CONTENTS

          Preface

1. Introduction
2. Education
3. Democracy and Human Rights
4. Education for Democracy
5. Civil Society
6. Building Confidence and Security Among the States
7. Strengthening Municipal and Regional Administrations
8. Corruption
9. Prevention and Control of Illicit Consumption of and Traffic in Drugs and Psychotropics and other Related Crimes
10. Strengthening Justice Systems
11. Modernization of Labor Ministries
12. Free Trade Area of the Americas
13. Financial Markets
14. Infrastructure
15. Science and Technology
16. Regional Energy Cooperation
17. Microenterprise
18. Property Registration
19. Health Technology
20. Women and the Family
21. Sustainable Development

The areas of priority expressed by the leaders of the region at the conclusion of the second Summit of the Americas, held in Santiago, Chile, provide guidance for governments and international institutions engaged in the development of Latin America and the Caribbean. Since the creation of the Summit Process in Miami in 1994, the Bank has viewed the priorities set forth by the leaders of the region as an important renewal of the region's developmental priorities. The Bank, through its activities, is fully committed to this process, since its consensual nature brings a sense of continuity and stability of action, which is a key component of sustainability.

The purpose of this document is to provide an update on the activities that the Bank has carried out since Santiago, as well as to report on activities under way in support of the Summit process.

Particular attention is paid to three different types of support that the Bank can provide to governments in the region: loans, technical assistance and coordination of development efforts with other public and private institutions. It should be noted that, in pursuing its efforts, the Bank is coordinating closely with other agencies involved in the countries of the region.

In the discussion that follows, the areas of the Summit's emphasis are examined within the scope of current Bank efforts and in the understanding that their ultimate accomplishment depends on the sharing of actions by all those involved. A brief history of the Bank's track record, of its current thinking, and of the programmatic priorities being proposed for each category is also given.

1)Introduction

2)Education

Currently, the IDB has over US$2.5 billion in education-sector loans under execution. As IDB President Enrique Iglesias stated in Santiago, the Bank continues to provide loans and technical cooperation in support of modernization and reform of the education sector in the region. Since Santiago, the Bank has approved five loans for the sector amounting to US$264 million. In addition, the Bank's technical-assistance window processed and approved for the sector 38 operations amounting to US$18.3 million. The Bank is presently working with several countries to prepare projects or programs with an expected lending value of US$1 billion. In addition, nearly US$150 million in technical-cooperation programs are under consideration.

One of the major challenges in the sector is to improve the allocation and management of resources in order to overcome distortions. Among these challenges are the existence of cash-strapped basic education systems alongside well-financed public higher education institutions. The Bank is already supporting programs that grant school systems greater autonomy and choice, so that principals, teachers, and parent associations have more say in the way schools are run and supervised. This is contrary to highly centralized systems that are often detached from the needs of the communities where the services are delivered.

In addition to the activities described above, the Bank continues to work actively in the following initiatives:

• International Virtual School Network (IVEN). Pilot phase under preparation in Venezuela, Brazil, and Colombia; initial discussions under way in Chile and Peru. This international network of virtual schools seeks to improve mathematics and science teaching. The initiative pen-nits countries to link schools with new electronic media for the joint teaching of mathematics and science. The program involves distance education through television, and information-age technologies such as communication networks, computers, and the Internet.

• Internships project: internships for instructors and education administrators. The final details for implementation of this project are underway. A program to fund secondments of teachers seeking to visit and gain hands-on experience in school districts involved in innovative programs.

• Collaboration with the UNESCO Regional Education Office for Latin America and the Caribbean (OREALC): Presentation and dissemination of laboratory results; cofinancing of activities. A program to collect, standardize, and publish - through both printed and electronic media - the outcomes of experiments and laboratory work by students.

• Preparation of the proceedings of the Regional Conference on Teacher Performance and Development held in June 1999. This conference, which was cosponsored by the IDB, allowed researchers to share results on recent work regarding the relationship between teachers and educational quality, a topic that is consistent with the goals of the Second Summit of the Americas.

