MercoPress. South Atlantic News Agency

IADB forecasts sustained growth in 2005/06

Latinamerica is forecasted to expand strongly this year supported by the sound policies implemented in the region, forecasted Inter American Development Bank Enrique Iglesias during a forum in Holland.

"The situation has improved drastically in the last year, following years of stagnation and contraction in some cases", said Mr. Iglesias. "I believe this is going to be a good year, with growth between 4 and 4,5%. Estimates are that the trend will continue in 2006".

The Latinamerica economy which last year expanded 5,5% is benefiting from a favourable international environment and "rational" economic policies, underlined Mr. Iglesias. "The combination of the two factors has converged in the current results and we expect this to continue", he added.

Regarding China's longstanding wish to become a member of IADB, Mr. Iglesias said that this could happen "immediately", once Beijing solves pending problems with United States, the country with the greatest influence, and votes, in IADB. Apparently Washington would like to see Beijing less active in the World Bank before it joins the leading multilateral organization in the hemisphere.

"We are looking forward to China's entry. China has become a great purchaser of commodities and is making a difference regarding markets access", stressed Mr. Iglesias who also mentioned China's interest in investing in the region following China's president Hu Jintao recent visit to Latinamerica. "In certain ways China and Latinamerican economies complement each other", pointed out IADB president.

Washington can actually veto China's entry since it holds 30% of IADB votes and any new member must have the support of 75% of votes. South Korea became the second Asian member of IADB last March. Japan was the first in 1976.

US policy has been to object countries entry to IADB if they are World Bank aid recipients.

Mr. Iglesias, from Uruguay, has been president of IADB for the last 17 years.