DEPARTMENT OF THE TREASURY

WASHINGTON, D.C.

ASSISTANT SECRETARY

Statement by the Temporary Alternate Governor for the United States of America

Alexia Latortue

On behalf of Treasury Secretary Yellen, I would like to thank the Government and people of 

Panama for their warm hospitality and welcome as well as Finance Minister Clarke and his team 

for their leadership in preparing for this meeting. We are meeting at an important time for the 

IDB Group and the region. I would like to recognize that this is President Goldfajn’s first 

Annual Meetings since his election as IDB Group President. In just a few months, we have seen 

his energetic passion for the institution and all countries and people of this diverse region. 

President Goldfajn is off to a strong start, and we particularly welcome his commitment to 

increasing the effectiveness of the work of the IDB Group, to focusing on staff morale, and to 

open and transparent communication. We look forward to hearing from management on their 

detailed prioritization and objectives under his leadership. We congratulate Finance Minister 

Alexander for his election as Chair for these Annual Meetings and thank him in advance for the

work with Governors over the year to come. I would also like to warmly thank the staff of the 

Inter-American Development Bank (IDB) Group for their tireless efforts to support the 

aspirations of the people of Latin America and the Caribbean, especially for the grace they have 

shown as the IDB itself has been through a period of significant upheaval. We also thank Reina 

Irene Mejía Chacón, who ably stepped into the role of Acting-Interim President, for her help 

with the transition.

As we gather for the first in-person Annual Meetings since 2019, I am proud to relay the BidenHarris Administration’s firm commitment to working with the IDB Group and all shareholders to 

support strong, sustainable, and inclusive economic growth undergirded by commitments to

democracy, equality, transparency, anti-corruption, and the rule of law. At last year’s Summit of 

the Americas, President Biden announced the support of the United States for consideration of 

new capital for IDB Invest. Also at the Summit of the Americas, the Americas Partnership for 

Economic Prosperity (APEP) was launched to advance the economic, social, and environmental 

well-being of Latin America and the Caribbean. Our Partnership to Address the Climate Crisis 

2030 (PACC 2030) will work to strengthen development finance and enhance green 

infrastructure so that our Caribbean partners will be better positioned to address the challenges of 

climate change. The IDB Group is a vital partner in delivering on these initiatives. 

Regional Economic and Political Developments

Most countries in the region were making important strides in recovering from the COVID-19 

pandemic by early 2022 only to confront new challenges associated with Russia’s brutal and 

unjustified war on Ukraine, rising inflation, and tighter global financial conditions. Robust 

growth in 2021 and 2022 came on the back of the reversal of pandemic economic closures and 

large fiscal expansions. While low growth in the region will return, governments will struggle to 

support their economies as the pandemic depleted fiscal cushions and increased debt levels. 

A focused and robust monetary response from the region’s central banks has slowed price 

growth, but the pace of deceleration remains uncertain. U.S. inflation data are currently 

signaling a longer tightening cycle, creating further headwinds for the region’s 
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economies. Aggregate sovereign bond spreads in the region have narrowed from November 

highs, but there is considerable uncertainty on both the trade and financial fronts. 

The challenges for the region are significant. Per capita income and poverty rates have yet to 

return to pre-pandemic levels, and long-term potential growth of just two percent belies 

structural barriers to improving these critically important development indicators. This will be 

politically challenging for governments, especially given the pent-up demand for better 

economic outcomes, stronger governance, and more effective delivery of public goods, all of 

which predated the pandemic. 

The resulting economic strain is one factor that leads people to search for opportunity elsewhere. 

Latin-America and the Caribbean needs to generate more economic growth that is inclusive to

create more jobs and opportunities in the region. No country wants to lose their entrepreneurs 

and workers to emigration. We strongly encourage the IDB Group to work with countries and 

firms to develop skills, and to take advantage of the realignment of global supply chains to 

attract higher value-added industries and create new, quality jobs. 

We look forward to working with the IDB Group and our partners in the region to further 

address the root causes of migration and create the conditions for robust, sustainable, and 

inclusive private sector growth. IDB Group expertise and capital can be leveraged to push 

structural reforms that increase potential growth, boost employment, and reduce poverty.