• On-going research on the role of the private sector in education. This is a topic of increased relevance that is coming to the forefront in public decision-making, in view of the results and efficiency of public-sector educators.

• Preparation of the proceedings of the Regional Conference on Educational Reform in Central America, which was held in January 1999 in San Salvador, El Salvador. This conference was cosponsored by the IDB.

3)Democracy and Human Rights

Although this is not a direct area of Bank action, interest and requests for support have materialized recently. Recognizing at the same time the need to support the Summit priority, the Bank has carried out the following activities:

• Published a guide for the application of international standards for human rights. The International Dimension of Human Rights (1999) offers a comprehensive view of the subject from a global perspective and aims to strengthen the administration of justice in the region.

• Approved a technical-cooperation project to support the strengthening of democratic institutions in Paraguay. The project is strengthening the country's legislative process as a requisite for fostering legal security and predictability and thereby promoting economic growth and consolidating the rule of law.

• Approved a regional technical-assistance program to fund a training program for social leaders in a democracy (with the Organization of American States). The program seeks to share information and knowledge about democratic development in the region. Training offered to leaders will provide them with the technical tools to strengthen democratic processes and institutions.

• Sponsored a series of seminars that promote democratic values: Latin America and the Caribbean in the New Millennium: A Vision-of the New Generation, Spain and lbero-America in the New Millennium, and Legislative Modernization. Regional leaders from a wide variety of sectors provided each forum with valuable insights into the challenges and role of democratic institutions in the year 2000 and beyond.

• Funded loans in three countries aimed at strengthening democratic institutions: legislative modernization in El Salvador, Guatemala, and Honduras. The projects will provide technical assistance to legislators, information technology support to the Congresses, and programs of public outreach and democratic education for civil society.

4)Education for Democracy

Although all Bank programs strengthen educational values in a democratic framework, the Bank approved a technical-cooperation grant to fund a specific workshop that promoted education and citizen participation. Building Democratic Societies: Citizen Participation in Latin America (May 1999) examined case studies of civil society participation in democratic development with the aim of adapting successful models to other countries.

5)Civil Society

The Bank's support for civil society organizations is now entering its seventh year. Since the Summit, the Bank has sponsored two workshops in this area. Practical Experiences in Building Partnerships (October 1998) and Enabling Citizen Participation (January 1999) at the Global Forum on Reinventing Government focused on improving the capacity of civil society to collaborate with other partners in support of shared development objectives. Two additional technical-cooperation projects provided resources to sponsor the Fourth lbero-American Meeting of the Third Sector (September 1998) and a program to strengthen civil society organizations in the Dominican Republic. Finally, a loan was approved in Bolivia for a civil society and access to justice program.

6)Building Confidence and Security Among States

Since the Santiago Summit, the Bank has approved four technical cooperations in support. of this area. One for coexistence and citizen security in El Salvador and three for supporting the peace process in Colombia. The interventions are specifically designed to prevent and reduce violence and increase governability in these countries. In addition to these interventions, the Bank provided assistance resources for two programs in Costa Rica for the Justice Center and citizen security and for violence and crime prevention. Similar resources were allocated to support a seminar for the Central American Conference on Coexistence and Citizen Security (July 1998). Experts from throughout the region gathered together to find ways to strengthen the capacity of key crime-prevention agencies, enlist the help of civil society and community organizations in prevention efforts, provide training to police to enhance the protection of human rights, and develop a culture of prevention by emphasizing the role of youth.

7)Strengthening Municipal and Regional Administrations

Historically, the Bank has been one of the major providers of financial assistance to states and municipalities throughout the Hemisphere. In recent years, assistance has shifted from infrastructure expansion to areas such as modernization and strengthening of local governments. The Bank is confident that this trend will continue, eventually becoming an important future destination for the Bank's strategic direction. Since Santiago, the Bank has approved ten loans for investments and strengthening of urban centers which include components to modernize municipal and regional administrations. These loans amount to US$750 million. In addition, 20 technical-cooperation operations for a total of US$4 million were approved.

