The Inter-American Development Bank (IDB) is on a mission to boost productivity, internal savings and investment this year in Barbados and other countries it finances. IDB president Luis Alberto Moreno voiced the intention in his year-end report to the bank’s board of executive directors, saying the organization would tackle various bottlenecks inhibiting success in the areas he identified.
He made the announcement while highlighting the fact that, according to preliminary data, the financial institution approved 167 financing packages worth US$14 billion last year. This sum was surpassed only by 2009’s US$15.9 billion, an allocation he said was made “in response to the global economic crisis”.
“A less favourable external environment, along with weak external demand over the mid-term and latent risks in international financial markets, will require the region to accelerate growth without depending on the external conditions that helped us in the past decade,” IDB President Luis Alberto Moreno said in a news release.
“Therefore, our priority is to increase potential output over the medium term through reforms focusing on bottlenecks that are restricting growth in productivity, internal savings and investment,” he added.
The president said 2013 was “marked by an external context that did not encourage a strong economic performance in Latin America and the Caribbean”.
The high degree of volatility that rattled international financial markets and the fall in prices for basic goods took a toll on the region’s GDP growth, which averaged 2.7 per cent. In 2014, the growth forecast for the economies of Latin America and the Caribbean as a whole is three per cent, he noted.
Moreno said the US$14 billion supplied by the IDB was for “new operations centred on high-priority sectors such as institutional development (37 per cent), infrastructure and the environment (33 per cent), social welfare programmes (21 per cent) and regional integration and overseas trade (nine per cent).
He noted that among the loans and guarantees approved in 2013, private-sector operations (without a sovereign guarantee) totalled US$2.1 billion.
In terms of the bank’s focus in Latin America and the Caribbean this year, Moreno cited the need to improve the quality of education, as seen in the region’s performance in the Programme for International Student Assessment (PISA) last year.
In the 2013 test of this international educational evaluation tool, Latin American youths did not perform nearly as well as students from other regions of the world.
Moreno added that Latin America and the Caribbean needed to invest more in infrastructure, given the gap that existed in that area between the region and the world’s richest and most dynamic countries.
He said besides modernizing their highways, ports and airports, the countries of Latin America and the Caribbean must improve infrastructure and logistical services in order to lower transaction costs and make their industries more competitive. (SC/PR)
