The Bank was created in response to a longstanding desire on the part of the Latin American nations for a development institution that would focus on the pressing problems of the region. The Bank's original membership included 19 Latin American and Caribbean countries and the United States. Subsequently, eight other Western Hemisphere nations, including Canada, joined the Bank. From the beginning, the Bank developed links with many industrialized countries on other continents and in 1974 the Declaration of Madrid was signed to formalize their entry into the Bank. Eighteen non-regional countries joined the Bank between 1976 and 1993. Today Bank membership totals 46 nations. Many frequently asked questions about the Bank are answered in the Basic Facts publication. The Bank's current corporate strategy is described in the July, 1999 report, "Renewing the Commitment to Development."

In addition to the Bank, the IDB Group consists of the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund (MIF). The IIC, an autonomous affiliate of the Bank, was established to promote the economic development of the region by financing small and medium-scale private enterprises. The MIF was created in 1992 to promote investment reforms and to stimulate private-sector development.

In its 41 years of operations, the Bank has become a major catalyst in mobilizing resources for the region. The Bank's Charter states that its principal functions are to utilize its own capital, funds raised by it in financial markets, and other available resources, for financing the development of the borrowing member countries; to supplement private investment when private capital is not available on reasonable terms and conditions; and to provide technical assistance for the preparation, financing, and implementation of development plans and projects.

In carrying out its mission, the Bank has mobilized financing for projects that represent a total investment of $263 billion. Annual lending has grown dramatically from the $294 million in loans approved in 1961 to almost $5.3 billion in 2000, after peaking at almost $10.1 billion in 1998.

The Bank's operations cover the entire spectrum of economic and social development. In the past, Bank lending emphasized the productive sectors of agriculture and industry, the physical infrastructure sectors of energy and transportation and the social sectors of environmental and public health, education and urban development. Current lending priorities include poverty reduction and social equity, modernization and integration, and the environment.

During the 1960s and 1970s the Bank was a pioneer in financing social projects such as health and education. The Bank has made an effort to see to it that its lending operations directly benefit low-income populations. Its innovative Small Projects Program seeks to provide small financings to microentrepreneurs and small-scale farmers and since 1990 the Bank has broadened its support to the informal sector. In recent years, the Bank has financed sector reform loans and debt reduction programs. In 1995, it began lending up to 5 percent of its ordinary capital resources directly to the private sector, without government guarantees.

The financial resources of the Bank consist of the ordinary capital accountcomprised of subscribed capital, reserves and funds raised through borrowingsand Funds in Administration, comprised of contributions made by member countries. The Bank also has a Fund for Special Operations for lending on concessional terms for projects in countries classified as economically less developed.

The Bank has borrowed funds for its operations from the capital markets of Europe, Japan, Latin America, the Caribbean and the United States. The Bank's debt is AAA rated by the three major rating services in the United States, and is accorded equivalent status in the other major capital markets. More information is available on the Bank's capital markets activities.

The Board of Governors is the Bank's highest authority, on which each member country is represented. Governors are usually Ministers of Finance, Presidents of Central Banks or officers of comparable rank. The Board of Governors has delegated many of its operational powers to the Board of Executive Directors, which is responsible for the conduct of the Bank's operations.

The Bank, whose headquarters are in Washington, D.C., has Country Offices in each of its borrowing member countries and in Paris and Tokyo.

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