It is appropriate to note that since 1994 the Bank, through its Private Sector Department, has provided support for eight private sector sub-national infrastructure projects including state and municipal Concessions for private highway systems, as well as private municipal water supply projects

8)Corruption

The Inter-American Development Bank is acutely aware of the effects of corruption on economic and social development, and has addressed the issue in various ways through its lending program over the last six years. Its lending activities reflect the clear consensus that has formed among all of its shareholders on the need for modernization and reform of the public sector and national economies, and on the role of a smaller, efficient government that operates with accountability and transparency. The activities funded by the Bank to implement this consensus are intended to reform those regulatory or institutional frameworks and governmental structures or mechanisms that most easily provide opportunities for public corruption and fraud.

The Bank has actively financed programs, provided technical assistance and sponsored, other activities that have assisted its borrowers in, inter alia, (a) reforming tax and budgetary systems, (b) modernizing the public sector, (c) redefining the State's role and involvement in the various sectors of the economy, (d) strengthening the institutions of the executive, judicial and legislative branches, and (e) establishing appropriate regulatory and governmental supervisory functions. As a result of this focus on programs linked to governance, state reform and capacity-building issues, the Bank has long been active in eliminating the opportunities for corruption to flourish.

Over the last two years, the effort to combat corruption has been discussed more explicitly in the context of governance and state reform. The Bank has been focusing on the issue of corruption itself more explicitly at three different levels: (a) supporting activities in specific member countries or in specific sub-regions on a case by case basis; (b) ensuring that Bank funded projects and programs and Bank staff maintain the highest standards; and (c) participating in the international dialogue on corruption, to ensure that the issue is highlighted and addressed internationally.

In addition to the activities described above that deal with governance and greater efficiency, transparency and accountability in the public sector, the Bank is funding specific anti-corruption activities on a case by case basis, as requested by borrowing member countries. In Colombia, the Bank is actively involved in supporting the newly-installed government's efforts to develop a national anti-corruption strategy. In other countries, such as Argentina and the Dominican Republic, recently approved projects or upcoming projects that deal with public sector reform contain components explicitly addressing anti-corruption activities.

In Central America, the Bank is supporting efforts to maximize the integrity and transparency of the reconstruction efforts underway in the wake of Hurricane Mitch. On a regional basis, the Bank has approved a regional technical cooperation with the Organization of American States (OAS) to ensure ratification and full implementation of the first convention of its kind, the Inter-American Convention Against Corruption. Also on a regional basis, the Bank is proceeding with a program to support national general controllers' offices in detecting fraud and corruption. Another regional technical cooperation will support the use of information technology and communications for greater transparency in public procurement.

Special mention should be made of the Bank's efforts to deal with the serious problem of asset laundering in the region. During the Bank's 1998 Annual Meeting, the Bank hosted a seminar on international money laundering, inviting representatives from various international entities (including the OECD's Financial Action Task Force (FATF)) and academicians to speak on the issue.

The Bank is funding a training program for banking regulators and bank officials in the region, whose executing agency is the OAS's International Commission for the Control of Drug Abuse (CICAD). The Bank is also funding a study with CICAD for judges and prosecutors in the region that will support training activities in prosecuting asset-laundering cases. There are ongoing discussions with various national governments regarding anti-asset laundering programs to be executed on a national or subregional basis. Lastly, the Bank has just signed a letter-agreement with the Vienna-based United Nations Office for Drug Control for increased cooperation in various areas, including asset laundering.

9)Prevention and Control of Drugs

The Bank approved a US$20 million loan for Argentina to fund a program that targets vulnerable youth. This operation is an innovative program that seeks to reduce the factors that lead children into crime and drug abuse.

10)Strengthening Justice Systems and Judiciaries

In crafting its support to the countries of the region in the area of judicial modernization, the IDB is seeking a broad political and social consensus in order to strengthen the sustainability of reforms. The Bank supports the requirement of a high degree of independence for the judiciary, and considers it essential to ensure transparency and public participation in the formulation of projects. The Bank also attaches high priority to the different national realities in terms of cultural traits, endowment in natural and human resources, and degree of institutional development.

