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OPINION July 12, 2019

Bretton Woods: 75 Years of Solidarity with Latin America and the Caribbean

From the ashes of a world wracked by the horrors of a war like none before, a new paradigm for peace was born.

Seventy-five years ago, delegates from 44 nations gathered at the secluded Mount Washington Hotel in Bretton Woods, New Hampshire.  Their mission, in the words of Henry Morgenthau Jr., Secretary of the U.S. Treasury, was one of concrete action, designed to establish the economic foundations of peace on the bed rock of genuine international cooperation.  The Bretton Woods conference gave birth to the institutions we now know as the International Monetary Fund (IMF) and the World Bank Group.

What is often overlooked is the key role Latin America played in the Bretton Woods Conference. Close to half of the countries represented at the conference were from Latin America -- nineteen delegations in all. An agreement without the backing of Latin America would have been impossible.

In fact, Mexican Finance Minister Eduardo Suarez joined Assistant to the Secretary of the U.S. Treasury Harry Dexter White and economic adviser to the British Chancellor of the Exchequer John Maynard Keynes as the presidents of the three Commissions that guided the formation of the IMF and the World Bank and led the discussion of other means of international financial cooperation.

In addressing the delegates, Suarez underscored the importance of coordinated efforts to face the challenges of a world in disarray from WWII. He stressed a “cooperative and united approach to the important international financial problems with which we are confronted. As members of the United Nations, we accept as a basic premise the desirability of working together to solve our common problems.”

The chairman of the Brazilian delegation, Arthur de Souza Costa, offered an eloquent explanation of the common values driving the conference. “We… represent countries from all the corners of the earth, but the thought that has guided us has been but one—our trust in the results of cooperation within a moral atmosphere which enables each nation to live in accord with its sovereign will, in harmony with its traditions, its culture and the dictates of its heart,” he said. “Against the Nazi claim that a supposed racial superiority gives the right to rule the world, Bretton Woods offers a way for the guidance of human destinies through the development of human brotherhood.”

The Latin American delegates understood then an ideal that remains at the core of the World Bank Group’s mission today:  Progress can only come through working together in the spirit of solidarity. The World Bank Group is a leader in the field of international development and poverty reduction, but it does not go it alone – since 1944, it has worked hand-in-hand with governments, institutions, and organizations that share its goals.

While the World Bank’s first task was to help European countries rebuild from the devastation of the war – its first loan was to France in 1947 for reconstruction – it soon shifted its focus to meeting the needs of its members in Latin America, Africa, and Asia. Early on, this largely meant the funding of massive infrastructure projects. With the founding of the International Development Association in 1960, the Bank began placing greater emphasis on the poorest countries, and by the 1970s had fully shifted its attention to poverty eradication, a focus that has remained to this day.

Today, the World Bank’s work in the Latin America and the Caribbean region is anchored in a three-pillar strategy: promoting inclusive growth, investing in human capital, especially education and health, to prepare people for the challenges and opportunities that come with digitalization and the changing nature of work and building resilience so that countries can better manage and withstand shocks such as natural disasters, economic upheaval, migration, and crime and violence.

From its genesis at a time when automobiles were a luxury for the precious few and computers, let alone smartphones, were but a distant dream, the World Bank Group has been driven by the ideals and goals set three generations ago at Bretton Woods. These were eloquently summarized by the Latin American delegates in 1944:  Working together to solve our common problems.  Trust in the results of cooperation. A spirit of solidarity.  

These principles have driven an extraordinary period of economic growth and better lives and opportunities for people. Hundreds of millions have been lifted out of poverty in Latin America and the Caribbean since the middle of the last century, and much of the region has prospered. Yet, while we should celebrate the accomplishments, there is still much to be done -- nearly a quarter of the population remains mired in poverty and a number of nations still rank among the poorest countries in the world.  

The spirit of solidarity at Bretton Woods was exemplified by Carlos Lleras Restrepo, the chairman of Colombia’s delegation and that country’s future president. “Colombia is taking a part in the common task of economic rehabilitation, doing so without any feeling of selfishness, but with the sincere conviction that she is doing her international duty within the principles of cooperation which have found in our continent the deepest and most widespread acceptance,” he told the assembly.

As the world has evolved, the World Bank Group has followed suit, changing, growing, and renewing itself.  But one thing has remained the same since 1944:  the spirit of international duty and cooperation. This is all the more important today as the world strives to make the United Nations Sustainable Development Goal a reality: the end of poverty across the world by 2030.

By Axel van Trotsenburg, World Bank Vice President for the Latin America and the Caribbean Region