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US $ 1,850 million comes from the World Bank and the IDB for social programs

November 3, 2018 - By Joseph Taylor

Nearly 2,000 million dollars will soon arrive in Argentina after the World Bank (WB) and the Inter-American Development Bank (IDB) approved this Thursday in Washington a series of loans to support the most vulnerable sectors.

The board of the World Bank voted a new financing package with two credits totaling 950 million dollars, with the aim of helping low-income sectors “in an environment of fiscal adjustment, a complex environment,” Jorge Familiar said. vice president of the WB for Latin America and the Caribbean, to Argentine correspondents in this capital.

This package had already been announced in June, shortly after reaching the first Stand-by agreement with the International Monetary Fund, reformulated in September, and which ensures a disbursement of 56,300 million dollars. The Board of Directors of the World Bank has now approved these disbursements, which, according to Familiar, change “the type of instrument”, since until now the organization has worked with investment loans and the operation that was approved today is “budget support”, or be it freely available.

The first loan of 500 million will help cover budgetary needs. This support, known as Programmatic Financing for Development Policies (DPF), recognizes “the country’s efforts and public policies that promote inclusive growth.” This loan seeks to support the expansion of social assistance, health coverage, the business climate and facilitate the registration of new companies.

The board also approved additional funding of 450 million dollars for the so-called Project for the Protection of Children and Young People, which aims to reach 250,000 children who are not yet included in programs such as the Universal Child Allowance.

For its part, the IDB board approved a loan to our country for 900 million dollars, of which US $ 600 million will be disbursed this year, to support, the lender said, “the sustainability of broad social protection programs. coverage among the population with the least resources.

According to a statement released by the IDB, “this first operation will contribute to improving social protection interventions, through the strengthening of the management capacity of the Hacemos Futuro programs, Progresar Scholarships and the Public Tariff of Public Transport, to guide the offer of job training and job search, monitor educational trajectories and implement actions to prevent school dropout, and improve information systems on public transportation automotive, as well as the extension of the social rate to locations outside the Metropolitan Area of ​​Buenos Aires. It is estimated that the impact of this program will fall on at least 4 million people.

“Whenever there is an adjustment process, there are tensions and that is why the World Bank is committed to supporting the most vulnerable,” said Familiar. “This funding aims to protect the families that need it the most, so they do not fall into poverty while progress is being made in laying the foundations that promote inclusive and sustainable economic growth in the country,” he added.

Because of the agreement with the IMF, Argentina promised to reduce the fiscal deficit to zero next year. The agency estimates that PBI will contract 2.6% this year and 1.6% in 2019. The economy could begin to recover only in the middle of next year.

“We are very confident that Argentina will come out well strengthened from this situation and aimed at a future of growth and social progress,” said Familiar. “We are interested in a region that grows, that has prosperity. And having an Argentina with macroeconomic stability, growth and social welfare is a fundamental element “.

The WB has some 7,000 million dollars in projects in Argentina (3,000 are still pending disbursement). In addition to the 950 million approved today, in another six months there will be another batch of 1000 million from the agency. In addition, the International Finance Corporation (IFC), which focuses on the private sector, has committed to add $ 1 billion over the next 12 months.

Consulted by Clarín about the possible impact of the “scandal of notebooks” – in which several Argentine businessmen confessed to having paid bribes to obtain public works – in a World Bank program, Familiar said that when these cases arise “there is always a concern regarding the misuse of funds in the past. But there is a positive angle that that comes to light and that it is fought. “

He pointed out that when there is such a situation, the contracts of the World Bank are reviewed and that they also did it in our country. “We have no evidence that there has been misuse of the projects financed by the World Bank” in Argentina, said the official.

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