This is an area in which the IDB is experiencing a robust demand for its funding. Since the Summit, two loans - totaling US$27 million - have been approved: judicial system reform in Guatemala, and a program to strengthen justice and the judiciary in Bolivia. In addition, four technical-assistance operations for an aggregate amount of US$500,000 have been approved: administration of justice for youth in the Dominican Republic; prevention, administration, and resolution of social conflict in the Dominican Republic; training for judges in the Andean countries; and strengthening access to justice in Latin America.

With these two loans, the total support lent to this critical area since 1994 comes to 26 operations valued at US$138 million. In response to the continuing demand for resources in this area, the Bank is currently working on five operations representing a cumulative total of US$217 million. These include loans for Costa Rica, Panama, and Nicaragua.

11)Modernization of Labor Ministries

The IDB has been asked to play a supporting role in this area of priority, mainly by providing technical-cooperation resources. Recently the Bank granted technical assistance to support the organization of the Eleventh Inter-American Conference of Labor Ministers, held in Santiago, Chile, in October 1998. At the conference, the Bank pledged to support the different working groups set up by the meeting.

12)Free Trade Area of the Americas (FTAA)

The core of Bank support in this area has been in framing the request by the ministers of the Hemisphere for the OAS/IDB/ECLAC Tripartite Committee to support the FTAA process. The main activities supported recently are:

• Logistic and technical support for working groups on government procurement, market access, agriculture, and investment, as well as the consultative group on smaller economies.

• In collaboration with the Organization of American States (OAS) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), preparation of the second feasibility study for the establishment of an FTAA administrative secretariat and technical support for the FTAA presidency y.

• Preparation and publication of working group studies on investment and government procurement.

• In conjunction with the University of Costa Rica, the IDB's Institute for Latin American Integration (INTAL) organized the first academic colloquiurn on the FTAA.

• INTAL also provided interim financing for the logistic support of the FTAA negotiating groups in their first round of meetings held in Miami during September and October 1998. IDB headquarters, in collaboration with the OAS and ECLAC, organized and supplied all the logistic support for these meetings.

In terms of funding, the Bank has approved - since the Summit - five technical-cooperation projects for a total of US$4 million in support of activities in this area. These have included support for the activities of the FTAA administrative secretariat in Miami, and a technical assistance program to provide comprehensive assistance to countries in the area of institutional strengthening for trade-related matters, including the FTAA.

13)Financial Markets

During this decade, most countries in the region have made significant progress in restructuring and developing their financial markets, building upon a foundation of political and economic stability. As governments increasingly liberalized those markets, they attracted growing amounts of capital. Consequently, Latin American markets, which were severely jolted by the Mexican peso crisis early in 1995, managed to largely withstand the shockwaves from the recent Asian financial collapse.

Nevertheless, the region must consolidate and extend those reforms in order to foster the development of more sophisticated markets, institutions, and instruments. Countries in Latin America and the Caribbean will have to take steps to reduce their reliance on bank dominated systems and create the conditions for other institutions that may meet their investment needs.

In order to reduce the potential cost of any future financial crises, the countries must also persist in efforts to bolster their regulatory and supervisory bodies. The Bank has financed financial reform projects worth over US$5.7 billion in 23 countries during this decade, and it is constantly seeking new ways to work with governments, regulators, and private-sector institutions in order to develop efficient markets. To that end, the Bank will strive to recognize advances, point out potential shortcomings, disseminate information, and provide financial and technical resources.

Besides the support for financial reform granted to 24 countries through its regular operations, the Bank strongly supports implementation of the initiative contained in the plan of action. In particular, it has financed a review of compliance by the Bank's units with the Core Principles of Banking Supervision, and it is preparing a special Financial Markets Initiative to support the implementation of corrective measures wherever deficiencies are detected.

