{"id":7768,"date":"2019-01-13T15:13:49","date_gmt":"2019-01-13T19:13:49","guid":{"rendered":"https:\/\/www.bu.edu\/gdp\/?p=7768"},"modified":"2022-07-21T15:31:42","modified_gmt":"2022-07-21T19:31:42","slug":"can-south-south-cooperation-compete-the-development-bank-of-latin-america-and-the-islamic-development-bank","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/gdp\/2019\/01\/13\/can-south-south-cooperation-compete-the-development-bank-of-latin-america-and-the-islamic-development-bank\/","title":{"rendered":"Can South\u2013South Cooperation Compete? The Development Bank of Latin America and the Islamic Development Bank"},"content":{"rendered":"<figure id=\"attachment21304\" aria-describedby=\"caption-attachment21304\" style=\"width: 646px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" src=\"\/gdp\/files\/2019\/01\/jorge-salvador-kSTYyURYT0k-unsplash-636x530.jpg\" alt=\"\" width=\"636\" height=\"530\" class=\"size-medium wp-image-21304\" srcset=\"https:\/\/www.bu.edu\/gdp\/files\/2019\/01\/jorge-salvador-kSTYyURYT0k-unsplash-636x530.jpg 636w, https:\/\/www.bu.edu\/gdp\/files\/2019\/01\/jorge-salvador-kSTYyURYT0k-unsplash-1024x854.jpg 1024w, https:\/\/www.bu.edu\/gdp\/files\/2019\/01\/jorge-salvador-kSTYyURYT0k-unsplash-768x640.jpg 768w, https:\/\/www.bu.edu\/gdp\/files\/2019\/01\/jorge-salvador-kSTYyURYT0k-unsplash-1536x1281.jpg 1536w, https:\/\/www.bu.edu\/gdp\/files\/2019\/01\/jorge-salvador-kSTYyURYT0k-unsplash-2048x1708.jpg 2048w\" sizes=\"(max-width: 636px) 100vw, 636px\" \/><figcaption id=\"caption-attachment21304\" class=\"wp-caption-text\">Caracas, Venezuela. Photo by Jorge Salvador via Unsplash.<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">The last few decades have seen significant progress in multilateral institutions across the Global South. Southern-led multilateral development banks (MDBs) play a key role in harnessing global capital to finance the sectors most important to borrowers, especially infrastructure. Two prominent Southern MDBs, the Development Bank of Latin America (CAF) and the Islamic Development Bank (IsDB), have become crucial drivers of regional infrastructure growth.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In a <\/span><a href=\"https:\/\/onlinelibrary.wiley.com\/doi\/10.1111\/dech.12468\"><b><i>new journal article<\/i><\/b><\/a><span style=\"font-weight: 400;\"> published in the journal of <\/span><i><span style=\"font-weight: 400;\">Development and Change<\/span><\/i><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.bu.edu\/gdp\/profile\/rebecca-ray\/\"><span style=\"font-weight: 400;\">Rebecca Ray<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/www.bu.edu\/gdp\/profile\/rohini-kamal\/\"><span style=\"font-weight: 400;\">Rohini Kamal<\/span><\/a> <span style=\"font-weight: 400;\">explore whether CAF and IsDB have lived up to their goals of establishing borrower control over bank governance without sacrificing financial dynamism. Ray and Kamal use power-weighted voting indices for member representation on bank boards, to measure the practical power of each country in forming decision-making coalitions on those boards. They also analyze bank operations to determine whether the new approach to MDB governance reflects in their internal performance. The authors compare the banks\u2019 financial performance with that of their Northern peers, the Inter-American Development Bank (IDB) and the World Bank International Bank for Reconstruction and Development (IBRD), in development finance and their ability to address borrower needs in the development of infrastructure projects.<\/span><\/p>\n<h5><b>Main findings:<\/b><\/h5>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The CAF and IsDB have become major players in development finance, including in sustainable infrastructure, successfully challenging the influence of traditional Northern MDBs, like the IBRD and hybrid institutions like the IDB.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The CAF and IsDB offer greater voice for borrowing countries in decisions governing how development finance is made, especially for larger borrowers, than their Northern-based counterparts.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The more representative structure of the Southern-led MDBs has not hampered their financial performance, with both banks having grown rapidly in the last decade.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">The CAF and IsDB are now major lenders whose business models will have significant impacts on the regions in which they operate.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The banks\u2019 borrower-forward approach does hamper their ability to raise capital and achieve investment-grade bond ratings, AAA bond ratings.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">These banks have focused on infrastructure finance to an increasing extent, filling a gap left by the IBRD as it shifts toward \u2018softer\u2019 loan projects, proving that representative institutions based in the Global South can hold their own among major banks.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Neither the CAF nor IsDB, have instituted comprehensive environmental and social safeguards for major infrastructure projects.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Important issues remain in relation to their continued internal capacity development, especially with regard to the environmental and social safeguards necessary to oversee lending. For Ray and Kamal, it remains to be seen whether these lessons will be learned in the future by borrower-led MDBs.<\/span><\/p>\n<a href=\"https:\/\/onlinelibrary.wiley.com\/doi\/10.1111\/dech.12468\" class=\"button\">Read the Journal Article<\/a>\n","protected":false},"excerpt":{"rendered":"<p>The last few decades have seen significant progress in multilateral institutions across the Global South. Southern-led multilateral development banks (MDBs) play a key role in harnessing global capital to finance the sectors most important to borrowers, especially infrastructure. Two prominent Southern MDBs, the Development Bank of Latin America (CAF) and the Islamic Development Bank (IsDB), [&hellip;]<\/p>\n","protected":false},"author":15935,"featured_media":21304,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1149,66,93,156,72,105,77,1071,76,90,104],"tags":[171,2477,2476,437,409,1165,151,973,884,2481,2396,420,2395,2479,2478,410,208,1514,558,391,175,465,2247,2202,2480],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/7768"}],"collection":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/users\/15935"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/comments?post=7768"}],"version-history":[{"count":7,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/7768\/revisions"}],"predecessor-version":[{"id":21380,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/7768\/revisions\/21380"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media\/21304"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media?parent=7768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/categories?post=7768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/tags?post=7768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}