IDB going after region’s poorest

Wednesday, June 7, 2006

Patrick Foster
Wednesday, June 07, 2006

The Inter-American Development Bank (IDB) yesterday announced a potential US$8 billion per year initiative, through which it seeks to promote economic opportunities for the 360 million people in the Latin American and Caribbean region, whom the bank says live on less than US$300 (J$19,500) per month.

Called ’building opportunities for the majority’, the initiative will be launched at a conference in Washington DC on June 12 and 13, where speakers will include Jamaica’s prime minister, Portia Simpson Miller and former US president, Bill Clinton.

Some 360 million people, or 70 per cent of the population of Latin America and the Caribbean, have income of less than US$300 per month, measured on a purchasing power basis, according to a study undertaken by the World Resources Institute (WRI), the result which was presented by the IDB.

While they constitute a US$510 billion-a-year market, these neglected consumers and producers pay a ’poverty penalty’ that raises their living costs, stunts their productivity and limits their opportunities to accumulate assets, the IDB said at a press briefing.

The IDB added that low income people in the region lacked access to running water, reliable electricity, good roads and safe transportation. Their homes tend to be precariously built on land they probably can’t prove they own. Their businesses are hobbled by a scarcity of credit and excessive bureaucratic requirements.

IDB’s president Luis Alberto Moreno through video conferencing from Washington DC, beamed to Kingston yesterday, said that the agency must work creatively with governments, the private sector and civil society to help more people move into the middle class.

“While we have empowered people in the region politically, we have not yet economically. That’s what we have to do,” an IDB representative said.

To that end the IDB said it would devote increasing amounts of its lending, which could rise to $8 billion per year, to finance innovative partnership projects in a few key areas where it may make a difference.

The areas given priority by the bank are access to computers and telephone; basic infrastructure – improved sanitation, water and electricity; financial democracy; training and productivity; and housing.

Source: Jamaica Observer (link opens in a new window)