaders’ efforts at APEP will drive additional trade and responsible investment.

 

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At the IDB, we’re walking the talk on integration. 

We recently launched our BID for the Americas program. Through it, we’ll promote business opportunities and closer economic ties between the U.S. and the region. This will boost development impact, while giving U.S. investors a unique platform for expanding in the Americas. 

BID for the Americas has three pillars.

First, procurement: We’ll raise awareness among U.S. companies about the more than 30,000 contracts, worth over $4 billion, that the IDB finances each year. We see many opportunities for U.S. firms.

Second, trade and investment: we’re redoubling efforts to expand opportunities for U.S. firms through business matchmaking events and by connecting them to partners in the region.

Third, financing: we’ll organize investment forums and roadshows with co-financing partners, the U.S. government and financial institutions to promote investment opportunities in IDB and IDB Invest bond issuances and other innovative investment opportunities, including debt-for-nature swaps, blue bonds and social bonds.

IDB Invest, our private-sector arm, which finances over $10 billion in private-sector programs, and IDB Lab, our innovation laboratory and venture capital arm, will also make special efforts to reach out to U.S. companies and entrepreneurs.

So, let’s “bid” for the Americas! ¡Con el BID, para las Américas!

 

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Next year, the IDB assumes the presidency of the Heads of Multilateral Development Banks Group. We’re promoting reforms to build not just bigger banks, but better banks, that can achieve greater development impact, mobilize more capital and better promote regional integration.

That also includes deploying innovative financial instruments that redistribute risk, or re-risk, to incentivize private-sector investment and incentivize countries to achieve their goals.

IDB Invest will play a key role to unlock the region’s private-sector potential. 

In addition to mobilizing private capital, we’re committed to increasing our own lending capacity.

IDB Invest’s pathway to capitalization envisions a shift toward an impact-driven, originate-to-share business model. IDB Invest’s capitalization plans represent a new contribution from shareholders that could significantly scale up regional investment.

If you include IDB Invest’s capital increase plans, the IDB Group could potentially generate an additional $112 billion in financing over 10 years.

 

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Let me close by reiterating how committed we are to working with you to build a better integrated, more prosperous hemisphere – a hemisphere that can turn this inflection point into an opportunity.

We are convinced that the U.S. needs more of the region and that the region needs more of the U.S. 

So, please join us! I look forward to hearing your ideas about how we can do this, together.

 

Thank you!