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“IN THE SHORT TERM, THE FINANCIAL CRISIS WILL IMPACT OUR COUNTRIES’ QUALITY OF LIFE”, AFFIRMED IDB PRESIDENT DURING OAS CONFERENCE

The President of the Inter-American Development Bank (IDB), Luis Alberto Moreno, said today, that “in the short term, the global financial crisis will affect the quality of life in our countries; given the impact it will have on the economic activity and consequently, on employment and poverty,” during the Thirty-Second Lecture Series of the Americas of the Organization of American States (OAS).

This presentation entitled: “The Financial Crisis and its Impact on the Americas” was given in the presence of the OAS Secretary General, José Miguel Insulza. In his speech, Moreno affirmed that “in 2009 the region’s growth “will be around 2%, or even lower, which will undoubtedly affect negatively employment levels.”

Likewise, Moreno warned that “the expansionary economic policies that can be implemented as a response to this deceleration of the regional growth may result on higher inflation, -compared to the last five years-, when the Latin-American and Caribbean economies were experiencing one-digit price increases.”

Despite this difficult scenario, the Head of the IDB expressed that currently, the region is better prepared to face the crisis, both at the economic and at the social levels. In this sense, he pointed out that “it is apparent that the region has learned from painful experiences left by the 31 financial crises it went through during the last 25 years.”

Moreno described as “normal” the fact that the economy’s slow down in the United States generates a greater impact on those countries that receive significant amounts of remittances originating in the U.S. He pointed out that the crisis’ influence on countries’ ability to grow will depend on three factors: the foreign trade structure, the fiscal revenues, and the access of those countries to international credit markets.

After a reference to the long-term challenges that the region will be facing given the current crisis; the President of the IDB mentioned that “education is highly important, and the region is not offering younger generations the education they need to confront the challenges of the XXI century. In a global economy which has knowledge as the principal engine for progress, basic literacy is neither enough for personal development, nor for country development.”

At the conclusion of his speech, President Moreno expressed himself to be in favor of integration and warned about the temptation of protectionism during this time of economic crisis.

“History has shown how crises tend to hamper the efforts for commercial integration. It is crucial to avoid the current economic tendencies that drive our countries to protectionism, which is usually marked by a limited perspective. Instead, a greater regional and international integration can be the source of incentives for improving competitiveness and increase employment and wealth,” he said.

Finally, Mr. Moreno stated that the IDB has responded “with leadership and promptness” to the current crisis “positioning itself as a close partner, sensitive to the countries’ needs at this moment of special gravity.”

In this sense, he explained how the IDB “acted promptly, launching the Liquidity Program for Growth Sustainability, last October. This window of opportunity makes available 6.000 million dollars as a key tool for countries to be able to deal with transitory illiquidity situations.

The President of the OAS Permanent Council and Permanent Representative of Brazil, Ambassador Osmar Chohfi introduced the IDB leader during the Thirty-Second Lecture Series of the Americas. After Moreno’s presentation, the Head of the OAS Secretariat for External Relations, Irene Klinger, moderated the question and answer session in which diplomats, high level officials, academics and students took part.

Luis Alberto Moreno was elected President of the Inter-American Development Bank during a special meeting of the Bank’s Board of Governors at IDB headquarters in Washington, D.C. on July 27, 2005 and took office on October 1, of that same year.

Reference: E-006/09