The Inter-American Development Bank will ask its members to consider a contingency fund to help countries maintain spending in the event of a future crisis, said an official of the Washington-based lender.
The proposal would aid countries in sustaining funding for social development, infrastructure and small and medium-sized businesses, said Koldo Echebarria, manager of the IDB’s Office of Strategic Planning and Development Effectiveness.
The IDB’s Board of Governors is analyzing the Latin American and Caribbean impact of the European debt crisis and exploring measures to strengthen the region’s economies at their annual meetings today in Montevideo, Uruguay. The meetings will continue through March 19.
“The bank is discussing a series of instruments countries would be able to tap in a preventative manner for priority spending projects,” Echebarria said in Montevideo, without giving details on the size of the proposed fund.
Established in 1959, the IDB is the biggest source of development financing for Latin America and the Caribbean, according to its website. The lender has 48 members, including the U.S., Brazil and Mexico.
In January, the IDB’s board approved a $70 billion capital increase. Members will inject $1.7 billion over five years and pledge to make the remaining amount available if needed, the IDB said in a statement.
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