sustainable development 20 years on from the ... - José Eli da Veiga

<strong>20</strong>6
In addition to their implications in terms of financial flows, the presence of transnational
enterprises has an impact on the conditions (technological, management practices and others) under which
the economic activity of key sectors unfolds. The relation between FDI and the region’s <strong>development</strong> is
complex and has both positive and negative aspects. Nonetheless, owing to productive <strong>development</strong>
patterns in the region (see chapter I), the most salient feature is that, in general, the type of investment
undertaken, which also reflects conditions prevailing in the host countries, has not fostered productive
linkages or other favourable spillovers that could turn FDI into an engine for more <strong>sustainable</strong> productive
<strong>development</strong> (see ECLAC, Foreign Direct Investment in Latin America and the Caribbean, several
<strong>years</strong>). Moreover, sustainability —especially environmental sustainability— has not been a benchmark
for strategies to attract and encourage investment.
3. Contributions from international financial institutions and other <strong>sustainable</strong>
<strong>development</strong> organizations
Latin America and the Caribbean has access to a network of regional <strong>development</strong> banks committed to
promoting environmentally <strong>sustainable</strong> growth and poverty reduction, such as the Inter-American
Development Bank (IDB), and to subregional institutions such as the Andean Development Corporation
(CAF), the Central American Bank for Economic Integration (CABEI), the Caribbean Development Bank
(CDB), and the recently created Bank of the South. National and international <strong>development</strong> finance
institutions have been weaving the concept of <strong>sustainable</strong> <strong>development</strong> into their operations. Financing
for climate change mitigation projects has become a priority for multilateral <strong>development</strong> banks (MDBs)
over the last five y ears, and multilateral financing for these purposes is forecast to grow from
US$ 17 billion in <strong>20</strong>09 to US$ 21 billion in <strong>20</strong>12. 5
The main international sources of non-loan financing, including for climate change, are the Global
Environment Facility (GEF); the Multilateral Fund for the Implementation of the Montreal Protocol, the
Clean Development Mechanism (CDM) of the Kyoto Protocol of the United Nations Framework
Convention on Climate Change, and the more recently created Climate Change Adaptation Fund.
Between 1991 and <strong>20</strong>09, Latin America and the Caribbean received about 21% of the roughly
US$ 9 billion channelled through the GEF, not counting global projects or those encompassing several
regions —with biodiversity the main target sector, followed by climate change. The remainder was
destined for transboundary water, land degradation, depletion of the ozone layer, and persistent biological
pollutants (GEF, <strong>20</strong>10). The GEF is responsible, with others, for managing the Special Climate Change
Fund (SCCF), which has US$ 218 million (23% of the US$ 128 million in approved projects is allocated
to the region), and the Least Developed Countries Fund (LDCF), which has US$ 415 million (the region
has only received 5% of the US$ 177 million in approved projects, although the equivalent figure is
around 22% in the case of small island States).
The Multilateral Fund for the Implementation of the Montreal Protocol, which operates through
the United Nations Environment Programme (UNEP), the United Nations Development Programme
(UNDP), United Nations Industrial Organization (UNIDO) and the World Bank, has approved
investments totalling over US$ 2.8 billion since 1991, and has developed over 6,875 projects, of which
about 25% targeted in Latin America and the Caribbean (UNEP, <strong>20</strong>10b). The Climate Change Adaptation
Fund has a target of reaching US$ 100 million by <strong>20</strong>12, with financing obtained from a 2% levy on the
value of certified emission reductions (Climate Change Adaptation Fund, <strong>20</strong>10). To date, the region has
approved projects amounting to US$ 18.6 million.
5
See Climate Funds Update [online]: www.climatefundsupdate.org.