U.S. State Department Geographic Bureaus: Latin America Bureau

U.S. Department of State
96/02/16 Fact Sheet: Inter-American Development Bank
Published by the Bureau of Public Affairs

FACT SHEET
The Inter-American Development Bank

Founded in 1959 as a hemispheric organization with 19 members, the Inter-American Development Bank (IDB) opened to non-regional donors in 1976 and now has 46 member countries: 28 in the Western Hemisphere, 16 in Europe, plus Israel and Japan. Of the bank's membership, 26 are borrowing country members and 20 are non-borrowing members.

The Board of Governors, which meets annually to review IDB operations and to make major policy decisions, is the bank's highest authority. The Board of Executive Directors conducts IDB operations. The bank's president is chosen by the governors for a five-year term. President Enrique V. Iglesias of Uruguay was elected in 1988 and re-elected in 1993. The current U.S. Governor is Treasury Secretary Robert Rubin. The Alternate Governor is the Under Secretary of State for Economic, Business, and Agricultural Affairs Joan E. Spero. L. Ronald Scheman is the U.S. Executive Director. The United States receives a large share of IDB-related foreign procurement--about 37% in 1994, totaling $506 million.

The IDB fosters the economic and social development of its member countries in Latin America and the Caribbean. It is funded by ordinary capital resources--paid-in and callable capital contributions, reserves, and funds raised through borrowings--and trust funds established through voluntary contributions by individual member countries.

Summit of the Americas Implementation

The 34 heads of state and government who participated in the Summit of the Americas in Miami, Florida, December 9-11, 1994, called on the IDB to assist summit governments in implementing the decisions reached in Miami. In response, the IDB is engaged in a wide range of activities designed to support the implementation of the Summit Plan of Action, which outlines specific steps to be taken in four vital areas:

-- preserving and strengthening the community of democracies of the Americas;

-- promoting prosperity through economic integration and free trade;

-- eradicating poverty and discrimination in the hemisphere; and

-- guaranteeing sustainable development and conserving the natural environment for future generations.

The Summit Plan of Action contains 23 separate initiatives and over 150 action items.

Fund for Special Operations (FSO)

The Fund for Special Operations is the IDB's concessional lending window and offers low-interest loans to less developed member countries. It is funded by separate paid-in capital contributions. Currently, only five countries may borrow from these funds: Bolivia, Dominican Republic, Haiti, Honduras, and Nicaragua.

Inter-American Investment Corporation (IIC)

The Inter-American Investment Corporation, an autonomous IDB affiliate, was created in 1989 to stimulate small and medium-scale private enterprise via loans, guarantees, equity investments, and advisory services. It is funded by paid-in capital contributions, reserves, and funds raised through borrowings. It has 34 members.

Multilateral Investment Fund (MIF)

The IDB also administers the Multilateral Investment Fund for Latin America and the Caribbean, which was launched in 1993 to promote investment reform in the region via small-scale loans and grants. It is funded by paid-in contributions and is intended as a five-year program.

The MIF's basic agreements were signed in 1992 by 13 Latin American and eight industrialized countries. Since then, another 16 Latin American and Caribbean countries have joined this fund.

Financing

From 1961 to 1994, the Inter-American Development Bank has approved loans totaling $70 billion for projects representing a total investment of $178 billion in energy, agriculture and fisheries, transportation and communications, industry and mining, environment and public health, economic reform, urban development, education, science and technology, export financing, tourism, and microenterprises.

During this period, FSO accounted for $12.3 billion of all approved loans. In addition, the IDB provided $1.2 billion in grants for technical cooperation over this same period.

In 1994, the IDB approved more than $5 billion in new loans--$543 million under the FSO--and disbursed $3 billion. That year 28% of the approved loan amount was used for planning and reform projects; 18% for education, science, and technology; 18% for transportation and communications; and 15% for environment and public health. Major projects approved in 1994 ranged from financing a new model of participatory municipal development in Mexico, through poverty alleviation programs in El Salvador and Brazil, through water and sanitation programs in Ecuador and Peru.

During 1989-94, the IIC approved 99 projects in 22 countries for a total of $390 million in loans and equity operations. In 1994, the IIC approved 13 operations, for a total of $42 million in new investments. In 1993 and 1994, the MIF approved 32 operations worth more than $11 million.

