Ilan Goldfajn: Latin American governments may change, but IDB remains constant

Paula Escalada Medrano

Washington, Sep 1 (EFE).- Despite political cycles and frequent government changes in Latin American countries, the Inter-American Development Bank (IDB) remains a constant thread throughout the region, its president, Brazilian Ilan Goldfajn, told EFE in an interview, eight months after taking office.

“Despite political shifts, IDB is the consistent thread. Governments often change, but IDB stays because our projects are long-term,” he said.

Goldfajn, who assumed leadership in December 2022, aims to boost the bank’s efficiency in a region expected to play a key role in the coming years.

FINANCE IN COMMON

In three days, Cartagena, Colombia is to host the fourth edition of the Finance in Common Summit (FiCS), the world’s largest developmental banking gathering, with IDB as one of its organizers. The summit aims to unite international, national, and multilateral development banks to discuss, among other issues, collaboration to bridge the financing gap.

IDB data suggests that global investments between $3.3 and $4.5 trillion more than current levels are required to achieve the UN’s Sustainable Development Goals and the Paris Agreement’s temperature and adaptation objectives.

“We are realizing that we need more, not just for adapting to climate change on a continent heavily impacted by disasters, but also to meet the immense demand for social change in Latin America. There’s a lot of impatience regarding political changes since inequality and poverty rates are extremely high,” he said.

Goldfajn asserted that “the role of institutions like IDB is becoming increasingly crucial” and events like the FiCS summit offer a “huge opportunity” for developmental banks to have “more impact.”

LATIN AMERICA’S TIME

This is the first time the summit is to be held in Latin America. Goldfajn highlighted IDB’s goal to demonstrate that the region has “either the solution or a part of the solution to global problems.”

He noted that the area is “highly advanced in terms of renewable energy,” meaning that “soon, with investments, it could export clean energy globally.”

“With investments in food production, Latin America can be the solution to not only regional but global food security issues,” he said.

For Goldfajn, the opportunities are boundless, largely because “the investment rate in Latin America is generally lower than it should be” for various reasons, including the private sector’s “risk aversion,” which makes “boosting investment in the region” challenging.

However, he said he believed that perception “is changing” and “the world is looking at Latin America as part of the solution.”

“People view Latin America as a significant ally. It’s a largely democratic region, with some exceptions, and shares values in an increasingly polarized world with growing geopolitical frictions,” he said.

THE PIVOTAL ROLE OF PUBLIC BANKS

Under the banner “Building new partnerships for the next generation of development financing,” the summit will focus on four themes: SMEs and financial inclusion; climate and biodiversity; sustainable infrastructure; and the agenda for strengthening institutional capacity for Public Development Banks.

This last point, Goldfajn emphasized, is critical to enhance the efficacy of institutions like IDB.

“Public banks, through commercial ones, have a way to reach the large projects we target,” he said.