OAS and IDB: democracy and development.

• Author: Bernal, Richard L.
• Position: INTER-AMERICAN SYSTEM

The Organization of American States (OAS) and the Inter-American Development Bank (IDB) are the twin pillars supporting democracy and development in Latin America and the Caribbean. These institutions perform complimentary roles in ensuring that the inextricable link between democracy and development is strengthened. Because violence, corruption, and crime grow out of situations of deprivation and hunger, democracy is difficult to sustain if the majority of people are living in extreme poverty. Economic development is essential for creating a socio-economic environment in which democracy can operate effectively. Likewise, the viability and dynamism of economic development is enhanced by democracy because democracy is conducive to private enterprise and facilitates active civil society participation in governance.

The purpose of the IDB, which began operations in 1959, is "to contribute to the acceleration of the process of economic and social development of the developing member countries, individually and collectively." The loans, grants, technical assistance, and policy advice provided by the Bank promote the economic and social development of Latin America and the Caribbean and support regional integration in the hemisphere.

Although the IDB was established at the OAS General Assembly in 1958, the IDB is not an agency of the OAS, and the Bank's early members included countries outside the Americas. Membership was granted through the original agreement establishing the Inter-American Development Bank; the original members of the Bank were OAS member states that accepted membership in the Bank by a certain date. Subsequently, membership was opened to other members of the OAS and to countries outside the Americas, particularly those from Europe and Asia. At present the Bank has 47 members.

OAS decisions on the participation of a member can affect that country's ability to borrow from the IDB. Honduras became ineligible to receive further loans from the IDB in July 2009 following the decision of the OAS Permanent Council to suspend its participation in the organization. The Bank's Charter does, however, allow it to lend to members of the Caribbean Development Bank that are not members of the IDB; this is a result of an agreement among IDB shareholders and is not a result of an agreement with the OAS.

[ILLUSTRATION OMITTED]

Since its inception, the IDB has provided loans to governments, state enterprises, and the private sector. The...