The Inter-American Development Bank (IDB) is a cooperative development bank founded in 1959 to accelerate the economic and social development of its Latin American and Caribbean member countries. Owned by a total of 48 member countries, including the U.S. and several European nations, the IDB provides crucial financing in the form of loans and grants.
Key Insights
- Accelerating Development: The Inter-American Development Bank (IDB) supports the economic and social development of Latin America and Caribbean countries.
- Global Involvement: The IDB comprises 48 member countries, with significant projects funded, evidenced by $13.6 billion for 94 projects in 2021.
- Sound Fundraising: The bank raises funds for lending by issuing bonds in the market, keeping borrowing costs low due to a triple-A rating.
- Significant Stakeholders: The U.S. is the IDB’s largest shareholder, holding a 30% stake.
Understanding the Inter-American Development Bank (IDB)
The IDB assists Latin American and Caribbean countries in formulating progressive development policies while providing pivotal financing and technical assistance to achieve goals such as sustainable economic growth, competitiveness, social equity, poverty reduction, state modernization, free trade, and regional integration. In 2021, the IDB facilitated 94 impactful projects, amounting to $13.6 billion.
Funds lent by the Inter-American Development Bank are raised in the bond market, and these bonds benefit from the guarantee of capital pledged by the bank’s non-borrowing members. Possessing a triple-A rating, these bonds assure low borrowing costs for member countries. The U.S. is notably the IDB’s largest shareholder with a 30.01% stake. Other key stakeholders include Brazil and Argentina, each owning 11.35%, Mexico at 7.3%, and Japan at 5%.
Focus Areas and Accomplishments
By October 2022, the Inter-American Development Bank managed 601 projects with financing totaling $56.1 billion. Key completed projects in 2022 covering various sectors include state reform and modernization (Suriname, Guyana, Jamaica, and Barbados), social investment (Ecuador), energy (Mexico), and environmental initiatives (Colombia, Barbados). Current objectives include enhancing social inclusion, economic integration, innovation, and addressing climate change, gender issues, and diversity.
Luis Alberto Moreno, during his tenure as IDB president, emphasized the need to combat inequality and improve public services in the region, driven by various street protests in 2019 highlighting the urgency for change. Post-2014, Latin America has faced significant economic challenges, underlining the importance of the IDB’s role.
In September 2020, Mauricio J. Claver-Carone was elected President of the Inter-American Development Bank during a virtual meeting of the Bank’s Board of Governors and assumed office on October 1, 2020, for a five-year term. His previous roles include Deputy Assistant to the Former U.S. President Donald Trump and Senior Director for Western Hemisphere Affairs at the U.S. National Security Council, as well as Senior Advisor to the Under Secretary for International Affairs at the U.S. Department of the Treasury.
Related Terms: World Bank, International Monetary Fund (IMF), Regional Development Bank.
References
- Inter-American Development Bank. “How We Are Organized”, Select Member Countries.
- Inter-American Development Bank. “About Us: Overview”.
- Inter-American Development Bank. “Second Update to the Institutional Strategy”, Page 6.
- Inter-American Development Bank. “Annual Report: The Year in Review 2021”, Pages 9, 12.
- Inter-American Development Bank. “Non-Borrowing Member Countries”.
- Inter-American Development Bank. “Investors Home”.
- Inter-American Development Bank. “Investor Presentation 2022”, Page 17.
- Inter-American Development Bank. “IDB Projects”, Select Active Portfolio and Sovereign Guaranteed.
- Inter-American Development Bank. “Project Details”, Sort by Approval Date.
- Financial Times. “Latin America Must Curb Inequality or risk Decline, IADB Chief Warns”.
- Inter-American Development Bank. “Mauricio J. Claver-Carone Elected IDB President”.
