Essential Reforms Still Necessary for an Effective Capital Increase at the Inter-American Development Bank

CANCUN, Mexico, March 21 /PRNewswire-USNewswire/ -- The Inter-American Development Bank still needs to institute important reforms in the context of the proposed general capital increase, according to representatives of civil society organizations present at the Bank's annual meeting currently underway in Cancun.

"If any capital increase is going to have the desired impact, reforms in transparency, effectiveness, and sustainability are essential," said Maria Jose Romero, of the Third World Institute in Uruguay.

The discussions in Cancun have centered on the likely dollar amount of a capital increase, varying between $60 and $80 billion. "Rather than focusing on a number, governors should be focusing on mechanisms for improving the effectiveness of the Bank," said Valeria Enriquez of the Center for Analysis and Investigation (FUNDAR) in Mexico.  Among the reforms, the civil society coalition has recommended a results framework with adequate targets and indicators as well as a stronger independent evaluation system for Bank projects.

It appears that the environmental reform proposed by the United States has become a bottleneck in the negotiations.  The reform is linked to the Pelosi Amendment, which dictates that US representatives on multilateral banks must vote against projects for which an environmental impact study has not been available for at least 120 days.  

"The Pelosi standard is simply the best practice among international financial institutions and has already been adopted by the Asian Development Bank," said Paulina Garzon of Amazon Watch.  She continued, "Of all the environmental reforms being demanded of the IDB, this is the bare minimum in our view.  Our coalition has demanded much more far reaching changes, such as the Bank phasing out its investments in fossil fuels while increasing its financing for renewable energies to at least 40 percent of its energy portfolio over the next three years."

"While IDB President Moreno has said he wants to see 'white smoke' in response to his request for a capital increase, we are hoping to see 'green smoke' that reflects a real strategy to confront climate change, one of the most frightening threat to Latin Americans.  Otherwise, the Bank runs the risk of failing in the face of a critical challenge for the region," continued Garzon.

For inquiries, contact Andrew Miller at [email protected]. For background, see publication BID en la Mira or visit http://www.bicusa.org/en/Institution.4.aspx.

SOURCE Amazon Watch & Bank Information Center