I met President Moreno of the Inter-American Development Bank (IADB) twice in the last year, in April 2006 at the IADB annual meetings held in Belo Horizonte, Brazil, and in June 2006 in London. We discussed a range of issues including the use of the fund for special operations (FSO), debt relief for the regional heavily indebted poorer countries (HIPC), the President's “Building Opportunities for the Majority” initiative, and proposed work on climate change. On each occasion I confirmed our support for the President's reorganisation of the Bank, which DFID has been supporting, his work to help borrowing member countries in the Latin American and Caribbean region tackle poverty, inequality and respond to climate change, and work to improve the Bank's performance in making lending available to small enterprises. To date, DFID has approved £18.3 million to support the IADB's work in these areas.
I have also expressed to the President my concern over the details of the current IADB’s debt relief initiative to cancel all the outstanding loans of the five HIPC countries in the region. We are concerned that it will constrain the Bank's ability to provide substantial and concessional financing to the poorer HIPC countries to finance the millennium development goals (MDGs). The UK has strongly supported the IADB providing additional debt relief to these HIPCs, but we are concerned about the way the deal is structured and the lack of additional financing for MDGs.