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Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report 2011-2013

IDB SECTOR STRATEGY TO SUPPORT COMPETITIVE GLOBAL AND REGIONAL INTEGRATION

2010 INTEGRATION STRATEGY IDB integration strategy proposes a “smart-mix” of existing instruments (financial and non-financial)

2009

2011 2010

CGI-9 GCI-9 ambitious mandate: visibility and risks of reputational effects

2011 IMPLEMENTATI PLAN APPROVE

[ 2 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

OVE EVALUATION 2013

TARGETS 2015 Not business-as-usual: quantitative target (15%) + qualitative development goals

Recommendation by Management, OVE and Board of Directors to explore options on how to step-up lending for integration

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2014 2013

2015

SECTOR FRAMEWORK 2014

The IDB promotes high-level strategic dialogue between public and private stakeholders, and provides institutional support to the main integration initiatives among its member countries.

[ 4 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

AN ENHANCED STRATEGIC

FINANCIAL PRO NONDUC MON TS Policy ialogu C

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STRATEGIC INITIATIVES: INTEGRATION INITIATIVES

ALIANZA DEL PACÍFICO Technical support

(4 countries)

CARICOM Institutional support

(15 countries)

PATHWAYS Institutional support

(16 countries)

PROYECTO MESOAMÉRICA Strategic partnership

IIRSA-UNASUR Institutional support (12 countries)

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FINANCIAL PRO NONDUC MON TS l i c o y P ialogu C

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STRATEGICAL INITIATIVES STRATEGIC INITIATIVES: PARTNERSHIPS PARTNERSHIPS Aid for Trade IDB World Trade Organization

South-South Cooperation IDB- Asian Development Bank

Trade Facilitation IDB-World Customs Organization

Trade and Investment IDB-OECD

E15 Initiative IDB-ICTSD

AP Study IDB-World Economic Forum

AMONG MANY OTHERS…

Special Strategic Integration Initiative

www.connectamericas.com

[ 8 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

Collaborative Effort Intra-institutional coordination with VPP and VPS. Platform’s architecture in consultation with SMEs, TPOs, Chambers, and Trade Associations.

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3 Main Modules * Learn * Connect * Finance

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Key Partnerships 3 anchor partners: Google, DHL, VISA (Alibaba currently being negotiated).

Local partners: TPOs, Chambers, Trade Associations, in the region and beyond.

Launch Date: March 28th at IDB Annual Meeting.

Applied Research: INT Flagships Understanding and Measuring Trade Costs

<< Unclogging the Arteries: The Impact of Transport Costs on Latin America and Caribbean Trade

The book explores the impact of high transport cost in Latin America, and argues that tranport costs have assumed an unprecedented strategic importance to the region. It concludes that a broader and more balanced trade agenda would bring the long neglected issue of transport costs to the center of the policy debate.

>> Bridging Regional Trade Agreements in the Americas

This book assesses the impact and design of optimal strategies to implement existing agreements. It deals with issues such as removing the remaining barriers to trade, improving the institutional, regional, and global trade architecture, and promoting convergence and accumulation among the existing agreements.

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FINANCIAL PRO NONDUC MON TS l i c o y P ialogu C

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>> Too Far to Export

Driven by declining import tariffs, poor infrastructure and increasing specialization in transport-intensive goods, transport costs are arguably todayâ&#x20AC;&#x2122;s most formidable obstacles to trade in Latin America and the Caribbean (LAC). This study assesses the role of domestic transport costs in shaping the level and diversification of countriesâ&#x20AC;&#x2122; overall and subnational exports.

<< Odyssey in International Markets

This study makes a comprehensive analysis of export promotion organizations in some three dozens of countries and regions, and it provides robust evaluations, using state-of-the-art econometrics and original datasets purposely compiled, of the impacts that policies have had on export outcomes of countries and firms.

Applied Research: Other Reports Special Reports on LAC-Asia

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Applied Research: Other Reports Working Papers, Policy Briefs, Technical Notes

Applied Research: Research Policy Networks Research Policy Networks

REDINT

ELSNIT

* Forum on Regional Integration and Trade * Through the Integration Networks, the IDB/ INTAL has the objective of support the strengthe- * Centre d’Etudes Prospectives et d’Informations Internationales (CEPII) ning of research capacity referred to integration * Kiel Institute for the World Economy (IfW) in Latin America and the Caribbean. * European University Institute (EUI) * Institut Barcelona d’Estudis Internacionals (IBEI) LAEBA * University of St. Gallen * Inter-Regional Mechanism ALC-Asia and the * Center for Economic Performance (CEP - LSE) Pacific * Centre for Economic Policy Research (CEPR) * Asian Development Bank Institute (ADBI)

LACEA-TIGN * Network on Trade, Integration and Growth * Latin-American and the Caribbean Economic Association * Andean Development Corporation (CAF) [ 14 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

