IDB Organizational chart (IDB website)
Membership
The IDB has 47 member countries: 26 borrowing member countries in Latin America and the Caribbean (all of Latin America’s recognized countries, except Cuba), and 21 lending member countries, including the United States, Canada, Japan, South Korea, 16 European countries (Austria, Belgium, Croatia, Denmark, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Slovenia, Spain, Sweden, Switzerland and the United Kingdom), and Israel.
Board of Governors
The highest authority of the IDB is vested in the Board of Governors, whose members are usually finance ministers or presidents of central banks. One Governor and an Alternate Governor are appointed by each member country. While the Board of Governors is charged with making major policy decisions, it is the IDB’s Board of Executive Directors that meets weekly to approve the projects and policies the IDB finances for implementation in the borrowing countries.
Board of Executive Directors
There are 14 Executive Directors (EDs), each with an Alternate (Alt ED), sharing among them the representation of all the member countries. Voting power of each ED is determined by the contribution to the IDB’s ordinary capital made by the member countries that the ED represents. By this calculation, among the Bank’s lending members, the United States is the single largest shareholder, with approximately 30 percent of the voting power, followed by Japan, 5 percent; Canada, 4 percent; and other lending members combined, 11 percent. The 26 Latin American and Caribbean borrowing members collectively control 50.02 percent of the IDB’s shares. Here Argentina and Brazil share top honors, with 10.75 percent of the voting power each, followed by Mexico with 6.9 percent.
Although voting power is important in terms of political leverage, IDB Executive Directors do not actually “vote” to approve projects and policies. Rather, operations are vetted until consensus is reached, and the weekly Board meetings occur when all EDs acknowledge their approval of the operation. As a consequence, the IDB Board has never voted down an operation brought before them, and only the U.S. ED has abstained, twice in 2003.
As the ultimate decision makers to finance operations, EDs are an important point of engagement for civil society organizations seeking to exercise influence and convey information concerning the operation at hand.
Regions
Currently, the IDB organizes Latin America into three regions (RE 1, RE 2, and RE 3) for the purposes of preparing and tracking the operations financed. Each of the three regional/operational departments has specialized units focused on social programs (usually health and education), environment and natural resources, finance and infrastructure, and, most recently, state and civil society. The IDB also staffs Country Offices in each borrowing country. These are headed by the IDB Representative, each of whom has an alternate, and include technical specialists whose responsibilities correspond to the specialized units at IDB headquarters. The countries included in each region are as follows:
RE 1: Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay
RE 2: Mexico, Central America, the Dominican Republic, and Haiti
RE 3: The Caribbean, Colombia, Ecuador, Guyana, Peru, Suriname, and Venezuela
In late 2006 the IDB began a process of organizational restructuring that may significantly reshape the regional structure and management of the instititution.
Management
Since October 2005, the IDB managerial structure has been subject to a shake-up, owing mostly to the first significant turnover in leadership of the institution in 17 years. At that time, Enrique Iglesias, the former Foreign Relations Minister and Central Banker of Uruguay who was one of the longest serving presidents of the IDB, ceded the top job to Luis Alberto Moreno.
Moreno is a Colombian national with experienc in public service (he was a former Economic Development
IDB
IDB President (2005 - present) Luis Alberto Moreno
Minister in Colombia), banking and finance, and journalism. Just before taking office, Moreno served as Colombia’s Ambassador to the United States for seven years. In this post, his most notable achievement was the successful effort to build bipartisan support for passage in the U.S. Congress of “Plan Colombia,” which consisted of more than $4 billion in military and economic assistance programs for Colombia. He also lobbied hard for negotiations towards a Colombia-U.S. Free Trade Agreement. This made him well known in Washington, D.C. political circles and a clear favorite of the Bush Administration for the IDB presidency, once Iglesias announced his intention to step down (reportedly because of a prior arrangement, that he would be approved for a fourth presidential term only if he agreed to serve just two years of it). It also provoked concern among some observers in civil society that, as noted by the Council on Hemispheric Affairs, “[W]ith Paul Wolfowitz as the president of the World Bank, [a Moreno presidency] would mean that two of the most relevant lending agencies would be controlled by individuals with a military rather than development vision.”
Given the length of Iglesias’s tenure at the Bank and the political backing Moreno seemed to have upon assuming the top job, it was assumed that the new president would look for some way to reorganize the institution. Moreno’s first moves were predictable enough—within just a few months, a number of top managers left—but this had the result of effectively breaking up a clique of U.S. nationals who were concentrated in the upper echelons of the Bank, which was a welcome change to many. But approval soon turned to apprehension as Moreno announced his intention to pursue decentralization of headquarters-based staff, apparently in response to a drive at the Board level to find ways to bring the IDB “closer to its clients.” In late 2005 a consulting firm was hired to conduct a wide-ranging survey of IDB headquarters.
By the date of next IDB Annual Meeting at Belo Horizonte, Brazil in April of 2006, Moreno had put forward a significant proposal to "realign" the Bank. This proposal built on changes initiated with the "New Lending Framework" introduced at the 2005 Meeting in Okinawa, but ultimately went much further, suggesting a fundamental institutional restructuring of the IDB. This process of organizational restructuring, formally approved by the Board in December of 2006, may significantly reshape the regional structure and management of the instititution. Details of the proposed restructuring are slowly filtering in.
Meanwhile, President Moreno has pursued a series of changes that are attempting to focus more of the Bank’s work on micro-level development institutions and processes while also responding to the imperative to keep the IDB relevant and active as a lender.
Some of the most recent manifestations of the new course being set by Moreno and his top managers are as follows:At the April 2006 Bank Annual Meetings in Belo Horizonte, Moreno announced his intention to increase the Bank’s support for sub-national governments, such as provinces and municipalities, which in various countries have been taking greater responsibility for social services in the context of decentralization. Measured in constant dollars, the IDB’s average lending to municipalities has tripled in the last twenty years, from US$104 million/year in the 1980s to $298 million/year in the early 1990s, and the Bank claims that demand for this type of assistance is rising still.
Also at the Annual Meetings, the Board of Governors approved a proposal that expands the scope of operations eligible to receive financing without sovereign guarantees. Strongly supported by Moreno, the new policy allows the Bank to provide financing without sovereign guarantees to projects in all sectors, beyond the earlier restrictions that applied to private sector projects and limited their eligibility to investments in infrastructure, domestic capital market development, and international trade finance. The idea is not to increase the overall amounts being provided under such circumstances, as all such non-sovereign guaranteed financing cannot exceed 10 percent of the IDB’s total outstanding portfolio (which is the ceiling for lending to the private sector established by the Board of Governors in 2001). Read the Revised Proposal that puts forward the new paradigm, and which generated quite a bit of discussion and dissenting opinions before it was finally approved.
Moreno has personally overseen the preparation of a new regional initiative for fighting poverty in Latin America. Entitled “Building Opportunity for the Majority,” the plan was launched in mid-June 2006. It initially involves the creation of a US$1 billion loan fund for small and medium-size businesses, a 50 percent increase in lending for job training, and a 100 percent increase for financing for basic infrastructure projects aiming to benefit low-income communities, to $1 billion a year by 2011. Read More
When it comes to implementing the kinds of oversight mechanisms needed to account for the impacts of these and related changes, or to strengthening standards and systems for transparency and accountability at the IDB overall, Moreno’s intentions are much less clear. At this point it is still not certain if he has the vision or political will needed to push through a number of proposals for overdue policy and structural reforms that he has inherited from Iglesias, or to promote strict compliance with those that have been passed. For more information, see “Policies and Strategies” below.