Infrastructure, transportation, education and fiscal management were among top priorities supported by more than $10 billion last fiscal year
WASHINGTON, July 2, 2014 - The World Bank Group (WBG) committed $10.2 billion in fiscal year 2014 (July 2013 to June 2014) to support Latin America and the Caribbean efforts to boost economic growth and maintain historic social gains. This includes resources from the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
The World Bank (IBRD and IDA) maintained its strong support for the region approving more than $5.1 billion in new loans in FY14, $4.6 billion from IBRD and $455 million from IDA, the Bank’s fund for the poorest countries. Support was aimed at generating opportunities for all through public and private sector projects that expand public services, improve regional productivity, competitiveness and integration, create new quality jobs and assist those most in need.
Brazil ($1.6 billion), Colombia ($870 million) and Mexico ($356 million) were the largest IBRD borrowers in the region. Haiti also received $103 million in IDA grants. Transportation, fiscal management and education received the most IBRD funding.And the region received one fourth of IBRD’s total global new lending.
This fiscal year, IFC, the private sector arm of the World Bank Group, identified infrastructure as one of the most urgent priorities to help boost competitiveness and job creation, especially for the region’s growing urban population. In FY14, IFC invested $1.7 billion in 34 infrastructure projects, including energy, ports, telecom and more. Special focus has been on supporting renewable energy, such as hydropower, wind and solar energy projects, which help mitigate or adapt to climate change.
In total, IFC supported 148 projects in Latin America and the Caribbean in FY14 with $5.1 billion in investments, including $1.1 billion mobilized from other financial institutions. IFC clients help support jobs for more than 1,580,000 people and provide over 25 million people with connections to power, water and telephone services. In the financial sector, IFC clients provided 12.7 million loans valued at $70 billion to micro, small and medium enterprises. Supporting smaller economies continues to be a priority for IFC, with $965 million invested in Central American and Caribbean projects.
During fiscal year 2014, MIGA, the political risk insurance and credit enhancement arm of the World Bank Group, provided support for two projects in Central America totaling $402 million in coverage. The Agency augmented its support to the Panama City metro and insured the Cerro de Hula wind farm in Honduras.
The World Bank tailors its diverse financial, knowledge, and convening services to the region’s needs. It addressed pressing needs through project financing; innovative mechanisms, such as the Climate Investment Funds; and in-depth research, such as the 2014 flagship report Latin American Entrepreneurs: Many Firms but Little Innovation.
Declining commodity prices, weak activity in the United States, and domestic challenges have reduced growth prospects for LAC to 1.9 percent this year. But buttressing regional exports on the back of the continued recovery among high-income countries and strong capital inflows should lift regional growth to 2.9 percent in 2015 and 3.5 percent in 2016.
In the past decade, about 80 million people in the region emerged from poverty. The rate of extreme poverty (the share of people living on $2.50 a day) was halved, to 12 percent, between 2003 and 2012, and the rate of moderate poverty (the share of people living on $4 a day) fell from 42 to 25 percent. The size of the region’s middle class rose to 34 percent of the population in 2012, and persistent inequality has fallen, even as it has risen in most of the rest of the world.