BASSETERRE, St. Kitts & Nevis: This country hopes to benefit from an Inter-American Development Bank (IDB) war chest of US$20-million to be used to cut the cost of cross-border trade, transport and logistics, and expand trade in the Caribbean and Central America.
The Washington-based financial institution has determined that a combination of poor infrastructure, differing regulations and other measures hampering trade has left regional trade far below its potential.
It was reported that cross-border projects could help lower transaction costs, boost export capacity and lead to a better distribution of trade benefits.
The IDB said it will work with governments in the region to identify priority projects, with an emphasis on Central America and the Caribbean. The bank is the largest source of development finance in the Americas, and a trust fund of US$20-million in contributions and pledges from Canada, Mexico, Spain and the U.S. will support projects to expand trade in Latin America and the Caribbean.
Canada has contributed Cdn$10-million, double its original pledge; the U.S. has added US$5-million and Spain has paid another US$2-million into the trust fund, the bank has stated.
According to the IDB, Mexico pledged US$3-million and Colombia expressed interest in contributing, marking the first time borrowing member-countries participated in an IDB-managed multi-donor trust fund.
“These resources will enable the IDB to provide Latin American and Caribbean countries incentives to invest in cross-border projects and leverage loans, lowering overall project costs,” the IDB said.