Inter-American Development Bank Group Reforms and IDB Invest 2.0

When we convened last year, Governors mandated IDB Group Management to undertake further 

reforms to improve development effectiveness; assess options for balance sheet optimization;

address the needs of fragile and conflict-affected states and regions; reduce poverty and 

inequality; develop a strategy to address the unique needs of the Caribbean; review lending 

instruments and allocations; and better address the region’s needs in areas like climate, labor 

markets, social protection, and health and education. Governors also directed Management to 

identify and strengthen synergies among IDB, IDB Invest, and IDB Lab. In addition, Governors 

tasked IDB Invest to craft a new vision and business model to increase impact, mobilize more 

private capital to the region, and support growth-enhancing investments.

We recognize that the extraordinary circumstances of the leadership transition meant that IDB 

was unable to complete the work that Governors mandated. We welcome President Goldfajn’s 

commitment to complete the IDB Group’s operational and institutional reforms, while also 

preparing the new Institutional Strategy to guide the IDB Group’s work in the next five years. 

This approach binds the timeline of IDB Group reforms and the next Institutional Strategy with 

implementation of IDB Invest’s new vision and business model. Together with IDB Lab’s 

reimagined operational model, the three arms of the IDB Group are poised to work in concert to 

maximize the Group’s contribution to the region’s uptake of green technologies, its digital 

transformation, and strengthening food security and quality infrastructure.
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The IDB Group and Evolution of Multilateral Development Banks (MDBs)

Secretary Yellen is spearheading an effort for MDBs to evolve and more effectively address 

transboundary challenges – such as climate change, pandemics, fragility and conflict – which is 

critical to protecting and enhancing delivery on poverty reduction and the Sustainable 

Development Goals. The IDB Group reforms and conditions in the Latin America and 

Caribbean region are well aligned with the goals of the MDB evolution agenda, and we look 

forward to working with other shareholders to pursuing the necessary changes. 

Climate change is one of the transboundary challenges that IDB reforms are well-positioned to 

address. We look forward to the IDB Group fulfilling its commitment to align its operations 

with the goals of the Paris Agreement as of January 1, 2023. Making financial flows consistent 

with a pathway towards low greenhouse gas emissions, elevating climate-resilient development 

and adaptation investments is critical for the region’s sustainable, long-term growth. And, 

implementing “hurricane” or debt-deferment clauses, which allow borrowers to temporarily halt 

loan repayments after a severe natural disaster, will also enable the region’s vulnerable states to 

more quickly recover and rebuild following an extreme event. The region has an important 

opportunity to become a world leader in supporting the global transition by investing in green 

technology and green energy. 

To do more to address global and regional challenges that threaten and undermine progress on 

poverty and inclusive growth, MDBs will need additional financial capacity. This must first 

focus on fully utilizing existing resources, especially at institutions that have strong capital 

adequacy – like the IDB. There are many recommendations from the G20 independent review of 

MDB capital adequacy frameworks that we believe are worth exploring and can contribute to 

increased financial capacity. We are pleased that IDB has been developing balance sheet 

optimization efforts aligned with the recommendations. In addition to stretching its own balance 

sheets, the IDB Group must foster reforms to help countries more effectively mobilize and 

allocate domestic resources and enable and incentivize private capital mobilization toward global 

challenges.

Discussions for New Capital for IDB Invest

IDB Invest’s New Vision and Business Model represents an important opportunity to mobilize 

the higher levels of private sector investment that are critical for sustainable and inclusive, longterm growth and addressing global and regional challenges, while making more efficient and 

effective use of its own resources. As President Biden has stated, the United States is ready to 

begin negotiations on providing new capital to IDB Invest to support the New Vision and 

Business Model. Armed with greater capacities to support local currency financing, de-risking, 

and capital mobilization, IDB Invest will be able to accelerate the growth of the private sector 

across the region. The United States calls on Management to present the capitalization proposals 

for IDB Invest and the new IDB Group Institutional Strategy, and make progress on outstanding 

IDB Group reforms, to the Executive Boards by October.
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The United States is committed to working with other IDB Governors, Executive Directors, and 

IDB Group Management to realize this comprehensive and exciting agenda for renewing the 

IDB Group’s support to the region’s growth and development.