| Contact: Yanina Budkin (54-11)4316-9724
Ybudkin@worldbank.org
Alejandra Viveros (202) 473-4306
Aviveros@worldbank.org
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Social Protection VI Project - Jefes de Hogar (Heads of Household) WASHINGTON, January 28, 2003 — The World Bank today approved a US$600 million loan to finance the “Heads of Household” program in Argentina in order to support the establishment of a social protection network for poor households. The “Heads of Household” program (Plan Jefes de Hogar) gives financial assistance to poor unemployed workers, providing $150 Argentine pesos (about US$45) per month for the head of a household with children under the age of 18 or with disabled persons of any age. In exchange, beneficiaries must engage in a work or training activity. The number of beneficiaries is estimated to be about 1.85 million people, a figure that will decline over the two-year duration of the project. “Since the beginning of the crisis, we have been deeply concerned about the impact on the poorest sector of society of the dramatic increases in poverty and unemployment which have taken place in Argentina. This loan, which provides immediate support to poor households, provides much needed short term assistance while Argentina presses forward with other longer term challenges.” said Axel van Trotsenburg, World Bank Director for Argentina, Chile, Paraguay and Uruguay. “Throughout 2002 we have reallocated significant resources to relieve the social emergency, including to health, education and feeding programs for children. Today we continue these efforts to limit the impact of the crisis among the most vulnerable sectors.” The kinds of work activities eligible under the Program include small infrastructure and community services projects designed to improve the basic social and economic conditions of the poor neighborhoods where they are implemented. In this context, US$100 million under the loan will be directed to small municipalities, particularly those with large numbers of very poor, to help cover the costs of the needed materials and other inputs necessary for these projects. “We expect to have the support of the various parties involved to ensure full execution of the budget in 2003, which will be critical to maximizing the Program’s impact. In addition, we are introducing a new tool called the Social Monitor that provides for the participation of civil society organizations in the monitoring of the program, thus ensuring additional independent sources of evaluation of program implementation, creating greater incentives for transparency and efficiency in the execution of this program –to ensure that the help gets to those who need it most,” added van Trotsenburg. After four years of recession in Argentina, unemployment reached 21.5 percent in May 2002, a percentage that is nearly twice as high in the case of poor households. In this context, the “Heads of Households” program is an important tool with immediate effects, but does not replace medium- and long-term efforts that will stimulate the creation of new jobs. The US$600 million loan from the International Bank of Reconstruction and Development is a LIBOR-based, fixed-spread loan, repayable in 15 years, and has a five-year grace period. World Bank Support for the Social Emergency Program Up to this point, the World Bank has provided support for the Social Emergency Program in two phases. During the first phase, in March 2002, it reallocated US$100 million to the areas of health, education and community kitchens. The second phase, in October 2002, included the reallocation of US$140 million in funds for health and education. Today, a US$600 million loan for a social protection program is being announced, and assistance would continue to be provided for social protection and economic reform in Argentina. |
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