'Poverty and inequality put pressure on natural resources': Sergio Díaz-Granados

One of the key players in this United Nations Conference on Biodiversity (COP16) is the Development Bank of Latin America and the Caribbean (CAF), a multilateral organization that contributes financially to various environmental defense projects in the region.

EL TIEMPO spoke with Sergio Díaz-Granados, executive president of the CAF, about the financial institution's participation in the conference and the concerns of these entities regarding sustainability, the protection of biodiversity in the region and the use of natural resources.

In Latin America and the Caribbean, nature knows no boundaries. In fact, what the Bank has been trying to do all these years is to work in 14 strategic ecosystems, from Mexico to Argentina. And not only in the physical continental territory, but also in the peninsula and, of course, in the two seas. Latin America and the Caribbean need to have an aggregate vision, if you will, of their ecosystems. Obviously, the most emblematic is the Amazon; there are eight jurisdictions in the Amazon and there are a number of communities around it: almost 50 million people who live in the Amazon, in Peru, Colombia, Ecuador, Venezuela, Guyana, Brazil. But there are other ecosystems that are equally important to Latin America and the Caribbean, that unite us. We have to look at the region as one big ecosystem, and that helps us to prepare the Bank's projects for financing, because we cannot just look at isolated facts, but try to look at them in an integrated way. That is why we say that it is nature that unites us.

When I became President of the Bank three years ago, we started with a strategic redefinition until 2026, with a plan that we have fulfilled. The first was to capitalize the Bank, that is, to obtain more resources to carry out more operations and more programs, based on what we have achieved in the Green Bank and the Blue Bank of Latin America and the Caribbean. It is a shift in the operational part of the Bank towards more green operations. What does that mean? Operations that prepare us for climate change. We are already facing the consequences of climate change in Latin America and the Caribbean. This year alone, droughts, floods and fires will cost us nearly $7 billion. And that is exactly the amount of money that the countries are going to put in so that, for example, a bank like CAF can grow over the next 10 to 15 years to be able to lend solutions to the countries. We are at a big crossroads as a region, so the bank will be a green and blue bank.

We took over El Salvador's debt for the next few years with very short maturities. We completely rescheduled El Salvador's debt, and we gave El Salvador $350 million in savings. And that money will go into a special vehicle to protect the Lempa River, which is the most important river in Central America, which is also the river that supplies water to El Salvador. It is a river that has been heavily polluted throughout its basin.

Absolutely. We are at a very critical moment of public debt in the region and at a crossroads where the region has to deal with the public debt fronts, cannot neglect the poverty fronts, and has to face the climate crisis. That is where we have tried to park the Bank so that it can contribute to the solution. That is, combine the market solution, take the resources, pay off the debt, generate savings. And we can use those savings together with science, with a scientific team, to protect natural resources.

An expensive debt for a cheap debt. The operation is basically to find the savings and give them back to nature.

We believe that COP16 is a very important discussion for Latin America and the Caribbean. As a biodiverse region, having this global discussion in our house, in our backyard, motivates us to show not only the sensitivity of the situation, the serious diagnosis that we have today in Latin America and the Caribbean, but also the search for solutions. We will have more than 70 activities from October 21 until the last day of the COP to carry out this discussion. We have announcements of new programs and projects, but also the creation of partnerships that will serve to work on improving financial instruments for the protection of natural resources.

For example, we will be working with mayors and governors. If you are interested in how local governments can become relevant actors in the conservation of natural resources, you will have a great opportunity to see this discussion at COP16. Let me give you a practical example: What does it mean for a citizen in Latin America to have a good botanical garden? What does it mean for a city to be able to restore its watersheds: streams, canals, lakes, wetlands? Eighty percent of Latin America's population lives in cities; what does it mean for citizens to protect their natural resources in the face of the water shortages that we see in many of our cities in Colombia and throughout the region? In Cali, you will have a full day to discuss our Biodiverse Cities Network program with the mayor, but also with mayors from other parts of Latin America and the Caribbean. But we will also be able to discuss very specific things for Colombia, for example, in the case of the Amazon, how to generate financial instruments that really reach the communities. At the end of the day, it is our Afro-descendant or indigenous peoples who are the main beneficiaries of this responsibility to take care of natural resources. So the question is: how do we reconcile the responsibility of the North with the needs of the South?

Basically, it is about financial innovation. We have the capacity, as development agencies and as multilateral banks, to widen the way, to involve the private sector more and, of course, to open the way to other actors that are fundamental, such as in the case of medium and large cities, metropolitan areas that have a great capacity for transformation, that can help us in the way we consume energy. They can help us in the way we work or in the way we transport ourselves. Today, there are so many options available to actors with some responsibility on the issue of climate change, on the issue of protecting natural resources, that the role of banks is essentially to contribute more innovation, creativity and new instruments.

We have several activities with the private sector during these two weeks of COP16. Whether in the production of goods or in the production of services, whether in the use of energy or in the use of natural resources, this sector is going to be central in the coming years. And I wouldn't say in the next few years, I would say from now on. Regardless of size, regardless of sector, what is your environmental footprint? We can all do a better job than we are doing.

Let me divide the answer into two parts. Two years ago, in the case of CAF, we produced a document called "Inherited Inequalities". Latin America and the Caribbean is the most unequal region in the world and, paradoxically, one of the poorest. Moreover, we have an inequality that is inherited. We have almost 11 generations of transmitted poverty, and we say that there is a poverty that is transmitted in the cradle, that has a color. The darker the color, the greater the guarantee of inequality, of poverty; this is a reality in Latin America and the Caribbean. In the same Bank analysis, two years ago, we recommended working on at least three fronts that would do a lot to reverse the situation. The first is access to housing, which is one of the most critical issues in Latin America and the Caribbean today.

The second answer, of course, is education. Latin America has done a phenomenal job in of primary education coverage, but we have a serious problem in secondary, technical and university education. We have 30 million young people who are neither studying nor working, a dramatic number. Criminal activity is concentrated in that population. Job creation is important. Latin America and the Caribbean has been growing at an average of 1.6 percent for 15 years. Between 1950 and 1980, we grew at 5.5 percent. Between 1980 and 2008, we halved that to 2.6 percent, and since 2008 we have had all kinds of crises. All of this has led to a cooling of the Latin American economy, a squeezing of the middle class, and an increase in poverty. And the link with the environment is critical, because people are looking for outlets in informality. Six out of ten workers in Latin America are informal. Informality also puts pressure on natural resources. There is a direct link between climate change preparedness and the situation of worsening poverty and inequality.

ERNESTO CORTÉS - EDITOR-IN-CHIEF OF EL TIEMPO