FINANCIAL PRO NONDUC MON TS l i c o y P ialogu C

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Applied Research: Databases & Modeling Services INT Flagship Database and Trade Monitor

http://www.iadb.org/int/intradebid/Home.aspx

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POLICY DI

PUBLIC &

Engagement of k with innovati

PUBLIC POLICY DIALOGUES Annual Regional Policy Dialogue on Trade and Integration Annual Regional Finance Ministers (IDB/INT Secretariat) Mexico 2008 / Chile 2009 / Peru 2010 / Canada 2011/ Colombia 2013 / TBD, 2014

PRIVATE SECTOR FORUM HEMISPHERIC: CEO Summit of the Americas Cartagena, Colombia - April, 2012 / Panama 2015 INTER-REGIONAL: LAC-Asia Business Forum Korea 2011 / China 2012 / Japan 2013 / China 2014 REGIONAL: LAC Business Forum Ciudad de Panama, Panama March, 2013 / Sao Paulo, Brazil - June 2014

BILATERAL: Colombia-Brazil Investment Forum Cartagena, Colombia August 2011 SECTOR-SPECIFIC Business Forum on Trade and Investment Outsource2 LAC: Montevideo, Uruguay 2011 / Medellin, Colombia 2012 / Buenos Aires, Argentina 2013 / Guatemala 2014 LAC Flavors:

Santo Domingo, DR 2011 / [ 16 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013) Antigua, Guatemala 2012 / Granada, Nicaragua 2013 / Veracruz, Mexico 2014

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IALOGUES:

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Capacity-building on Integration Keeping the Bank at the cutting-edge of the knowledge frontier

KEY FACTS AND NUMBERS

30+ annual courses on trade / infrastructure /

financial integration

1,200 TRAINED PUBLIC SECTOR PROFESSIONAL IN 2013

National courses create “integration KEY to FACTS AND NUMBERScritical mass”

26COUNTRIES

BENEFICIARY

99% PARTICIPANTS

SATISFACTION

88% PARTICIPANTS CERTIFIED

Enables integration projects by addressing

countries execution capacity

[ 18 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

Developed in partnership with other institutions

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IDB Lending to Support Integration Operational value added through the blending of hardware and software interventions

Focus on operational innovation: *Integration PBL (Uruguay) *Outsourcing (Uruguay & Colombia) * Single window (Chile & Perú)

Joint INT-INE projects: Panama - Costa Rica Colombia - Ecuador Peru - Brasil

Broadband Integration (IFD)

Examples of innovative national and regional IDB integration projects

Transport Corridors (INE/SCF)

Border Crossings (INT-INE)

Trade Facilitation (INT)

Planning, construction & maintenanc IIRSA integration & development hubs (US$ 4.4 leveraged US$ 11.4 bn) TC for PM and IIRSA proje preparation (US$ 35 m) Support to PM regional planning of Pacific Corridor

12 South American countries TC for feasibility studies

Financial Integration (IFD/SCF)

TFFP US$ 1.7 bn leve US$ 2.8 bn

TCs for regulato harmonization, M

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Energy Integration (INE/SCF)

* SIEPAC: focus on regional generation and energy trade. 51% of the investment provided (US$ 254 m) * SINEA: TC for feasibility studies and institutional support

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Regional Programming The Bank has started regional dialogues to identify regional priorities to be included in country programming * CSC Regional Meetings * CAN Regional Meetings * CCB Workshops and Meetings * CID Governors Meetings Objectives and Results * Engage Finance and line Ministries on integration programming * Coordinate with other operational partners (eg. BNDES, CDB, BCIE. Etc.) * Mobilize stakeholders

>BH-L1016 ($16.5M)

>GU-L1037 ($20M) >HO-L1055 ($10M) >HA-L1078 ($17.5M) >NI-L1016 ($10M) ES-L1057 ($30M) >

>BA-LXXXX ($20M) >TT-L1038 ($18M)

PN-L1090 ($20M) > CO-L1094 ($12M) > CO-L1138 ($12M) > CO-L1130 ($30M) > CO-L1145 ($25M) > EC-L1116 ($15M) >

PE -LXXXX ($30M) >

INT Lending to Support Integration CH-L1061 ($7.5M) > CH-L1074 ($8M) >

PORTFOLIO PIPELINE

>PR-L1018 ($10M) >PR-L1069 ($10M)

>UR-L1015 ($5.4M) >UR-L1060 ($10M) >UR-L1037 ($11.6M) >UR-L1076 ($550M) >AR-L1092 ($6M) >AR-L1078 ($3M)

17 LOANs Portfolio = $747.5 M 7 LOANs Pipeline = $152.0 M [ 22 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

INT Lending (collaboration DB) to Support Integration >NI-L1083 (TSP $31.5M) >CR-L1066 (TSP $100M)

