The IFC's New Africa, Latin America, and Caribbean Fund: Its Worrisome Start, and How to Fix it

6 Pages Posted: 19 May 2011 Last revised: 12 Jul 2013

See all articles by Patrick Keenan

Patrick Keenan

University of Illinois College of Law

Christiana Ochoa

Indiana University Maurer School of Law

Date Written: 2011

Abstract

In April 2010 the International Finance Corporation announced the creation of the African, Latin American, and Caribbean fund, a new co-investment vehicle funded largely with commitments from sovereign wealth and pension funds. The fund's objective was to draw on the IFC and the World Bank's strengths in emerging markets to identify and support enterprises that might not otherwise have come to the attention of large investors and thereby help strengthen the private sector and alleviate poverty in some of the world's poorest countries. Unfortunately the fund has, so far, proven a disappointment. It has invested only in large corporations that were already well known to investors. The fund should return to the principles that seemed to motivate its creation: direct engagement with private enterprises, rather than politically-connected financial intermediaries; leveraging the World Bank's superior knowledge and understanding of emerging markets, rather than investing in corporations listed in London or Frankfurt; and providing capital to small- and medium-sized enterprises that would otherwise not have the support needed to grow and compete nationally or globally.

Keywords: sovereign wealth funds, SWFs, human rights, development, Africa, venture capital, microfinance, International Finance Corporation, IFC, ALAC, Sovereign Funds Initiative, corruption, rent-seeking, patronage

Suggested Citation

Keenan, Patrick James and Ochoa, Christiana, The IFC's New Africa, Latin America, and Caribbean Fund: Its Worrisome Start, and How to Fix it (2011). Indiana Legal Studies Research Paper No. 194; Illinois Public Law Research Paper No. 13-44. Available at SSRN: https://ssrn.com/abstract=1839725 or http://dx.doi.org/10.2139/ssrn.1839725

Patrick James Keenan

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

Christiana Ochoa (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States
812-856-1516 (Phone)
812-855-0555 (Fax)

HOME PAGE: http://law.indiana.edu/directory/cochoa.asp

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