Development Bank Does Not Address Problems of Racism in Latin America

(Washington, D.C.) – A new report prepared by the Government Accountability Project (GAP) shows that the Inter-American Development Bank (IDB), the most important multilateral lender to Latin America, fails to promote racial equality adequately. The issue affects the identification, preparation, and implementation of IDB programs and projects in the region, as well as the Bank’s hiring, retention, and promotion practices.

Development organizations and multilateral aid agencies agree that Latin America as a region exhibits the highest levels of income and wealth inequality in the world, and conservative estimates show that poverty now affects over 180 million people there. Earlier this summer, Afro-Latinos and Indigenous members of IDB watchdog groups approached GAP about the lack of IDB projects and loans designed to address the needs of their communities, as well as the under-representation of these populations on the Bank’s staff.

The series of disclosures prompted GAP to prepare a new report on this issue, which can be found here: (Full Report) (Executive Summary) (Resumen Ejecutivo en español) (El Informe en Español)

“Afro-Latinos and Indigenous peoples together make up more than 40 percent of the population of Latin America and a majority of the region’s poor,” said GAP International Program Director Bea Edwards. “But according to our study, they are significantly underrepresented in IDB operations and projects designed to address poverty.”

Problems with IDB Lending

Substantial resources of the IDB come through periodic capital replenishments: the contributions of donor governments. The most recent of these increases was the Eighth Replenishment, approved in 1994, which made the US contribution contingent on the Bank’s commitment to lending for poverty alleviation, especially the poverty that affects Afro-Latinos and Indigenous populations as a result of racial and ethnic discrimination. Information provided by sources both inside and outside the IDB strongly suggest that the Bank has failed to comply with this contingency.

Data released by the IDB show that the institution allocated only 0.13 percent ($58.3 million) of its total lending and grants (approximately $45 billion) between 2001 and 2005 to projects that incorporated components benefiting Afro-Latino and Indigenous communities directly. The Bank’s most visible effort to address the needs of these two populations was the Social Inclusion Trust Fund, operated between 2003 and 2006. Resources from the Fund financed grants to support small pilot projects (maximum amount US $80,000). However, IDB staff members familiar with the lending negotiations reported that various governments expressed unwillingness to scale up these projects using loan funds – if the project objectives explicitly identified Afro-Latino and Indigenous communities as beneficiaries.

The Underrepresentation of Afro-Latinos and Indigenous peoples at the IDB

The IDB has also failed to practice racial and ethnic diversity in its own workplace. The Bank, with a staff of 1,745 in 2007, claims to employ about 50 Afro-Descendant staff members. However, anecdotal evidence gathered by GAP (from numerous independent sources), indicates that fewer than 10 Afro-Latinos are employed at IDB headquarters, most in administrative/support positions. These same sources reported that only two self-identified Indigenous people work at the Bank’s headquarters. There are reportedly no Afro-Descendant Caribbean nationals or Afro-Latinos in supervisory positions or in senior advisory positions at headquarters.

The IDB created programs in 2004 and 2005 to address this problem and promote inclusion and diversity among Bank staff. However, during the process of collecting information and conducting interviews for this report, GAP did not find references to any Afro-Latino or/and Indigenous staff member who was appointed to a permanent staff position at the IDB between 2004 and 2009 through any of these programs. In fact, the Young Professional Diversity Program, which launched in 2005 and expanded the existing Program with the mission of incorporating new positions for Afro-Descendants and Indigenous candidates, failed when the first two candidates, one Afro-Latino and one Indigenous person, were not appointed to permanent positions at the Bank. They were the only ‘graduates’ of the program during the past twelve years who did not receive such appointments.

In the last year, activity on this issue has increased at the IDB, but results are difficult to assess so early on. In May 2009, the Bank retained a Diversity Advisor to the Director of the Department of Human Resources, and a two-day diversity conference is planned for November.

Report Recommendations

The IDB is currently in negotiations for a ninth “Capital Replenishment.” Before this occurs, GAP is urging donor countries to insist that IDB management take the steps necessary to address the needs of those who suffer the impact of racial and ethnic discrimination. Certain actions must be undertaken according to set timetables with binding targets, including:

  • A larger percentage of the IDB’s ordinary capital resources must be made available to the victims of ongoing racial and ethnic discrimination.
  • The IDB must compile and analyze socioeconomic data on race, ethnicity and poverty in Latin America.
  • The Bank must collect and publish data on its permanent staff by race, ethnicity, grade level and department.
  • The IDB must incorporate representatives of Afro-Descendant and Indigenous civil society organizations in its consultative mechanisms at the regional, sub-regional and national levels, especially in consultations associated with the formulation of country strategies.
  • The IDB must implement diversity recruitment and retention goals in order to incorporate a range of perspectives on socioeconomic development and to promote trust between the Bank and historically marginalized populations.
  • The Bank must gather, analyze and publish information about the impact and effectiveness of its operations and procurement activities on Afro-Latino and Indigenous populations.
  • The Bank should establish a capacity-building initiative through internships for Afro-Descendents and Indigenous professionals at its country offices to enhance the potential for hiring members from these communities in permanent staff positions.

Government Accountability Project

The Government Accountability Project is the nation’s leading whistleblower protection organization. Through litigating whistleblower cases, publicizing concerns and developing legal reforms, GAP’s mission is to protect the public interest by promoting government and corporate accountability. Founded in 1977, GAP is a non-profit, non-partisan advocacy organization based in Washington, D.C.

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