The Eighth Replenishment

Members pledged $40 billion in new capital at the bank's eighth capital increase, or replenishment, completed in April 1994. This will raise the IDB's total capital to more than $100 billion, making it the largest of the regional development banks. The replenishment will allow the bank to sustain annual lending of $6-$7 billion.

The replenishment also broke new ground in lending priorities. The bank will commit 40% of its funds--50% of total projects--to social sector and poverty-alleviation programs. Members also authorized up to 5% of the IDB's lending to the private sector, without a government guarantee. Other priorities will be the environment, government modernization, and development of economic reform and regional integration.

Under the eighth replenishment, the relative voting shares set out in the IDB Charter were amended to allow greater participation by non- regional members. The U.S. share will drop from 34.5% to 30%, but will remain the largest of any country in any multilateral development bank. Regional borrowers will reduce their share to 50%. Canada retains a 4% voting share, and Japan will increase its share to 5%. The remaining 11% is divided among 17 non-regional members.

IDB Members in the Western Hemisphere

Argentina
Bahamas
Barbados
Belize
Bolivia
Brazil
Canada
Chile
Colombia
Costa Rica
Dominican Republic
Ecuador
El Salvador
Guatemala
Guyana
Haiti
Honduras
Jamaica
Mexico
Nicaragua
Panama
Paraguay
Peru
Suriname
Trinidad and Tobago
United States
Uruguay
Venezuela

Yearly (1994) and Cumulative (1961-94)* Total Cost of Projects

                                                    Latin America's  
                Total Cost         Bank's Loans     Contributions 


Country       1994   1961-94      1994     1961-94    1994    1961-94 


Argentina   1,188.0   19,233 8    717.2    7,922.1     470.8  11,311.7 
Bahamas        33.0      307.3     21.0      208.4      12.0      98.9 
Barbados        4.7      411.8      4.1      261.1       0.7     150.7 
Belize 
Bolivia       319.3    3,715.1    173.1    2,268.6     146.2   1,446.5 
Brazil      2,104.0   44,113.3  1,132.0   11,201.3     972.0  32,912.0 
Chile         500.0   10,046.2     75.0    4,434.0     425.0   5,612.2 
Colombia       64.1   14,753.6     42.7    6,058.3      21.4   8,695.3 
Costa Rica      0.0    3,481.6      0.0    2,195.9       0.0   1,285.7 
Dominican 
  Republic     33.7    1,901.4     30.3    1,332.1       3.4     569.3 
Ecuador       622.6    5,905.8    573.3    3,261.5      49.4   2,644.3 
El Salvador   864.6    3,200.9    500.0    2,101.8     364.6   1,099.1 
Guatemala       1.6    2,416.6      1.4    1,310.0       0.2   1,106.6 
Guyana          0.0      579.6      0.0      457.9       0.0     121.7 
Haiti           0.0      509.9      0.0      356.2       0.0     153.7 
Honduras       62.4    3,011.7     53.9    1,566.5       8.5   1,445.2 
Jamaica        33.4    1,805.9     22.9    1,156.1      10.6     649.8 
Mexico      1,770.0   26,161.5  1,063.4    9,647.2     706.6  16,514.3 
Nicaragua     202.8    1,731.5    194.5    1,028.0       8.4     703.5 
Panama         37.5    2,187.4     30.0    1,229.8       7.5     957.6 
Paraguay       23.7    1,598.4     20.9    1,158.1       2.8     440.3 
Peru          790.4    6,111.0    494.7    3,271.9     295.7   2,839.1 
Suriname        0.0       29.7      0.0       18.7       0.0      11.0 
Trinidad and 
  Tobago        2.9      781.5      2.0      592.2       0.9     189.3 
Uruguay        45.4    2,323.9     32.8    1,311.8      12.6   1,012.1 
Venezuela     140.0   11,467.6     70.0    3,667.7      70.0   7,799.9 

Regional        0.0   10,404.5      0.0    2,114.3       0.0   8,290.2 

TOTALS      8,844.1  178,191.5  5,254.9   70,131.5   3,589.2 108,060.0 

*Cumulative loans after cancellations and exchange adjustments. 

Source:  Inter-American Development Bank 

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