IDB President tags crime, corruption as challenges region must address

- provided more than $1B for private sector projects in 2011

Against the backdrop of having approved financing for projects in the Caribbean totalling more than US$19 billion last year, the Inter American Development Bank (IDB) is seeking a more assertive posture from governments in the region in the fight against crime, violence and corruption.

The message from the region’s most important source of multilateral financial support was delivered last month at the end of December by its President Luis Alberto Moreno and came against the backdrop of persistent concerns expressed by multilateral funding agencies about the role which crime and corruption plays in undermining development efforts in the region.

Moreno’s overview of the performance of Latin America and the Caribbean last year posited that while the period was marked by economic gains the fundamentally fragile nature of many of its economies meant that region remains vulnerable to external factors such as the prevailing European financial crisis, the current fiscal deficit in the United States and the deceleration of the Chinese economy.

IDB President Luis Alberto Moreno

While asserting that Latin America and the Caribbean with their “stronger economies… solid foreign exchange positions, low levels of indebtedness and a sound and well-regulated financial sector” are on “the right path,” the task of transforming the region’s economies remained incomplete. “The risks are there and we still have a long to-do list for the region to strengthen its achievements and keep moving forward,” Moreno says. Last year the bank approved US$10.8 billion and disbursed more than US$8 billion to finance 163 projects in the region, most of these in infrastructure and the environment. These levels of financing, he said, confirms the bank’s role as one of the leading multilateral sources of financing for Latin America and the Caribbean, particularly for the small, more vulnerable countries in the region which will be allocated 36 per cent of financing approved for 2012.

Sectoral allocation of IDB funding last year saw 61 per cent of approved financing go to infrastructure and the environment while institutional capacity building and finance projects accounted for 29 per cent of overall bank financing.

Social programmes attracted 9 per cent of funding while trade and integration projects comprised 1 per cent of total funding. Private sector projects financed by the IDB totalled US$1.44 billion.