The 47th Annual Meeting of the Inter-American Development Bank (IADB) ends today, April 5, in Belo Horizonte, capital of the southeastern Brazilian state of Minas Gerais.
Representatives of the 47 countries that hold shares in the bank signed a document pledging to execute programs aimed at social equality, the reduction of poverty, and the development of private firms, especially small and medium-sized ones, which account for more than half the jobs in the region.
Immediately following the final plenary session, the president of the IADB, Luis Alberto Moreno, presented a document containing the deliberations of the meeting, including the creation of a committee to analyze pardoning five countries’ debts to the bank, the expansion of investments in the private sector and in infrastructure projects, and advances in the concession of loans in local currency.
For the first time the Interamerican Development Bank will make loans in local currencies. That removes the risk of dollar valuations which can make loans more expensive for borrowers.
The first loans in local currency by the IDB will be part of a protocol of intentions signed with the Brazilian government for its Procity (Procidade) program and will finance urban infrastructure projects.
Initially the program has a budget of US$ 450 million for projects in cities with populations of up to 200,000 inhabitants. Money will be spent on integrated urban development, transportation, highway systems, sanitation, social development and environmental management.
Minister of Planning, Paulo Bernardo, says the locations selected to participate in the program will begin receiving funds in six months.
The IADB’s final document emphasizes that all the programs should be monitored by the IADB’s shareholding countries. The bank’s annual report, which was presented at the meeting, shows that the economies of Latin American and Caribbean countries grew 4.3% in 2005, less than the 5.9% registered in 2004.
Nevertheless, according to the text, the majority of countries in the region added to their international reserves, and the need for foreign investments was "modest." Average inflation in Latin America dropped from 6.7% in 2004 to 5.5% last year.
Private companies will have more opportunities to vie for IADB loans. The bank, which currently lends only 3% of its available resources to the private sector, intends to raise this to the 10% already contemplated in the structure of the institution. Moreno regarded this measure as the biggest advance achieved at the 47th Meeting of the bank’s governors.
Since March 29 around 13 thousand people, including ministers of State and representatives of the IADB’s 47 shareholding countries, have been gathered at the Expominas Convention Center to discuss the future of Latin America.
Among the topics covered at the preparatory and plenary sessions are the use of clean energy sources, natural disasters, and the inclusion of youth in the policies of the bank.