The IDB warns of a “domino effect” of the war in Ukraine in Latin America

The president of Inter-American Development Bank (IDB) warned this Monday about the “domino effect” of the war in ukrainiana in the economies of Latin America and the Caribbean, but assured that the region can play a role in offsetting the impacts on basic products for the entire world.

Mauricio Claver Carone He said at the opening of the IDB annual meeting that Russia’s invasion of Ukraine, which began in late February, “is a global tragedy and a shock to the world order” with “profound ramifications” for the future.

“Some domino effects have already begun to reach our member countries and have impacts in financial markets on inflation and changes in the flows of raw materials such as gas, wheat and metals,” he said.

“These dynamics are compounded in the context of an incomplete recovery from an ongoing pandemic,” he added.

Claver-Carone recalled that the war in Eastern Europe, like the Covid-19 emergency since 2020, it once again highlights the “deep global interdependence”, with altered supply chains, in particular with China. And he called the regional unit to cushion the blow.

“Not only should we work together to mitigate the economic effects in the region, but I believe that Latin America and the Caribbean can and will play an important role in offsetting the impacts of commodities for the entire world,” he said.

The IDB president, however, highlighted the regional growth forecast of less than 3% for 2022, which he attributed to “the threat of rising inflation”, “questions about the sustainability of public finances”, “the persistent structural problems and the uncertainty about the future of the pandemic”, as well as “the tremors in the global markets”.

He also warned about the “acute challenges” in the region that, he said, must be addressed quickly “in the context of growing geoeconomic and geopolitical complexities.” He mentioned the ongoing instability, violence and humanitarian crises, especially in Haiti and Venezuela.

Haiti and Venezuela remain a priority focus for the IDB and they should be for all of us,” he said.

The annual meeting of the Boards of Governors of the IDB and the Inter-American Investment Corporation (IDB Invest), the highest-level policymaking bodies of both institutions, will take place this week in virtual format from Washington.

Most of the participating governors are finance ministers or presidents of the central banks of their countries.

Leave a Comment