The World Bank approved $4.3 billion in lending to the region in fiscal year 2018, including $3.9 billion in IBRD loans and $428 million in IDA commitments. The Bank also issued the first ever multi-country catastrophe bond between Chile, Colombia, Mexico, and Peru, valued at more than $1.3 billion.
The priorities in the region centered on supporting inclusive growth through higher productivity and competitiveness, with an emphasis on investing in education, health, and other aspects of human capital. It also invested in infrastructure and worked to improve countries’ abilities to manage and withstand shocks—such as natural disasters, economic upheaval, and crime and violence— while promoting greater transparency and accountability. In addition, the World Bank prioritized the inclusion of groups that have traditionally faced exclusion, including Indigenous Peoples and rural communities. As countries’ needs often exceed public resources, the Bank supported activities and interventions that attracted private investment whenever possible.
The World Bank tailors its extensive financial, knowledge and convening services to the region’s diverse needs. Countries increasingly turn to the World Bank for more than direct lending, taking advantage of services including risk insurance, commodity swaps, climate adaptation finance, technical assistance, convening assistance and development research.
One of the reports from the last fiscal year was “Afro-descendants in Latin America: Toward a Framework of Inclusion.” About one in four Latin Americans self-identify as Afro-descendants today. They comprise a highly heterogeneous population and are unevenly distributed across the region, but share a common history of displacement and exclusion. Despite significant gains over the past decade, Afro-descendants still are overrepresented among the poor and are underrepresented in decision-making positions, both in the private and the public sector. The report proposes a framework to organize and think of the myriad options available to address their situations, based on the experience accumulated by the region and the data available.
A second report was “The Jobs of Tomorrow: Technology, Productivity, and Prosperity in Latin America and the Caribbean.” This report discusses technology adoption and its impact on inclusive growth through productivity, jobs, types of skills, and wages in Latin America. The report focuses particularly on two dimensions of inclusive economic growth: overall job growth, and how less-skilled, less well-off workers can also benefit from technology adoption.
Some program highlights include:
Caribbean: Natural disasters are a constant threat in the region, which can have detrimental impacts on economic growth. Following the devastating 2017 hurricane season, the Bank and its partners helped Caribbean countries conduct damage assessments and prepare emergency response projects. In Dominica, for example, the Bank pledged $115 million to support efforts to build climate resilience. The Bank also leveraged innovative solutions to transfer risks to capital markets and offer financial protection to participating governments. In Haiti, the Bank conducted an Urbanization Review to help lay the roadmap for the sustainable development of Haitian cities. The Bank is also supporting the
Organization of Eastern Caribbean States to implement the Eastern Caribbean Oceanscape Policy endorsed by 11 Caribbean heads of state. This involves advising governments on concrete actions to generate sustainable blue growth that balances economic activity with the preservation of healthy coastal and marine ecosystems.
The Pacific Alliance: This year, the Bank issued more than $1.3 billion in catastrophe bonds as insurance against earthquakes in the Pacific Alliance—an economic and development initiative between Chile, Colombia, Mexico, and Peru. The “Cat Bond” issuance was the largest of its kind ever placed and the first involving multiple countries. These bonds pay investors a premium for a set number of years, with governments receiving a payout if a covered disaster happens and bondholders getting the principal back if not. This transfers part of the risk of disasters from governments to markets, ensuring the quick mobilization of funds and fiscal resilience in the face of disaster. To date, the Bank has facilitated nearly $4 billion in risk transactions worldwide. The Cat Bonds highlight the fact that building resilience involves more than just reducing exposure to threats. It is also crucial to design and implement policies
that will ensure the well-being of all and allow economic growth to continue after a disaster. The Cat Bonds are also a huge step forward for regional integration and put Latin America at the vanguard of risk management.
Argentina: The World Bank and the IFC coordinated a joint approach bringing together expertise to help design and structure renewable energy bidding rounds, leverage global private sector investors and de-risk investments through an IBRD guarantee in support of the government Renewable Energy Fund in the amount of US$480 million (RenovAR). In two renewable-energy auctions in 2016 which aimed to attract 1,000 megawatts worth of new renewable energy projects, they ended up with bids for more than six times that amount - a signal of confidence from local and international investors.
Panama: The Panama Accord – between the World Bank Group, the Organization of American States, and the Government of Panama – aims to enhance transparency and accountability in Latin America and the Caribbean countries, fight corruption and mobilize greater private financing for development. The Accord includes a series of measures destined to improve the quality and transparency of fiscal and financial reporting, strengthen accountability in the public sector and enhance cooperation among the various players involved in development, namely governments, the private sector and civil society.
Last Updated: Oct 08, 2018