The Inter-American Development Bank (IDB) supports development in Latin America and the Caribbean through lending to governments and government organizations. It raises funds through bonds secured by member countries and has a triple-A credit rating. The bank has 48 member states, with 22 non-borrowing members. The IDB has total ordinary capital of just over $100 billion USD, with 4% paid out and the remaining 96% callable capital. The bank has faced criticism for investments that are considered destructive to the environment and indigenous peoples.
The Inter-American Development Bank, sometimes referred to simply as IDB, or occasionally as IADB, is a group intended to support development in Latin America and the Caribbean. It mostly lends itself to governments or government organizations, although there are some exceptions to this. The Inter-American Development Bank has been in existence since 1959 and is a major engine of economic financing for the region.
Funds are raised by the Inter-American Development Bank through the issuance of bonds, which are sold at standard interest rates. These ties are largely secured by member countries which include some of the richest countries on Earth. Because of this strong collateral, the Inter-American Development Bank maintains a consistent triple-A credit rating, allowing the bank to offer interest rates to Latin American and Caribbean nations that are competitive with the best interest rates that private banks they offer to the private sector.
It should be noted that while the powerful nations that guarantee Inter-American Development Bank funds take responsibility for the bonds in the event of default, they are not actually investing capital to lend to the countries. This means that joining the Inter-American Development Bank has minimal impact on the countries themselves, as their budgets are not affected. And while their budgets would be affected if a large-scale default were to occur, that’s unlikely to happen, even under dire enough circumstances.
There are 48 states that collectively own the Inter-American Development Bank, and of those 48 states, 22 are non-borrowing members who are members only to influence policy and secure bonds. These 22 non-loan members are Spain, Switzerland, United States, United Kingdom, Norway, Italy, Israel, Japan, Republic of Korea, Netherlands, China, Belgium, Croatia, Austria, Canada, Slovenia, Sweden, France, Finland , Germany, Portugal and Denmark. The remaining 26 nations are members that can borrow funds from the bank to support government projects, and they are Brazil, Mexico, Argentina, Chila, Columbia, Venezuela, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Peru, Panama, Paraguay, Uruguay, Bolivia, Belize, Costa Rica, Guyana, Suriname, Trinidad and Tobago, the Bahamas, Barbados, Haiti, the Dominican Republic and Jamaica.
The bank has total ordinary capital of just over $100 billion United States Dollars (USD). Of that, just over 4%, or $4 billion United States Dollars (USD), is actually paid out. The remaining 96% is callable capital, pledged by Member States as capital subscriptions. This working capital goes to a number of different projects that governments and government organizations wish to pursue, and in some cases may find its way to private sector companies through the Inter-American Investment Corporation, or IIC, or directly through the ‘Inter-American Development Bank.
In theory, the bank exists to help promote economic prosperity in the Latin American and Caribbean countries it finances, and through this economic prosperity it is intended to support social good. The group faces a lot of criticism, however, for its investments, which many consider to run counter to these goals. Many watchdog groups accuse the Inter-American Development Bank of promoting economic policies that are destructive to both the general environment and the rights of indigenous peoples in the regions where it operates.
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