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A new stage at the IDB

2023-01-23T09:32:14.840Z


A new stage at the IDB In these pages (October 19, 2022) I wrote that, after the necessary change in the IDB Presidency, the possibility of putting it back at the service of the peoples of its member states was open. The speech of the new president, Ilan Goldfajn, on January 12, gives hope in that direction. To focus the work of the IDB, he proposes three priorities: first, “social problems, including poverty, inequali


In these pages (October 19, 2022) I wrote that, after the necessary change in the IDB Presidency, the possibility of putting it back at the service of the peoples of its member states was open.

The speech of the new president, Ilan Goldfajn, on January 12, gives hope in that direction.

To focus the work of the IDB, he proposes three priorities: first, “social problems, including poverty, inequality…, health needs and food insecurity;”

second, climate, facilitating “investment in climate mitigation and adaptation;”

and third, “invest more in sustainable infrastructure, physical and digital, and increase productivity.”

This brings positive echoes from the beginning of the IDB, with the emphasis on infrastructure, then including telecommunications and electricity, on social programs, and on the participation of the private sector.

It also proposes a dialogue approach, considering that "in this moment of polarization and uncertainty, our future does not depend on being confrontational, but on being more collaborative."

All this shows a great difference with his predecessor, who never understood the need for the consensus required by the delicate balances of governance both among the member countries and within the IDB, between shareholders and the President.

Two final comments.

First, the history of the IDB is the result of a long dialogue between Latin America and the Caribbean and the US since the 19th century, later expanded with the other partners of the bank.

There were attempts to create a regional bank at the First Pan American Congress (Washington, 1889-1890);

and then in 1940, as part of the dialogue in the Americas against the war in Europe, when the creation of the "Inter-American Bank" (BI-A) was negotiated (although it did not materialize, its constitutive agreement served to create the World Bank and IMF, which are "children" of BI-A).

When the IDB was finally created, it differed from those institutions by maintaining a majority shareholding from developing countries;

In this sense, and as Enrique Iglesias always emphasizes, the peoples of LAC are owners of the IDB, not merely clients.

A second point, which I mentioned in the previous article, is Secretary Yellen's point at the recent annual meeting of the World Bank and the IMF.

She pointed out, correctly, that the biggest challenges are cross-border and that multilateral financing institutions have to reform to address these global problems.

But the IDB was created precisely with a mandate for individual and collective development of the member countries, following Raul Prebisch, Felipe Herrera and others who also saw the bank as an instrument of collective action for problems that the countries could not solve individually.

This function is added (and is perhaps the most relevant now) to those of financing;

knowledge generation;

and institutional strengthening.

The IDB President's speech points in that direction, but it is an issue that would require further development, both in the approach to common problems (in addition to those mentioned in the speech, others such as migration, money laundering and international crime, and strengthening of democracy), as well as in the mechanisms to operationalize said collective action (for which it would be useful to consider some precedents of the Alliance for Progress).

There is a lot of work ahead in LAC, but now there is also hope that the IDB will recover its historic role to help in the task of developing our peoples.

Eugenio Díaz-Bonilla is an economist, international consultant.


Source: clarin

All news articles on 2023-01-23

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