This finance initiative is a comprehensive package for financial-market development. It includes crisis prevention and support for early problem detection; implementation of risk-management systems in private banks; implementation of the core principles, including in securities and in insurance supervision; enhancement of financial disclosure at the public and private level; and support for early resolution of problem credits, among other activities.

Regarding payments and clearance and settlements in the region, the Bank has supported seven operations in thirteen countries. In October, the Bank hosted an international conference on this topic with an eye to strengthening relations between institutions in the region.

It should be noted that in 1999, the Board of Governors agreed to use the private sector window to complement public sector lending as part of a coherent strategy for domestic capital market development. In pursuit of this goal, the Bank's Private Sector Department is developing supporting instruments and financial intermediation programs which achieve the intended objective of greater liquidity and efficiency in local currency financial markets, as well as a lower cost of capital.

14)Infrastructure

Private-Sector Support. The IDB estimates that if the countries of Latin America and the Caribbean were to grow at an annual rate of five percent, they would have to invest nearly US$70 billion every year in infrastructure. Since many countries in the region must attain even higher rates of economic growth, that figure may be too conservative.

Historically, infrastructure support has been the biggest component of the Bank's lending program. Between 1971 and 1994, the Bank invested an average of US$1.8 billion annually in projects in the transport, power, water and sanitation, and telecommunications sectors'. These resources were channeled mainly through the public sector. However, in recent years, the private sector has played an increasingly important role in infrastructure projects, largely due to the region's massive privatization programs. The Bank responded to this trend by opening a direct lending window for private-sector projects in 1994.

Since 1995, the Bank has lent an average of US$1.7 billion a year for infrastructure projects. The private sector's participation in that financing increased from US$128 million in 1995 to over US$577 million last year. The Inter-American Investment Corporation (one of the arms of the IDB Group) has been supporting small and medium-scale infrastructure projects carried out by the private sector since its creation in 1989. Currently, it has US$61.5 million of its US$570 million investment portfolio in 13 private infrastructure ventures.

The Multilateral Investment Fund (the third arm of the IDB Group) has provided US$33.8 million in grants to support regulatory reform and privatization programs that foster the private sector's participation in infrastructure. Since the Summit, the Bank has approved 21 infrastructure loans for a total of US$1.7 billion, and 43 technical-cooperation projects for a total of US$6.9 million. The IDB Group expects to expand the scope of its operations in this field, enhancing its guarantee program to cover most political risks. However, the public sector will continue to be the major beneficiary of the Bank's project lending.

Regarding the guarantee program, the Bank's Private Sector window offers full credit guarantees to private sector beneficiaries, in addition to the political risk (partial risk) guarantees mentioned above. For example, several types of comprehensive all-risk credit guarantees are available, ranging from IDB coverage for all risks for the entire term of a loan made by a commercial lender (made in local currency), to IDB coverage for all risks, but only for selected terms of a loan made by a commercial lender (typically made in U.S. dollars) - and tailored on a case-by-case basis. Political risk guarantees cover the following principal risk categories: breach of contract and currency convertibility and transferability guarantees, in addition to guarantees for other political risks.

The Bank has also been and will continue to be a major player in the creation of an enabling environment through the Multilateral Investment Fund (MIF), which has recently approved a special line of credit (activity) to support concessions. The Bank's Private Sector Department is also opening a special credit line to finance preparatory studies leading to concessions.

Transport. In this priority area, the Bank has been an important provider of funds for public and private investment. Currently, the Bank is increasing its funding for private ventures in transportation. In several countries, Bank loans are facilitating the shift to private management of an important portion of their transport infrastructure. In this effort, the Bank has been funding rehabilitation and improvements of transport links that are targeted for concession or have potential for private operators.

The Bank has been active in supporting the region's development in other infrastructure areas such as water and sanitation, energy and communications, with many of these loans funded through its private sector window. Indeed, since 1994 the Bank has approved 17 energy loans amounting to $800 Million, 10 transportation loans for $ 337 Million, five loans for water and sanitation valued it $160 Million, one loan for communications for $75 Million, and $75 Million for a loan to support the development of capital markets that participate in infrastructure investments.

