Multilaterals to Provide $90 Billion for Latin America in Times of Crisis
May 19, 2009—The World Bank Group has joined forces with four other development banks to coordinate crisis-response initiatives and spur economic recovery in Latin America and the Caribbean. The multilaterals will provide up to $90 billion over the next two years, thereby doubling their support to region compared to previous years.
This joint effort aims to protect the region's social gains of the past few years. It also sends a positive signal to the markets and shows that multilateral development banks can work together effectively in times of crisis.
Although the region is not the epicenter of the economic crisis, it is suffering from the impact of the shock, particularly in the real sector (construction, manufacturing, and retail). There is also a sharp decline in trade flows of about 25 percent. Private capital flows and foreign direct investment are down 50 percent, while infrastructure projects valued at $20 billion are delayed or suspended.
Through the initiative, the multilaterals will look for synergies in their crisis-response initiatives in the public and private sectors and will identify regional projects to support jointly.
IFC's Participation IFC will contribute $7.9 billion over two years, including $2.9 billion from the implementation of our crisis-response initiatives in Latin America and the Caribbean. We aim to mobilize an additional $5.3 billion through our trade finance programs, raising IFC's potential contribution to more than $13 billion.
Our crisis-response initiatives in the region focus on the financial sector, trade finance, and infrastructure. We are also strengthening support to private-sector projects that address the needs of people at the bottom of the economic pyramid, helping mitigate the impact of the crisis on those who are more vulnerable.
By participating in the joint effort, IFC also aims to send a positive signal to the markets, helping increase confidence and bring back private capital flows to Latin America and the Caribbean. Collaborating with other development banks will help expand and strengthen IFC's development impact in the region.
For more information contact: Adriana Gomez, IFC Senior Communications Officer Phone: +1 (202) 458-5204 E-mail: email@example.com