IDB looks to Caribbean, Latin America
CANCUN (AFP) – The Inter-American Development Bank (IDB) sought a boost in capital for increased lending to Latin America and the Caribbean as its annual meeting opened on Friday in Mexico.
The gathering of top bankers, finance officials and interest groups at the beach resort of Cancun, which lasts until Tuesday, was also under US pressure to cancel Haiti’s debt.
The bank needs additional capital because its lending capacity will start to significantly fall off next year, IDB President Luis Alberto Moreno said last week.
As the global financial crisis has increased demands for development lending, the IDB last year approved record financing of US$15.5 billion, up 38 per cent on the previous year.
Although some shareholders have agreed on raising the bank’s capital, the amount still needs to be decided.
The IDB’s ordinary capital — not all available for loans — is around US$100 billion.
Suggestions for the capital increase have spanned from a more likely US$50 billion, according to analysts, to as much as US$180 billion.
Washington supports a “robust” increase in the bank’s capital, US Treasury sources said on Thursday.
Some lenders are also seeking to modify the practices of the IDB and other multilateral institutions, in order to better assess their impact and reduce corruption.
The IDB said in a statement Friday that it sought to increase loans for poverty reduction from 40 to 50 per cent by 2015, and boost loans for climate change efforts from five to 25 per cent.
The possible cancellation of Haiti’s debt, of some US$447 million, in the wake of the devastating January 12 earthquake, was also on the agenda in Cancun.
The US Senate last week unanimously approved a resolution calling for easing Haiti’s debt burden to help with reconstruction, which could cost up to US$14 billion, according to the IDB.
The IDB comprises 48 member countries — 26 borrowers in Latin America and the Caribbean and 22 non-borrowing countries, including the main shareholder the United States, China, Japan and 16 European countries.
