A summit to build the world to come

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Development banks are trying to reach global commitments so that prosperity is no longer a mere promise.

Juan E. Notaro
FONPLATA Executive President

There is a group of institutions in the world whose assets represent more than twice the amount of money needed to buy Apple, Microsoft, Alphabet (Google’s parent company), Amazon, and Facebook: USD 11.2 trillion, of which USD 2,300 billion are invested per year.

I am referring to public development banks, institutions that enjoy independent legal status and financial autonomy, that provide risk capital to fund projects that are usually of no interest or not profitable for commercial banks.

These banks operate at national (covering the whole country), subnational (province, state, or department), regional, international (composed of two countries), and multilateral (with several member countries) levels.

There are about 450 of these banks in the world. The most important ones in Latin America and the Caribbean are IDB, CAF – Development Bank, BCIE, and FONPLATA – Development Bank, the multilateral institution I am honored to chair.

Essentially, the mandate of these banks is to compensate market’s inconsistency. Therefore, their main funding areas are micro, small, and medium enterprises, rural areas, women, childhood, infrastructure works, among other vulnerable sectors and groups.

The post pandemic economic recovery will demand that all these 450 banks, with more than USD 11 trillion in assets and a mandate to help the most vulnerable, make a coordinated effort to boost their impact on pending issues.

Therefore, the World Federation of Developing Financing Institutions and the International Development Finance Club have invited us to a virtual or in person meeting that will be held in Paris on 10-12 November.

The Finance in Common Summit”, the first global summit of all public development banks, aims at building a new global coalition to address the economic challenges of the planet.

Many of these challenges existed before the pandemic. Others are related to the compliance with the UN Sustainable Development Goals (SDGs), an ambitious global agenda to move forward towards a fairer, more inclusive and more sustainable world.

The economic slowdown associated to the COVID-19 confinement measures may lead many developing nations to not reach the SDGs or, even worst, to take a retrograde step in the domain of social gains.

The organizers of the summit believe that public development banks know how to link short-term needs with long-term transformations and to redirect financial flows towards the sustainable development goals.

Prior to the summit, a research conference will take place on 9-10 November, during which a consortium of prominent academic institutions will present research papers and share insights about how public development banks can produce better finance over the long term.

It is an unprecedented meeting in the history of development banking, as unprecedented as the huge challenge that we are currently facing, both institutions and humankind.

Additionally, it will be a key milestone on the way to the crucial events of 2021, notably the Climate Change Conference (COP26), the UN Biodiversity Conference (COP15), and the Generation Equality Forum, by reconciling step entire finance community in support of the common action for climate and the UN Sustainable Development Goals.

With more than USD 11 trillion in assets and an average annual investment above USD 2,300 billion, the coordinated work of development banks within the framework of the UN SDGs can achieve a great deal.

This effort is supported by FONPLATA – Development Bank and, as I am personally committed to it as Executive President of the institution, we will be in Paris to help build the world to come.

Text originally published in the monthly column of Juan E. Notaro in the Huffington Post.