There are at least three countries interested in joining the
IDB, and they would make great additions, IDB president Alberto
Moreno said yesterday but only a miniscule number of
shares are available for new members.
Russia has made overtures to join the bank, sending a
high-level delegation to the 2008 annual governors
meeting in Miami. India and Singapore have expressed interest
Moreno told Emerging Markets that India and Singapore are
very attractive possibilities and we would love to have them in
the IDB family.
Moreno and others in the bank, however, acknowledge that having
new countries join China which formally took a seat on
the bank in January with $350 million capital contribution
is going to be very tough. The bank has less than
one-half a share available from Bosnia Herzegovina.
To increase shares, you need shares. And we dont
have shares, Moreno said.
Latin American countries hold slightly more than 50% of the
IDBs shares. The rest are divided between the US, with
30%, several European nations, Israel, China, Japan and South
Shares could be redistributed during the recapitalization
process that has been proposed. That happened during the last
recapitalization in 1995, when the US ceded some shares
but it is unlikely to do so this time, as it would lose its
veto power if its share dropped below 30%. Latin American
countries are also unlikely to give up shares, as the region
would lose its majority.
Moreno said shareholders not only have the capacity to move the
bank toward a capital increase, but could also look for
new ways to for us to find more resources.
Venezuelan finance minister Ali Rodriguez said the bank should
look for ways to enable other would-be members follow
Chinas example. It would be extraordinary to have a
nation like India in the IDB. We should look for ways to make
That opinion is shared by Enrique Iglesias, who headed the bank
for 17 years before stepping down in 2005. He said the bank
should take seriously every request for admittance.
Personally, I think we need to review case by case
countries that want to enter, like Russia. Countries with such
important capacities that want to work with Latin America
should be admitted, he told Emerging Markets.
Russia, India and Singapore are relatively small trading
partners with Latin America, particularly when compared to
Chinas $140 billion trade flows with the region in 2008.
By contrast, Indias were slightly more than $16 billion,
Russias were $15 billion and Singapores $12
Sources at the IDB meeting in Medellin reported that, while
countries outside the region seek membership, Brazil is in
discussions to join the Asia Development Bank, which has 17
non-regional members that hold 36.6% of its shares. The last
country to join was Ireland, which holds 0.34% of the shares.
Brazil would not confirm the report.