New Approach to Combat Poverty

The OAS Inter-American Agency for Cooperation and Development (IACD) has
developed an innovative approach to enlist the private sector in its campaign to
accelerate development in Latin America and the Caribbean. Through a “Best Practices Fund,” the Agency will open new avenues for the transfer of already proven approaches, or “best practices,” and pre-approved technology solutions to help governments in Latin America and the Caribbean combat poverty. The goal is to provide access to the highest quality, most fairly priced technical solutions to implement Summit mandates. The Agency is focusing its initial efforts on three key priorities: alleviating poverty, improving education, and preparing to meet the technological challenges of the information age. 

During the OAS General Assembly in Costa Rica, the IACD signed two agreements designed to expand best practices. An agreement with the government of Costa Rica aims to tap that country’s expertise in several areas—biodiversity, distance education and the protection of citizens’ rights through the strengthening of ombudsmen—to benefit other countries. The IACD also signed a cooperation agreement with Empresas Públicas de Medellín E.S.P. of
Colombia to design municipal development programs for Latin America and the Caribbean. Empresas Públicas is a decentralized entity which provides public services such as water, energy and telecommunications to one of Colombia’s largest metropolitan areas. 

The Best Practices Fund is also developing a new financing option for the countries of the hemisphere to access technical cooperation products and services that have been subject to the Agency’s pre-qualification procedures. It has signed agreements with several private sector commercial and investment banks to provide financing for social development projects. The Agency has signed memoranda of understanding totaling (U.S.)$465 million with First Union Bank, the U.S. Overseas Private Investment Corporation (OPIC), Scotiabank, Export Development Corporation of Canada (EDC), Riggs Bank NA and Bank of America. It is also exploring new co-financing arrangements with subregional development banks such as the Corporación Andina de Fomento (Andean Development Corporation, or CAF), the Central American Bank of Economic Integration (CABEI) and the Caribbean Development Bank (CDB) to help them expand their poverty alleviation projects. 

The Agency has tested the feasibility of the Best Practices Fund with a special committee of ex-finance ministers and experts including Domingo Cavallo of Argentina, Manuel Hinds of El Salvador, Guillermo Chapman of Panama, Richard Fletcher of the Inter-American Development Bank (IDB) and Javed Burki, former World Bank Manager of Latin American Programs. This high-level group endorsed the Agency’s plan as filling a much-needed gap in development finance and as a pragmatic response to the Summit’s request for greatly increased technical cooperation and new sources of finance. Following are some of the benefits of the Best Practices Fund:

• The focus on specific products and services enable the Agency to focus on specific country issues by expediting delivery of services in specific problem areas.

• The pre-qualification of the “best practices” suppliers will enable the Agency to assure
better quality to smaller countries that lack the depth of human resources to research and implement new advances and technologies.

• The use of private sector resources will allow the countries to tap vast new reservoirs of funding for social development, education, poverty alleviation and other Summit mandates.
 

The Inter-American Agency for Cooperation and Development (IACD) was created in November 1999, during a special session of the OAS General Assembly.   

For more information: Ron Scheman, Director General, Inter-American Agency for Cooperation and Development

Tel: (202) 458-3510
Fax: (202) 458-3526

rscheman@iacd.oas.org 

Last updated: September 2001