Caribbean economies performed strongly in 2012 but urged to lower costs – IDB

Region urged to continue pursuit of strong reforms to ensure growth in the future.

WASHINGTON D.C., United States, Friday December 28, 2012 - President of the Inter-American Development Bank, Luis Alberto Moreno, says the economies of Latin America and the Caribbean have performed strongly in the face of a challenging external environment, but that the region needs to continue to pursue key reforms to ensure growth in the future.

In year-end remarks to the IDB´s Board of Executive Directors, Moreno summarized the region’s challenges, the institution’s performance over the past year and its priorities going forward.

He said the region, boosted by high commodity prices, continued to grow its trade with the world.

Moreno said trade with Asia has been “especially noteworthy” growing at a 20 per cent annual rate since 2000 to total an estimated US$442 billion in 2012.

However, he said many challenges remain, noting that trade among Latin American and Caribbean countries is still too low, at 19 per cent of overall trade.

“We must focus our vision of the future on those areas that will enable us to maintain a diversified productive base, build our capacity for innovation, and successfully compete on a rapidly evolving planet,” Moreno said, adding “nothing produces greater returns than investments in building social capital”.

He urged countries to lower their country costs by investing in infrastructure.

“We must also work to break down financial, bureaucratic, and information-related barriers. We should pave the way for private initiative to flourish, so that we can take advantage of better international positioning that is not only desirable, but inevitable.”

Moreno said the IDB continued on its path to build best practices into its operational and administrative management, bolstering transparency, accountability and financial mechanisms.

He said it was now standard practice at the IDB to assess whether projects can measure their expected results using rigorous evaluation methods during their preparation phase.

In 2012, the IDB said it approved new financing mechanisms to help countries cope with natural disasters and safeguard the effects of economic crises.

The financial institution said it approved 170 operations in 2012 for a total of US$11.5 billion, including 44 projects for non-sovereign guarantees, which finance private sector projects, for US$1.5 billion.

The IDB said it also provided US$871 million in grant financing, up 29 per cent from 2011, with growing contributions by member countries to create acclimate fund for the private sector and provide additional resources for various initiatives.

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