15)Science and Technology

The Bank has supported the Summit's initiatives in the area of science and technology on two fronts: the development of a Bank strategy in the sector, and special initiatives to deal with the impact of weather phenomena in the region. The IDB has made major contributions to building country capacities since lending began in 1962. Past IDB lending for science and technology has boosted human and physical infrastructure, especially in universities; strengthened science funding agencies, especially by channeling funds to peer reviews and open competitions; encouraged private-sector investment in research and development through technology-development funds; and supported individual research institutions of merit.

The Bank is currently debating the direction of a new strategy for science and technology. The new strategy emphasizes a systems approach; an increased role for technology; continued, but more focused, support of science research and training; increased support for smaller, poorer countries, and a parallel increase in support for education and training, which will impact both directly and indirectly on science and technology capacity in the region.

Recently, and in line with the Summit priorities, the Bank has undertaken initiatives to improve the prediction and mitigation of natural phenomena, such as El Niño The Bank has already taken immediate steps with emergency loans to deal with the initial impact of El Niño in Argentina, Ecuador, Paraguay, and Peru.

On a related subject, the Board of Executive Directors has given clearance for a new strategy and operational policy in the area of information-age technologies. At the same time, the Board has created a new unit in the operating complex to promote and support projects and technical assistance in this new arena of technology. This new and exciting area of Bank action is seen as an important gateway to the future and to innovation in the countries of the region.

In terms of fresh lending, since the Summit, the Bank has approved four loans for a total amount of US$75.6 million, and nine technical-cooperation projects in the amount of US$890,000.

16)Regional Energy Cooperation

The Bank has increased substantially the scope and depth of its analysis of energy projects and has pioneered lending for renewable energy and energy efficiency and conservation in the region. Seeking the transfer of technologies and knowledge, the Bank has also sponsored energy-efficiency conferences, in which the energy ministers and utility executives of borrowing countries interact with experts from the United States, Canada, and Europe. It also has supported many of the activities of OLADE, the regional energy agency, in energy planning and renewable energy.

The Bank has also launched - in cooperation with the U.S. Department of Energy - the Program for Financing Energy Services in Latin America and the Caribbean. The objectives of this program are to: (i) integrate renewable-energy and energy-efficiency services in the design of energy strategies in Latin American and Caribbean countries; (ii) identify bankable, sustainable projects for funding by multilateral and bilateral donors acting in concert with host country and national and international private-sector participants; (iii) facilitate the financing of renewable-energy technologies and conservation initiatives for small-scale energy users through the identification and utilization of in-country financial institutions, working with support from the Bank; and (iv) improve the quality of life in urban and rural communities by providing low-cost and environmentally beneficial energy technologies that utilize indigenous renewable resources, as well as by promoting savings through energy conservation. The Bank has already made three loans for end-use energy efficiency and conservation and is supporting the -preparation of another three.

Seeking to modernize its approach to the energy sector, the Bank is currently putting the finishing touches on a new energy strategy. The new guidelines recognize the importance of regional cooperation and attach clear priority to regional networking in this key sector.

17)Microenterprise and Small and Medium-sized Enterprises

The Bank grants global and multisectoral credit operations to fund small and medium-sized enterprises in the region. Furthermore, for over 25 years the Bank has supported a specific program targeted at microentrepreneurs. This program recognizes the access problems of small-business operators and provides specialized assistance and credits to them.

During the 1990s, the Latin American and Caribbean countries have recognized the development of microenterprises and small and medium-sized enterprises as a powerful tool to promote economic growth and reduce poverty. More than 200 million people, most of them of modest means, work in such businesses across the region. These entrepreneurs offer tremendous potential for economic growth, social development, and job creation. Only a small fraction of these businesses, especially as far as microenteriprises are concerned have access to formal financial services. Lack of credit and other essential types of support curtails their growth. The IDB believes this is one of the biggest constraints that the region faces in this area. These businesses also lack access to business-development services and appropriate regulatory regimes to allow them to grow.

