IDB backs internal reform at its annual meeting this week

The Annual Meeting of the Board of Governors of the Inter-American Development Bank (IDB) that will take place this week has an ambitious agenda. The president of the IDB, Ilan Goldfajn, has been working on a proposal to reform the institution. and it is expected to be approved at the meeting. Central issues to the 48 member countries, such as insecurity and climate change, will also be discussed in seminars that bring together the private and public sectors.

Most of the governors on the board — the IDB’s highest authority — are finance and economy ministers, presidents of central banks or senior officials of their respective countries in the Americas. What’s more, the event brings together leaders from the private sector and representatives of civil society, with more than 3,000 participants expected to attend. The event will be held from March 6 to 11 in Punta Cana, in the Dominican Republic, which has not hosted the IDB since 1992.

The Board of Governors is expected to vote on proposals to strengthen cooperation between the IDB, IDB Invest, the bank’s private sector arm, and IDB Lab, its financial innovation lab. The three organizations make up the IDB Group. This involves voting on a series of operational and institutional changes that were presented to the IDB’s Board of Governors in October. At a press conference in December, Goldfajn described his program as a cultural transformation of the bank.

“Our new orientation towards effectiveness and development results also requires a cultural transformation at the Bank. Promoting a culture of impact, rather than borrowed amounts, requires changing incentives and processes: a global transformation. Next year will be important to advance the changes that will help us achieve this goal,” said Goldfajn, who was elected president of the IDB in November 2022.

During this week’s event, there will be seminars that bring together business executives, bankers, public officials and members of civil organizations in Latin America and the Caribbean. The urgent need to invest in education, the transition from hydrocarbons to clean energy, innovation in agriculture and food systems, public security, climate change funding and biodiversity loss are some of the topics that will be discussed.

Of the 48 member countries, the IDB has 26 borrowing member countries, all of them in Latin America and the Caribbean, which have just over 50% of the voting power on the institution’s Board of Governors. Credit rating agency Fitch Ratings estimates that the IDB disbursed $10.5 billion in loans for development projects in the region last year. In an interview with Reuters in October last year, Goldfajn said the IDB Group could expand its lending capacity to $112 billion within a decade, including its public and private arm.

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