Argentina joins Andean Development Corporation

The executive president of the Andean Development Corporation (CAF), Enrique García, and the Argentine foreign minister, Adalberto Rodríguez Giavarini, signed today in Buenos Aires the agreements for Argentina to become a CAF shareholder and for development of CAF operations in Argentina.

The CAF executive president, Enrique García, said Argentine membership is very significant because it expands the Corporation’s integrationist objectives. The CAF now has all the countries of the Andean Community (Bolivia, Colombia, Ecuador, Peru and Venezuela) among its shareholders, and, with the upcoming membership of Uruguay, all the members of MERCOSUR (Argentina, Brazil, Uruguay and Paraguay), along with Chile, Mexico, Panama, Jamaica, Trinidad and Tobago, soon to be joined by Costa Rica and Spain.

García said membership is consistent with Argentina’s policy of integration with the other countries of the region and strengthens CAF’s mission to act as a link in the integration process by facilitating the promotion and financing of national and regional integration programs and projects, and creating closer relations between the two main integration blocs: the Andean Community and MERCOSUR. Argentina’s membership strengthens the CAF’s catalytic role in attracting resources from international financial markets to finance projects in the private sector, García added.

The CAF has played an important anti-cyclical role by providing financial backing for its shareholder countries in times of economic expansion and contraction, and has become the principal source of multilateral financing for the Andean region. Along with conservative and prudent financial policies, and the constant support of the governments of the shareholder countries, these efforts have prompted the international rating agencies to assign investment grades to the multinational lender: A from Standard & Poor’s; A2 from Moody's and A from Fitch. These grades confirm the Andean lender’s position as the top Latin American issuer.

In his remarks, the Argentine foreign minister said his country was joining a multinational institution whose results and financial indicators have been consistently positive, The CAF offers its members a reliable and timely source of external financing made possible by its catalytic effort to attract competitive resources into the region from first-class international commercial banks to finance infrastructure projects and the small business sector.

Argentine presence strengthens integration and opens opportunities for local companies Enrique García also mentioned the Corporation’s role in identifying, promoting and financing integration projects, including the Bolivia-Brazil Gas Pipeline; the Bolivia-Peru Ilo-Desaguadero Integration Corridor; the Paraguay-Bolivia Integration Corridor, the Transchaco Highway; the Brazil-Venezuela Integration Corridor; the Brazil-Venezuela Electric Power Interconnection; the Road Infrastructure Program in the Inter-Oceanic Corridor with Panama; the Road Transport Program for Peace in Colombia; the Yacambú-Quíbor Water System in Venezuela and the Chavimochic Irrigation and Water Supply System in Peru.

The CAF president said the vigorous presence of Argentina in the multilateral organization would strengthen the South American Regional Integration Initiative (IIRSA), which has identified 12 physical integration hubs covering all South America and six sectoral processes of great importance for trade among all the countries of the region. As a result, important possibilities are opening for Argentine suppliers of the goods and services required by these projects, which would have a favorable impact on generation of jobs and exports.

Argentina’s long border with Brazil, Paraguay, Bolivia, Chile, Uruguay will facilitate the development of the IIRSA, especially the execution of major projects such as the Paraguay-Paraná Waterway and border development projects, García said.

On this point, the CAF chief added that, with a view to stimulating broad cooperation and integration between the shareholder countries, the CAF would sign a major technical cooperation agreement with the Intergovernmental Committee of the Paraguay-Paraná Waterway to move forward with studies on development of the waterway between Puerto Quijarro (Canal Tamengo), Corumbá and Santa Fe.

Finally, as an expression of Argentina’s commitment to support the CAF, Rodríguez Giavarini announced that a CAF working mission would arrive in September to identify priority projects and other actions for the country to be implemented after ratification of the international agreements.