Foreign Policy’s Latin America Brief this week highlighted key developments such as The Inter-American Development Bank’s (IDB) decision to boost climate finance lending, the resignation of Haiti’s acting prime minister, and Latin American translations dominating the International Booker Prize. The IDB, including 48 member countries mostly in the Western Hemisphere, announced a plan to increase lending by $112 billion over the next decade, with a focus on climate finance. Developing countries, in need of more financial support to address climate change, welcomed the news. The IDB aims to make reforms to its lending strategies to achieve this increase, with potential initiatives such as seeking approval from the International Monetary Fund to utilize Special Drawing Rights as capital. Other proposals include collaborations with private insurers for additional funding.
The financial community views these reforms positively, with the U.S. Treasury Secretary supporting the IDB’s strategy. Multilateral development banks, like the IDB, are crucial in providing credit and aid to countries, as they typically have higher repayment rates compared to private bondholders. Other banks, such as the Asian Development Bank and the World Bank, are also looking to increase lending through stretching approaches endorsed by the G-20. The upcoming G-20 presidencies of Indonesia, India, and Brazil will likely continue to prioritize development bank reform efforts.
Additionally, in Latin America, former Panamanian President Ricardo Martinelli was disqualified from running for office due to a corruption conviction, while former Honduran President Juan Orlando Hernández was convicted of drug trafficking in a U.S. federal court. In Argentina, President Javier Milei’s austerity measures have contributed to a rise in child poverty rates. Despite some positive macroeconomic outcomes, such as a budget surplus, these reforms have been challenging for households.
Finally, the International Booker Prize longlist this year reflects a resurgence in Latin American fiction, with works covering themes such as slavery in Brazil and life under Nicolás Maduro’s regime in Venezuela. The first Latin American literary boom saw iconic authors like Gabriel García Márquez and Mario Vargas Llosa. Vargas Llosa, who ran for president of Peru in 1990, remains active in politics and endorsed Milei’s candidacy in Argentina.