MercoPress. South Atlantic News Agency

World Bank plans to loan 14 billion USD to Latinamerica

WB Pamela Cox: Optimistic about Latinamerica

The World Bank expects to loan some 14 billion US dollars to Latinamerica this fiscal year, or almost three times what it lent in 2008, the bank's Vice-President for Latinamerica and the Caribbean, Pamela Cox told a conference call with reporters.

“The World Bank at present has sufficient capital and it has more than doubled its commitments to the region and we hope to be able to continue those commitments for the next year or two,” she said.

While countries in the region aren't likely to require rescue packages nor emergency loans in 2009, multilateral banks will not be able to make up for the huge funding gap that will come from a sharp decrease in expected foreign direct investment this year to the region, Cox said.

The three major multilateral financing entities to Latinamerica - the World Bank, the IDB and CAF, normally lend some 20 billion US dollars per year in a region where foreign direct investment reaches about 100 billion annually, she said. Foreign direct investment has fallen precipitously in the region, and the World Bank is now expecting it to be more than halved this year to around 47 billion.

“Latinamerica is certainly feeling the crisis through the real sector right now, and not through the financial sector” she said, adding the impact of the crisis in the region is very different than in Eastern Europe, where countries are actively seeking international rescue packages.

As for this weekend's Summit of the Americas in Trinidad and Tobago, Cox said she expected leaders will endorse increasing the role of multilateral banks such as the World Bank, the International Monetary Fund and the Inter-American Development Bank.

”We do think that in this period of crisis, and also with the new administration in the United States, that it certainly presents a number of opportunities for a much more pragmatic relationship within the Western Hemisphere countries,” she said.

Cox also called for the passing of free-trade agreements with Colombia and Panama.