Ilan Goldfajn is a quiet man who became president of the Inter-American Development Bank (IDB) last November when it was in turmoil. The dismissal of the previous president amid a scandal that caused him to lose the trust of governors left open wounds, grievances and distrust. The new president took office promising to build bridges. Once the institution has calmed down and some normality has been restored, Goldfajn's roadmap envisages a thorough reform of the IDB for the period 2024-2030, increasing the effectiveness of its development-enhancing measures.
Goldfajn held a press conference this Thursday in Washington to take stock of the year and present the President's report summarizing the achievements of this year as well as the challenges and priorities for the future, which was presented to the IDB Board this Wednesday . The Brazilian, who has experience as governor of Brazil's central bank and as a senior manager at the World Bank, came to the organization with clear ideas and has outlined an agenda of reforms since his arrival, most of which, however, still need to be approved by next year's meeting in the Dominican Republic. “Looking back, a lot has been achieved, but there is still a lot to do,” he emphasizes.
At the press conference, Goldfajn pointed out that the Latin American and Caribbean region faces three main challenges: the social challenge and development; the fiscal challenge with public finance problems and the economic challenge with lack of growth. In this difficult context, he explained, the institution has set three priorities.
The first is to reduce poverty and inequality by investing in food security, gender equality and inclusion of diverse populations, social protection and human capital development (education, health, etc.). The second is about addressing climate change, including protecting the Amazon, reducing greenhouse gas emissions, preserving nature and biodiversity, and strengthening countries' climate resilience and adaptation. And thirdly, it is about driving sustainable growth, with the aim of significantly increasing the region's real GDP per capita, in particular through sustainable physical and digital infrastructure, increasing productivity and innovation, and initiatives to promote regional integration.
To achieve these priorities, the IDB is undertaking a series of institutional and structural reforms, as well as a change in culture and the way it measures success. For Goldfajn, what matters is not the amount of dollars awarded or the number of projects approved, but rather the concrete, measurable and large-scale impact those projects have on people and countries.
Annual balance sheet
Despite this report and in the absence of a better measurement, the IDB continues to prepare its balance sheet in cash. This year the bank approved 92 projects with a government guarantee for a total of $12,722 million. The approval program included 74 investment projects worth a total of $7,826 million and 18 political reform projects worth a total of $4,896 million.
By the end of 2023, the bank plans to disburse $10,038 million for government-guaranteed projects. This amount is 6% lower than the amount paid out in 2022, but 10% higher than the annual average for the pre-pandemic period (2016-2019).
According to Goldfajn, IDB Invest, the private sector arm of the IDB Group, has achieved its operational goals. Total commitments, including its own account and mobilizations, were estimated at $10 billion at the end of the year.
Regarding the change in the internal environment, Goldfajn says: “For me, it was a professional and personal priority to strengthen dialogue and build bridges within the bank.” Therefore, it was natural to listen more to our employees, and the message was clear: they wanted to a healthy work culture in which different opinions can be expressed, respect and fairness prevail and merit and innovation are rewarded.” The President of the IDB assures that transparency and performance orientation in hiring have improved. There has also been a return to more personal work.
“Our new focus on effectiveness and development outcomes also requires a cultural change within the bank. Fostering a culture of impact rather than borrowed amounts requires changing incentives and processes: a global transformation. Next year it will be important to advance the changes that will help us achieve this goal,” says the President of the IDB.
The IDB's next milestone in the near future is the 2024 annual meeting. “Our work in the coming years will be largely determined by the decisions of our governors,” says Goldfajn. “When the new institutional strategy is adopted, we will begin the detailed design and implementation of the entire reform package. If our governors approve the plans for IDB Invest 2.0 and its capitalization, as well as the proposed increase in resources for IDB Lab, we must prepare for an IDB group next year that is not only bigger but also significantly better,” he adds added. the annual balance report entitled: “The IDB is moving forward at full speed.”
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