Energy and water projects top US$2bn IDB funding for Central America
The Inter-American Development Bank has announced its new initiatives and projects for Central America and the Dominican Republic in 2008, which include some US$2 billion in investments. Initiatives include formulating action plans and programs for biofuels, energy efficiency and renewable energy; support for infrastructure projects by both the public and private sectors; sector strategy plans for water and sanitation; and specific projects under the IDB’s Opportunities for the Majority Initiative.
The IDB is expected to approve US$2 billion in loans for 2008 for the countries in the subregion, including US$700 million for private sector projects.
In addition, projects in Central America and the Dominican Republic are expected to account for 20 percent of total IDB approvals for non-sovereign-guaranteed operations in 2008, up from 13 percent in 2007.
With growth averaging around 6 percent, the subregion has performed well during the past three years, surpassing Latin America as a whole, IDB President Luis Moreno pointed out. But he warned that the economic slowdown in the United States and the sharp fall in the financial markets call for caution, especially when a large percentage of the region’s average growth is attributable to such external factors as rising commodities prices and falling interest rates.
“Such a pronounced dependence on external conditions calls for major improvements in the productivity of our economies and to strengthen macroeconomic fundamentals even more,” Moreno said.
A good rate of economic growth alone is not enough to guarantee sustained growth: it also depends on the quality of macroeconomic policies and the quality and efficiency of spending.
“Achieving quality growth, as well as developing the social inclusion that growth promotes and opening opportunities to participate in the economy require a collective effort and a clearer focus on our main challenges of addressing poverty and inequality,” Moreno said.
Moreno stressed the importance of international coordination of risk management and international integration policies, especially as the region’s economies continue to integrate even more. He also took the opportunity to commend the countries in the subregion for actively promoting regional integration into various trade blocs that can best take advantage of the opportunities created by agreements such as CAFTA.
“We must strengthen this kind of coordination and extend it to the macroeconomic areas of growth,” Moreno said. “A joint effort to lower transportation costs and improve communications, as well as changing the subregion’s energy matrix by diversifying and developing clean, inexpensive sources of energy, and facilitating trade are important issues in the agenda for coordinating regional policies.”
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