MercoPress. South Atlantic News Agency

Financial support for trade and integration

The Inter-American Development Bank, IDB, announced this week the launching of a special financial program that includes loans and technical assistance to help adjust the Latinamerican and Caribbean economies to the challenges of integration and commercial opening.

The "Loans Program for Trade, Integration and Competitiveness" that includes 20 billion US dollars for the coming 18 months will offer loans and technical assistance so that countries can adapt smoothly when signing bilateral free trade agreements be it at regional or continental level.

"In spite of the expected benefits of trade liberalization for growth and employment, transition processes towards a greater opening of external markets can have temporary additional adjustment costs caused by fiscal deficits and the redeployment of resources, including labour", said IDB Robert Devlin Deputy Manager of the Integration and Regional Programs Department.

However IDB points out that it hopes the costs associated with the opening process will be compensated by medium and long term benefits such as "institutional modernization, market access and business opportunities created through competition and a greater participation in world markets".

IDB said it's prepared to give assistance in areas such as the modernization of productive sectors, particularly small and medium sized companies, support for redundant labour, institutional consolidation, updating the customs system, strengthening export promotion and helping attract a greater influx of direct foreign investment. Other areas targeted include investment in infrastructure, fiscal reforms, improvement of the business climate and a greater participation of the overall community.

The resources for the Loans Program to promote trade, integration and competitiveness are included in a financial package of 26 billion US dollars approved in the 2002 IDB General Assembly for a three year period extending from 2002 to 2004.