The Board of Governors of the Central American Bank for Economic Integration (CABEI) yesterday confirmed Argentina as host for the 59th meeting to be held during the second half of April 2019. The decision was made yesterday at the 58th Ordinary Board of Governors Meeting held in the Dominican Republic between April 26 and 27.

The Minister of Finance, Luis Caputo, said that “Argentina hosting the next CABEI Board of Governors Meeting is a clear sign of the international community’s confidence in the changes the country is implementing”. In addition, he welcomed the support of the bank to Argentina with the financing of projects for 170 million dollars related to scientific research, public works, health and education.

This is the most important event of the CABEI where high-impact decisions that have positive consequences on the socio-economic development of the citizens of member countries are made.

The Board of Governors is the highest authority of the Bank and, according to the CABEI Constitutive Agreement, it is held once a year. Each member country is represented by one governor and one alternate governor, who may be the Minister of Economy, the Minister of Finance, Public Credit, the President of the Central Bank, or the corresponding official that conducts the representation according to the domestic rules of each country.

The next meeting, to be held in April 2019 in Argentina, will be attended by authorities of member countries and leaders from the regional private sector. The last time this event took place in Argentina was in March 2006 in San Carlos de Bariloche, Province of Río Negro.

The CABEI is a multilateral financial institution created in 1960 to promote the integration and development of its founding members. Over the years, the institution has incorporated new regional and extra-regional partners, including Argentina since the approval of the Bank’s Constitutive Agreement in 1994.

The Minister of Finance, Luis Caputo, participated yesterday in the panel “A Conversation with Ministers of Finance from Latin America: The Future of Latin American Fiscal Policy and Growth”, organized by the Center for Global Development.

The participants of the panel talked from their local point of view about common issues of regional impact such as the situation and the challenges faced by fiscal and financial policies of the region.

In his speech, Caputo talked about the international financial context and he said that Argentina is well positioned: “As long as we meet fiscal targets, we will be able to neutralize any increase in interest rates”, he highlighted. In addition, Mr. Minister said: “We are working to depend less on international financing and more on ourselves”, and he added: “We know we have chosen the right path”.

Regarding the macroeconomic and financial context of the country, Caputo explained: “We have inherited a country with a fiscal deficit of more than 5.5 percentage points, undercapitalized, in default and with a poverty rate of 30%. Today, we are normalizing the economy, with a balanced budget, with clear rules and an intelligent insertion into the world”. In addition, he highlighted that in order to achieve balance, Argentina first had to settle the conflict with holdouts: “It opened us the possibility of financing and we are doing it at the lowest rates in history. Last year, our average rate was of 4.2% in dollars”.

“We needed to reduce our fiscal deficit on the one hand and invest more in infrastructure on the other hand because we needed to settle that social debt. That is the reason we have chosen a gradual path to achieve said balance”, the Minister of Finance explained.

Caputo highlighted the leading role of the Public-Private Partnership scheme (PPP) to finance infrastructure and meet fiscal targets: “We have more than 60 projects in the pipeline for almost 30 billion dollars which will be executed in the next four years. This almost doubles the investment in infrastructure”.

Likewise, he talked about the tax reform conducted in Argentina and he explained that the “work done is remarkable because we are reducing fiscal deficit at the same time that we are lowering taxes and investing more in infrastructure. The best way to fight informality is to simplify the tax regime”.

Finally, the Minister of Finance focused on recovering the credit, not only for the country, but for the people and SMEs: “Our main goal is to make credit available for everyone at reasonable rates and terms; it is something we have to do if we want to have a sustained and inclusive growth”, he said.

The other participants of the panel were: the Minister of Treasury of Colombia, Mauricio Cárdenas; the Minister of Treasury of Paraguay, Lea Giménez Duarte; the Secretary of Treasury and Public Credit of Mexico, José Antonio González Anaya; and the Minister of Treasury of Chile, Felipe Larraín Bascuñán.

The Minister of Finance, Luis Caputo, together with the team of the Ministry of Finance held a meeting on Friday with Queen Maxima of the Netherlands and they talked about the progress made by the Financial Inclusion Council, an initiative promoted by the National Government to foster policies of universal access to bank and financing services. The meeting was held within the framework of the World Bank Spring Meetings in Washington DC.

At the meeting, Caputo highlighted the tough work done by Queen Maxima as representative before the United Nations in the agenda of Inclusive Financing for Development. “Her knowledge in financial inclusion is an important tool for those who want to promote comprehensive financial policies that reach the most vulnerable sectors of society”, Mr. Minister said and highlighted the commitment of the World Bank Group in promoting said initiatives.

In turn, Caputo talked with Queen Maxima about the intention of President Mauricio Macri’s Government to develop a strategic public policy focused on the financial inclusion of the most vulnerable ones. As a result, in June last year, the Financial Inclusion Council was created, with the objective of promoting and organizing the policies developed by different Ministries and Governmental bodies. This council is chaired by the Minister of Finance, Luis Caputo, and it includes the participation of officials of this Ministry and other representatives of the Ministry of Treasury, the Ministry of Production and Social Development, the Central Bank and the Office of the Cabinet of Ministers.

Regarding the implemented measures, Caputo and his team highlighted the digitalization of payment methods, the setting up of more correspondent banks, savings accounts free of charge and more flexibility in the requirements to open an account.

Likewise, the Minister of Finance highlighted the work done to extend the financial service to SMEs and entrepreneurs. “The Productive Financing Act is aimed at achieving access to credit in sustainable conditions, this is with better terms and rates”, Caputo said.

In addition, Queen Maxima committed herself to cooperate with the Argentine Government in the implementation of the national strategy of financial inclusion. More access to financial services contributes to the fight against informality and to the economic development of the country and the region.

The Minister of Finance, Luis Caputo, together with the Vice President of the World Bank for Latin America and the Caribbean, Jorge Familiar, signed a financing agreement of the International Bank for Reconstruction and Development (IBRD) for USD 50 million to cooperate in the execution of the Longer Term Financing Access for Micro, Small and Medium Enterprises Project (MiPyMES, for its acronym in Spanish). The agreement was signed at the World Bank headquarters in Washington DC within the context of the trip of the team of the Ministry of Finance to the United States to participate in the 2018 World Bank Spring Meetings.

“The World Bank and its bodies, such as the IBRD, are strategic allies in the promotion of productive development and support of financial policies for SMEs and entrepreneurs”, Caputo highlighted at the execution of the agreement.

The goal of the Project is to improve the access and strengthen the margin for long-term loans for Micro, Small and Medium Enterprises that meet the requirements.

The project will finance three elements: the Credit Line; the technical assistance and the development of capacities of the Investment and Foreign-Trade Bank (BICE, for its acronym in Spanish) that includes Reforms in the Financial Infrastructure, the promotion of the credit guarantee fund and the Strengthening of MiPyMES Capacity; and the Project Management.

The IBRD is an international organization created in 1944, part of the World Bank Group. The goal of this organization is to contribute to the development of the nations through loans for member countries.