The bank that puts a shoulder to Latin America's wheel

"We are in a sense the motor that propels development." That statement, made in one form or another by dozens of officials of the Inter-American Development Bank (IADB) when asked about the role of the bank in Latin America, sums up the purpose of the IADB through its more than 20 years of existence.

Time and again, at individual development projects throughout the hemisphere where the IADB has been involved, this proposition is also alleded to by Latin American engineers, government officials, and others.

It will come up at this year's annual meeting of the bank which takes place April 6-8 in Madrid -- the first time that the bank has held its annual conference outside the Western Hemisphere. But by holding the session in Spain, the IADB is taking fresh note of the increasing role of European nations and Japan in supplying the loan funds that the bank uses in the projects it supports.

The bank, founded in 1959, has loaned an accumulated total of more than $17.8 billion to the 25 Latin American and Caribbean member nations of the bank to fuel their development. These loans have helped finance development projects whose total costs exceed $66 billion. The projects range from huge hydroelectric systems to potable water facilities, from agricultural colonies to urban transportation, from education facilities to tourist-related facilities.

In its origin, the bank responded to two urgent needs:

* The yearning calls of the late 1950s, enunciated by such diverse hemisphere leaders as Brazilian President Juscelino Kubitschek de Oliveira and United States university president Milton Eisenhower, to find ways to solve the growingly urgent economic and social problems of the hemisphere that were then being spotlighted as never before.

* The US effort to counter what was seen as the appeal of Fidel Castro's social experiment in Cuba in solving the economic and social dilemmas of the hemisphere.

Whatever the reason for the bank's formation, however, the IADB has proved to be a valuable adjunct in the whole development process.

Former Venezuelan President Carlos Andres Perez commented recently that if the bank did not exist, the hemisphere system "would have to create it for without it we would be much poorer. But thank goodness, it exists."

During the bank's nearly 22 years of existence, Latin America as a whole has experienced remarkable economic progress, although some observers would suggest that it has simply been progress, but not development. Critics say that too often the development schemes carried on by governments have aimed at large infrastructure facilities and not enough at the social needs of the people of Latin America, half of whom hover at the poverty level or below.

The IADB disagrees. Bank officials say that the majority of its loans center on projects that have an immediate social and economic impact on the lives of Latin Americans. They cite dozens of specific projects -- hydroelectric facilities, for example, that have brought both electricity and irrigation to poor rural families. They argue further that the economic growth and modernization of Latin America in general has indeed been a factor in the economic and social development of the area.

The bank says specifically that a higher proportion of Latin Americans "are better off today than two decades ago in terms of more adequate living standards and improved access to health, education, and other basic social services. Moreover, the bank adds confidently that it has "played an important role as a catalyst in the mobilization of external and domestic resources for this development."

The IADB further notes that Latin America's gross domestic product, in terms of constant prices, has expanded at an average annual rate of 5 percent in the 1960s and 6 percent in the 1970s -- rates that are higher than those recorded by the industrialized countries and other regions in development. Moreover, the per capita product of Latin America more than doubled in the period 1959-79, even though the area's population increased from 201 million in 1960 to almost 340 million in 1979.

Actually, population is one of the major problems faced by the bank and by Latin American countries in general. Most nations' population is increasing at a rate close to 3 percent a year. This spiral adversely affects every development effort.

"It is a little like taking two steps forward and slipping back a step and a half," says a Mexican government development specialist.

But birth-control efforts and other measures to limit population growth have only had limited success in Latin America.

Another problem facing developers in Latin America is the region's inflationary spiral. Inflation is the key factor, for example, in the Brazilian government's decision to postpone the final link in the Sao Francisco River hydroelectric complex in Brazil's Northeast.

Finally, money itself is a problem. There simply is not enough of it around to carry out all the development projects that Latin American countries would like to tackle. On the other hand, since development tends to fuel inflation because there is so much local money in circulation, it may be just as well that there is a limit to the amount of development that can be carried on.

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