Brazil, Colombia and Mexico Lead Region in World Bank Loans

By Matthew Schewel
August 1, 2008

Originally published in the Dialogue's daily Latin America Advisor.

Washington, DC—The World Bank invested $4.6 billion in Latin America during the 2008 fiscal year, with Brazil, Colombia, and Mexico constituting the Bank's largest finance recipients by volume, Pamela Cox, the Bank's Vice President for Latin America and the Caribbean, told a press conference on Tuesday at its headquarters in Washington, DC.

Cox, who has been in the regional VP post for nearly three years, said the figures, which have yet to be finalized, were comparable to the previous year's numbers for the region, and accounted for nearly one-fifth of all World Bank lending.

In all, the Bank funded fifty-eight programs in Latin America during the past fiscal year, which ended on June 30. It also unveiled new products under Bank President Robert B. Zoellick, which included a $10 million "fast dispersion" grant to Haiti in the midst of the country's recent food crisis.

Cox underlined the Bank's efficient response to the food crisis as evidence of its engagement in the region. "I think with the food and energy crisis, that's an example of how very quickly we've thought to work with the countries that are most affected to help them cope in a number of ways," Cox said in the briefing. In the coming year, the Bank plans to put resources into "safety net" projects already in place in the region, with rapid operations for Honduras and Nicaragua already scheduled for approval by September.

Energy and food topped the Bank's list of "critical issues" for 2008, along with climate change, trade quality, and increasing opportunities for poor people in the region. Cox said that these four issues will remain priorities for the Bank, with $5 billion in loans projected for the 2009 fiscal year.

Cox expressed confidence in Latin America's financial stability when questioned on the threat of inflation. She cited strong financial regulation of Latin American markets by independent central banks. "Countries have been doing the right things so that when the rainy day comes, such as now, they're in a much better position than they might have been in the past," she said.

Augusto de la Torre, the Bank's chief economist for Latin America, told Bloomberg Television on Wednesday that inflation was expected to top 8 percent this year, and posed a "challenge" to countries in the region. "Central banks are being put to the test," said De la Torre, echoing Cox's assessment.