Inter-American Development Bank

THE INTER-AMERICAN Development Bank (IDB) was founded in 1959 to have, according to its charter, a mission to “contribute to the acceleration of the process of economic and social development of the regional developing member countries, individually and collectively.” The IDB has been successful in its aims, and its lending and technical cooperation programs exceeded what was customary for banks at the time.

The IDB has proved to be an attractive model for the creation of other regional development banks internationally. The original bank members were Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, Venezuela, and the United States. Other countries to join as regional members are Barbados (1969), Jamaica (1969), Canada (1972), Guyana (1976), Bahamas (1977), and Suriname (1980). Countries must have prior membership in the Organization of the American States (OAS) to become regional members.

Nonregional members may also join, so long as they are members of the International Monetary Fund (IMF) and, like regional members, subscribe to both Ordinary Capital and the Fund for Special Operations. A total of 17 European countries have joined the bank as nonregional members, as have Israel, Japan, and South Korea.

Bank operations include not just arranging loans, borrowing funds, and making investments, but also providing technical cooperation, research and advocacy, publications, and organizing seminars and training. The IDB organized the Third Inter-American Conference on Corporate Social Responsibility in Chile, which drew more than 400 experts from 22 countries. The IDB also acts as a focal point and repository of knowledge and information about development projects in Latin America and the Caribbean. Just like the World Bank's, IDB publications help to frame the international debate on development issues in the region and provide the vocabulary for it.

In 2004, the IDB borrowed $4.7 billion in a diversified variety of currencies and instruments. It continued to receive AAA ratings by major agencies. It approved 56 loans amounting to approximately $5.3 billion. To date, it has not yet been required to write off any of its loan projects. There are three classifications of lending areas, which are competitiveness, social-sector reform, and reform and modernization of the state. From 1961 [Page 555]to 2004, a total of nearly $136 billion has been provided in loans, of which 13.8 percent was devoted to energy, 12.1 percent to social investment, and 11.2 percent to transportation and communication. Social investment received more than 42 percent of all loans in 2004.

The IDB has taken a leading role in attempting to meet the targets for the Millennium Development Goals in the region in which it is interested. As President Enrique V. Iglesias noted: “The mandate of the Inter-American Development Bank of promoting economic growth and reducing poverty and inequality is fully compatible with the agenda prompted by the Millennium Development Goals. We have developed a far-reaching institutional response … and we stand ready to continue to support our borrowing member countries in their efforts to achieve the Goals.” Progress has been mixed to date, as it has been around most of the world. Consequently the IDB is pressing ahead more urgently with policies that are aimed more at social inclusion and public participation than was previously the case.

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