CO-L1138 ($12M w/FMM) > CO-L1130 ($30M w/TSP) >

EC-L1116 ($15M w/TSP) >

PE-L1130 (FMM $45M) > PE-L1134 (TSP $25M) >

>RG-L1067 (CMF $350M) DOUBLE BOOK RECEIVE DOUBLE BOOK PROVIDE

3 LOANs Pipeline D-B (received) = $57.0 M 5 LOANs Pipeline D-B (provide) = $551.5 M

>CID (9) = $5.25M >CID (1) = $500K >HO (1) = $375K >HA (3) = $1.8M

NI (1) = $750K >

>CCB (3) = $1.4M >CCB (1) = $900K >TT (1) = $650K

CO (3) = $1.5M >

CCB (3) = $1.4M >

PE (3) = $1.2M > BO (1) = $45K >

INT Technical Cooperation to Support Integration CH (1) = $250K >

PIPELINE

>BR (1) = $700K

>UR (2) = $890K >CCB (3) = $1.4M CSC (1) = $550K REG (40) = $61.28M REG (7) = $7.26M

> AR (2) = $550K

PORTFOLIO

13 TCs Pipeline = $10.5 M 73 TCs Portfolio = $78.0 M [ 24 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

INT Operational-Clients Networks Support Public â&#x20AC;&#x201C; Private Operational-Clients Networks

Trade Promotion Agencies REDIBERO Regional Customs Meeting

Single Window Regional Network

AEO Network

Americas Business Dialogue (in preparation)

Integration Instruments Scaling-up the availability of specific instruments for integration projects

FIRII

RIIF

* Funded with Ordinary Capital, since 2005 * Pre-investment fund for the preparation of regional infrastructure integration projects * US$ 34 million approved to finance 35 TCs * Leverages US$ 1.3 billion in loans.

* Multi-donor fund (Canada, Colombia, Mexico, Spain & USA) since 2012 * Pre-investment fund for the preparation of regional infrastructure integration projects (focus on integration “software”) * Endowed with US$ 22 millions * US$ 13 million in approved projects

Integration Instruments Upgrade

Regional Public Goods Program

* Technical support to integration working group led by EVP * Proposal for ring-fencing national envelopes for integration projects * Consideration of additional instruments to support integration * Preparation in 2014 for full execution in 2015

* Funded with Ordinary Capital since 2004 to facilitates the development of collective action among LAC countries * OVE evaluation (2012) led to program revision: Alignment with Bank’s operational program to increase effectiveness * 2014 BPR: Approval 13 projects / 10 mill US$

[ 26 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

Institutional Coordination Incentives, Monitoring, Communication and Evaluation Strengthening accountability and development effectiveness

Incentives

Communication

* INT/ TIU (2011) --- INT/INTAL (2013) --INE/ IIRSA-INT/INTAL * VPC - VPS Region-specific support to integration initiatives * INT - INE Formal coordination mechanism (including strategic eligibility committees AFT - FIRII – RIIF) * INT-INTAL-KNL-INDES Integration Capacity building program

* TCDI * Integration & Trade Journal * Dissemination Brochures * Website * Social Media

Monitoring

Evaluation

* Guidelines for the classification of integration operations * VPS technical support to SPD for the validation of the integration lending target

* OVE mid-term evaluation of the integration strategy * OVE evaluation of RPG Program and regional instruments

[ 28 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

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Communication and Dissemination Dissemination Reports and Brochures

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The Support of the IDB to the Integration in Latin America and The Caribbean The Inter-American Development Bank (IDB) has promoted integration in Latin America and the Caribbean since its establishment. The Ninth General Capital Increase of 2010 reaffirmed the institutionâ&#x20AC;&#x2122;s commitment to support integration. The IDB is a strategic partner in the integration process, providing institutional neutrality, financial capacity, and technical knowledge.

Communication and Dissemination Newsletter, Web Pages, Social Networks

Sector de Integración y Comercio - BID

@BIDComercio

[ 32 ] INT’s - Contribution to Implementing IDB’s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

[ 34 ] INTâ&#x20AC;&#x2122;s - Contribution to Implementing IDBâ&#x20AC;&#x2122;s Sector Strategy to Support Competitive Global and Regional Integration Progress Report (2011-2013)

Opportunities and Challenges to continue the Implementation of the IDB Integration Strategy…

Dissemination Reports and Brochures

* GCI-9 ambitious mandate: visibility and risks of reputational effects * Not business-as-usual: quantitative target (15%) + qualitative development goals * IDB integration strategy proposes a “smart- mix” of existing instruments (financial and non-financial) * Recommendation by Management, OVE and Board of Directors to explore options on how to step-up lending for integration

Country Demand

Client priorities leading to adverse selection and lowquality proposals

Instrument Supply

Insufficient innovative instruments to support integration programs

Execution Capacity

Corporate Incentives

Limited country capacity to execute integration projects

Limited resources to implement the integration strategy within the Bank

www.iadb.org/trade 2014