Regarding the next category in size, the small and medium size businesses, the Bank has long supported their development, especially through lending programs designed to increase their access to investment credit. Through the MIF, the Bank is fostering the establishment of business-development centers and providing other support for nonfinancial services to small and medium-sized enterprises, as well as strengthening financial institutions that lend to the sector, supporting policy reform, and helping to create venture capital funds to promote investment in the expansion of these businesses. Since the Santiago meeting , the Bank has carried out the following activities in support of the Summit priorities:

Ensuring that low-income microenterprises and SMEs have access to financial services. The IDB has approved several loans during the past year to facilitate the access of these enterprises to financial resources. They cover a variety of issues and geographical areas: one in Brazil (US$1 billion) and one in Chile (US$240 million) for SMEs, two in Peru (US$200 million for SMEs and US$30 million for microenterprises), and one in Bolivia (US$50 million) for microenterprises and small businesses.

The IDB approved a new policy creating the Social Entrepreneurship Program in December 1998. The program will support private and local government organizations that provide credit, business-development services, and social and community-development programs specifically targeted to low-income microentrepreneurs and their families. Twenty-one projects (for a total of US$10 million) were approved under its predecessor, the Small Projects Program, in 1998, most of them credit programs. It is expected that US$15 million in project financing will be extended under the new program in 1999. The majority of the programs for microenterprise development recently approved by the Bank (for a total of US$170 million) include a focus on low-income enterprises (see description above).

Promoting interinstitutional coordination through interchange mechanisms. The IDB organized the first Inter-American Forum on Microenterprise in Mexico City in March 1998. The forum was attended by over 500 practitioners, policy-makers, business people, and development agencies from Latin America, the Caribbean, and other parts of the world. The second forum, organized jointly with Argentina's Secretariat for Small and Medium-Sized Enterprises, was held in Buenos Aires in June 1999. In July 1998, the IDB organized a round-table discussion among top policy-makers responsible for the development of small and medium-sized enterprises in Latin America, the Caribbean, the United States, Canada, Europe, and Japan, to compare experiences and promote best practices. Each country contributed a summary of its SME policies.

Together with the Donor Committee on Small Enterprise and in cooperation with the Government of Brazil, the IDB organized a high-level seminar on business-development services, held in Rio de Janeiro in March 1999. The seminar, which was attended by 400 specialists, policy-makers, and representatives of donor agencies, also contributed to progress on the Summit's Action Item calling for strengthening of nonfinancial services to microenterprise and SMEs.

Promoting appropriate financial-policy reforms. The IDB approved, in April 1999, a regional technical-cooperation program that will serve to identify and disseminate financial sector policy and regulatory reforms to accelerate the entry of formal financial institutions into microfinance and the upgrading of nonformal microlenders into regulated institutions.

The program will be carried out in conjunction with the regional association of banking supervisory authorities (ABSALAC) and the Superintendencies of Banks of Colombia, Paraguay, and Peru, and its results will benefit all countries of Latin America and the Caribbean who are members of ABSALAC.

During 1998, the MIF financed the first technical-cooperation program designed to improve the microfinance regulation. The program will help the Superintendency of Banks of Bolivia - the country with the most advanced microfinance services in Latin America - to create a specialized regulatory office for microfinance institutions. To summarize, since the Summit, the Bank has approved eight credit operations for an amount of US$2.7 billion. Although most of these resources are for SMEs, the magnitude of the program shows the priority that the Bank grants to this sector. In addition, the Bank approved 63 technical-assistance operations amounting to US$7 million.

18)Property Registration

Historically, the Bank pioneered property rights and titling programs in most of its agricultural credit operations. As a key factor in the demand for credit, farmers gained a recognized legal status to their land claims in all IDB-funded projects. Since the Summit, the Bank has funded a technical-assistance program in El Salvador for this purpose.

19)Health Technology

The Bank has been recognized as an important provider of funds for the reform and modernization of health systems in the region. Since the Summit, the Bank has approved four loans amounting to US$1.52 million, and 26 technical-cooperation projects amounting to US$12.5 million.

