Record IDB approvals, disbursements in 2009
Due to the financial crisis, which prompted countries to seek external help from big lenders, the Inter-American Development Bank (IDB) is reporting that it issued loans in 2009 at nearly twice the pace of the previous year to set a new record.
Loan assistance was close to US$12 billion, a 57 per cent increase, compared to US$7.6 billion in 2008.
Approvals reached US$15.9 million for 165 projects and programmes, up from US$11.2 billion.
IDB said its loans played a "counter-cyclical role" by providing financing to Latin American and Caribbean (LAC) countries in the face of the global economic crisis, putting the region in a position to grow in 2010.
Still, IDB president Luis Alberto Moreno said averting financial disaster was not to deny the suffering of millions, according to an IDB statement on his yearend report to the lenders' board of governors.
"We must not forget that for some 200 million people still living in poverty in Latin America and the Caribbean, the relative strength of macroeconomic policies or financial institutions in many of our nations is an abstraction with next to no impact on their living standards," he said.
"The fact that our economies are still standing after this crisis leaves us with no excuses," Moreno said, in a challenge to countries to shape policy to benefit the economically disenfranchised in their societies.
Better living conditions
The bank sees need to invest in areas such as early childhood development, as well as infra-structure that not only benefit business and boost productivity, but which also provide better living conditions for people.
The IDB this year also has its own financial well-being to consider, saying that even after its two years of restructuring to boost lending capacity, it must rebuild its capital base.
Otherwise, its potential to respond to its borrowing members would be substantially depleted a year from now.
"To continue providing similar levels of support and avoid a sharp drop in lending starting in 2011, the IDB will have to expand its authorised capital, which currently stands at US$101 billion," said the statement.
"Of that total, only about four per cent is paid in."
The rest consists of "pledges" from the 48 member countries.
A decision on how to address the bank's weakened position is expected by its annual general meeting set for Cancun, Mexico, in March.
Moreno said cities are likely to need extra assistance this year, as urban populations grow.
Four LAC cities, according to the IDB, have populations of 10 million or more, while 55 others have one-million populace.
The "urban explosion" has overwhelmed local governments' ability to address the needs of their citizens in areas ranging from public transportation to water and sanitation and security, the bank said.