Canada Offers New Support to the Inter-American Development Bank

(The Prime Minister’s Office)

This year’s Summit of the Americas takes place in the context of the worst global economic crisis in generations. While the crisis began in developed countries, its effects are hitting emerging and developing economies with increasing severity. Canada’s focus for the Summit is encouraging free trade and discouraging other countries from moving back to protectionist measures.

With the attention of the region on the economic situation, the Summit is an opportunity to connect Canada’s strengths and effective response to the crisis to the circumstances and needs of regional partners while building on the outcomes of the London G20 Summit. Canada is working towards recovery in its own economy and providing leadership internationally:

• Canada’s strong stance against protectionism and in favour of further liberalization is opening new markets for our partners in the hemisphere

• Fixing the financial system is essential to restoring credit and investment flows to emerging economies

• Canada’s banks are solid thanks to our sound approach to financial sector planning

• Accelerated, effective fiscal stimulus contributes to global demand and recovery

• Canada is making a substantial contribution to strengthening the resources of the international financial institutions, especially the IMF and the IFC global trade facility.

It is with this in mind that Prime Minister Stephen Harper announced today [Saturday] that Canada will work to temporarily increase the Inter-American Development Bank’s (IDB) lending capacity in response to the financial crisis. Today’s announcement responds to the urgent capital needs identified by the IDB as essential to an effective response to the effects of the economic crisis in the Americas.

“Canada is the only country taking a leadership role in responding to a critical need in such an innovative way,” said the Prime Minister. “This has not been done before and is a very significant contribution.”

This timely increase in support to the IDB will provide countries in the region with greater access to credit to promote economic growth, an essential element of economic recovery. It will double temporarily Canada’s lending capital at the IDB.

The IDB is a valued regional institution in which Canada plays an active role. The Bank is the main source of multilateral funding for economic, social and institutional development in Latin America and the Caribbean, and Canada is a non-borrowing regional member. Canada joined the Bank in 1972. The IDB is the oldest and largest regional development bank in Latin America and the Caribbean. Canada will host the annual meeting of IDB Governors in 2011.

For more information on Canada’s partnership with the IDB can be found here.