20)Women and the Family

Like wise, in recent years, the IDB has made considerable gains in building institutional capacity to address gender issues and in undertaking new initiatives that benefit women. The Bank has strengthened its institutional capacity by expanding its Women in Development Unit, the regional operational departments and, most recently, the Country Offices.

Since the Summit; the Bank has approved four loans amounting to US$105.8 million and 22 technical-cooperation projects valued at US$15.6 million. Some of these technical-cooperation grants are in new areas such as child development and care, women's leadership, domestic violence, strengthening emotional women's bureaus, women's access to technical training, and reproductive health.

At the same time, lending operations in the area of justice and legal reform are beginning to include activities for the control of domestic and social violence, and activities to legislate on this issue. Among these are programs to modernize the administration of justice in Honduras and to support reform of the justice system in El Salvador. It should also be noted, that the Bank has recently introduced measures to include the curtailment of domestic violence as a component of the gender analysis of its main stream operations. This new effort will increase its presence in all Bank activities in parallel with the increased awareness in its member countries of this important social issue.

The Bank continues to invest significant resources-in preparing the regional program to support women's leadership and representation. This is a collaborative program designed in conjunction with UNIFEM, UNICEF, UNDP, OAS/CIM, and the coordination of Latin American and Caribbean NGOs that seek to increase women's participation and their access to leadership positions in public and civic life. The main areas to be considered for funding are leadership-skills training, young women's leadership, coalition-building, legislative reform, public education, and policy influence and research.

21)Sustainable Development

Although the Bank has mainstreamed sustainable-development principles in all its operations since Santiago, a major program to protect the development of the Darien region in Panama has been approved. This project received a Bank loan valued at US$70.4 million.

The objective of the consultation was to review the state of the art of environmental management in Latin America and the Caribbean, exchange information on successful experiences, identify challenges and obstacles, and define lines of action that could be supported by the international agencies. The consultation focused on three core topics: (a) institutional challenges, (b) environmental-policy instruments, and (c) financing.

Climate Change. After the Kyoto event, the Bank, UNEP, and UNDP supported the creation of a Working Group on the Clean Development Mechanism to discuss climate change in the region. Following the Eleventh Meeting of Ministers of Environment of Latin America and the Caribbean, meetings were held in Costa Rica and Peru. The purpose of these meetings was to prepare for negotiations in the context of the Fourth Conference of the Parties to the Climate Change Convention that was held in Buenos Aires in November 1998, where progress was made on the rules and procedures of governance regarding climate change. There, the Declaration of the Inter-American Development Bank outlined the Bank's approach to supporting its borrowing member countries in the area of climate change.

In September 1998, the Bank held a consultative forum on a regional approach to the Kyoto challenge during which the role of the IDB was discussed and participants provided some direction for the Bank's climate-change strategy. The following lines of action where identified: capacity-building and technical assistance in the area of climate change; continuation of the program of Sustainable Markets for Sustainable Energy; and support for borrowing countries' needs in terms of financial and technical assistance for adopting integrated coastal-zone and forest-management programs.

Sustainable Markets for Sustainable Energy (SMSE). Developing markets for sustainable energy is the latest and most innovative IDB approach to the creation of a market environment in Latin America and the Caribbean. It is expected that this will result in large numbers of projects involving energy efficiency, renewable-energy sources, and clean, effective urban Transport to benefit countries, consumers, companies, and donors. Established in 1996, the central objectives of the Sustainable Markets for Sustainable Energy (SMSE) Program is to act as a catalyst for establishing these markets in a context of economic and sectoral reform, restructuring, and decentralization. Three initial areas of focus were chosen: (a) energy efficiency, primarily in industrial-sector applications; (b) the use of renewables in rural, off-grid applications; and (c) more efficient energy use in urban transportation. To date, six projects covering these areas have been developed in five countries (Argentina, Brazil, Ecuador, El Salvador, and Peru). The SMSE Program has pioneered an important new approach to addressing the challenge of introducing energy efficiency and renewable energy into markets in these countries.