16 April 2009
The World Bank plans to increase lending to Latin America to suplement decreasing levels of foreign direct investment in the region.
The World Bank (WB) expects to loan some US$14bn to Latin America this fiscal year, or almost three times what it lent in 2008, bank VP for Latin America and the Caribbean Pamela Cox told reporters on a conference call.
"The World Bank at present has sufficient capital and it has more than doubled its commitments to the region and we hope to be able to continue those commitments for the next year or two," she said.
While countries in the region are not likely to require rescue packages or emergency loans in 2009, multilateral banks will not be able to make up for the huge funding gap that will come from a sharp decrease in expected foreign direct investment this year to the region, Cox said.
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The three major multilateral financing entities to Latin America - WB, IDB and CAF - normally lend some US$20bn per year in a region where foreign direct investment reaches about US$100bn annually, she said. Foreign direct investment has fallen precipitously in the region, and WB is now expecting it to be more than halved this year to around US$47bn.
"Latin America is certainly feeling the crisis through the real sector right now, and not through the financial sector," she said, adding the impact of the crisis in the region is certainly very different than in Eastern Europe, where countries are actively seeking international rescue packages.
As for this weekend's Summit of the Americas in Trinidad & Tobago, Cox said she expected that leaders will endorse increasing the role of multilateral banks such as WB, the IMF and IDB.
"We do think that in this period of crisis, and also with the new administration in the US, that it certainly presents a number of opportunities for a much more pragmatic relationship within the western hemisphere countries," she said.
Cox also called for the passing of free-trade agreements with Colombia and Panama. |
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By Business News Americas |