Díaz-Granados: CAF Urges Action on Special Drawing Rights

UN secretary general, António Guterres, last host of the summit held these days in Seville, It is clear: To give way to the current financing crisis for development projects, in full withdrawal of many donor countries in the West (United States, the United Kingdom, France …) it is essential to further involve regions of regional development banks. They are, in short, those who know the land and real financial needs. But they need more resources to help countries with medium and low income and accelerate, thus, their definitive jump to prosperity.

CAF, the most important of these entities in Latin America and the Caribbean, has urged Monday to use the Special Giro Rights —In international reserve actives issued by the International Monetary Fund (IMF) and Clearly underlined in the field of development– To “strengthen the financial capacity” of these institutions and irrigate the real economy. “It is time for this asset to be used to strengthen the financial capacity of development banks,” said its executive president, Sergio Díaz-Granadosat a press conference held in the Andalusian capital. “You have to go to action and strengthen [con ellos] The balance sheets. We have a great opportunity. ”

The Andean Development Bank – although expanding for years throughout the region, to the point of having far exceeded in IDB -size – has been, to date, the only one that has taken advantage of the rights of rotation: in 2023, after the pandemic. “And it was shown that they can be used, to leverage debts or reinforce the balance,” Diaz-Granados emphasized. However, “a large part follow in the IMF accounts: there are more than 300,000 million that we should urgently channel towards development.”

“If we used more special turn rights [pueden intercambiarse a cambio de monedas de libre uso]we could do much more. It is true that there is a legal debate around, but we must see that time passes and that there are many people in poverty, ”Diaz-Granados urged.” We must reconcile these dogmatic positions with the reality we are living, and use this instrument in favor of development banks. “

Throughout the world, the Chief of Caf-Banco de Development of Latin America and the Caribbean has underlined, there are almost half a thousand development banks. A figure that, far from falling or stabilizing, has not stopped growing in recent years. “However, we only cover 15% of the development needs for development by 2030. That is why we must widen them; not one or two, but all,” he added in tune with Guterres.

In December 2021, CAF approved the greatest capitalization of the bank’s history. A bet that Díaz-Granados recalled, “superior to that of the World Bank a year before.” Now, however, “all development banks need to make a new effort to improve and grow if we want to reach the goals set by 2030.”

Mercosur

After the appointment of Seville, the EU countries and Latin America will see each other again in Santa Marta (Colombia), at a summit called-in the words of Díaz-Granados-to “mark a milestone” in one of the best bilateral economic relations of the planet. By then, there are options that, after an eternal negotiation, the twenty -seven and the Mercosur countries arrive with its commercial agreement ratified by the countries of the old continent. At last.

“Hopefully this year: with the world under discussions on tariff walls, a trade -based trade signal would be sent in times of tariff walls,” said the head of CAF. He would be, he recalled, the creation of the largest free trade area. “It would cover more than 22% of world GDP, and 97% of the economy of Latin America and the Caribbean would be covered by predictable rules of trade in goods and services.”

With more than 600,000 million euros, “Europe is already the largest investor and the largest employment generator in Latin America and the Caribbean. And what we want is that this is only a starting point, not of the end,” added Díaz-Granados.

The twilight of multilateralism

The world has passed, in the barely six months after Donald Trump’s return to power, of a perfect but effective multilateralism to the fierce unilateralism of strong men and hard power. A radical and fast turn, very fast, that permeates – with and without microphones in between – in all the meetings of these days in Seville, the city that hosts the IV Financing Conference for the Development of the United Nations.

In that cultivation broth, Díaz-Granados has reaffirmed the Latin American bet for the multilateral. “The challenges we have are not individual, but collective: they are problems for which there are no borders,” he emphasized. “Our commitment is to continue growing the seed that was planted in 1968 [cuando nació la entonces corporación andina] and that has not stopped growing. Latin America bets on multilaterality. ”