Economists Propose IDB Seek Capital Increase To Tackle Crisis

Latin America - "An external commission of economists on Sunday proposed the Inter-American Development Bank (IDB) seek a $180 billion increase to the bank's current capital to help countries reeling from economic recession.

Former Peruvian economy and finance minister Pedro Pablo Kuczynski said the IDB governors could accept or reject the initiative. 'The IDB has resources for $100 billion and we want to go to $250 billion or $280 billion,' Kuczynski told a press conference...." [Xinhua (3/30)/Factiva]

FT adds that "...Kuczynski said only 4 percent of [the increase] would be cash.... 'It's a very big increase and the reason is very simple: capital markets have been closed down,' Kuczynski said, although he pointed to recent successful debt issues in Brazil, Mexico, Colombia and Peru as evidence they had reopened...." [The Financial Times (UK, 3/30)/Factiva]

Reuters reports that "...US Treasury Secretary Timothy Geithner told the IDB's annual assembly the US was prepared to start a review of a permanent capital increase, but first it should try to maximize its existing resources.... The US is the largest shareholder in the bank, with a 30 percent voting share.... IDB President Luis Alberto Moreno said the governors of the bank have reached a consensus to increase its capital but that a formal agreement is still being negotiated...." [Reuters (3/29)/Factiva]

China Boosts Ties With Latin America By Joining IDB

"China's membership in the Inter-American Development Bank (IDB) will broaden cooperation between China and Latin America, People's Bank of China Governor Zhou Xiaochuan said Saturday. Closer bilateral cooperation will enhance their ability to jointly tackle the ongoing financial crisis, Zhou told an IDB meeting in Medellin...." [Asia Pulse (Australia, 3/30)/Factiva]

Reuters adds that "...IDB is counting on its newest member, China, to finance more projects to help it counter the global economic slowdown, IDB President Luis Alberto Moreno told Reuters.... 'There is no doubt that I think we have a source of knowledge of the hemisphere that I think is very important for China to tap into,' said Moreno. 'On the other hand, we are increasingly going to be looking for more ways for China to help us during this period...' he said...." [Reuters (3/27)/Factiva]

Xinhua writes that "...Moreno expressed the hope... that China and IDB would enhance cooperation and exchange to advance trade and investment between Latin America and China. Moreno said at a press conference that China's economic growth in recent years has been remarkable and its trade with Latin American countries has been more than 11 times that in 2000..." [Xinhua (3/30)/Factiva]