Bolivia: World Bank Announces New Assistance Strategy for Bolivia and Approves $30 Million for Economic Recovery

The new Country Assistance Strategy outlines a lending program of up to $150 million of new financial resources per year, which includes various projects that aim to:

• Maintain macroeconomic stability;
• Reduce disparities in basic services, such as health, education, and water and sanitation; 
• Continue the education reform program;
• Address inequality, as well as problems that the poor have in generating income;
• Deepen the government’s institutional reform and anti-corruption programs; and
• Support analytical work that focuses on growth recovery and trade, among others.

“The World Bank has supported Bolivia extensively and we will continue doing so,” said Marcelo Giugale, World Bank Director for Bolivia, Ecuador, Peru and Venezuela. “This new assistance strategy combines financial and technical assistance necessary for the country to address the problems of exclusion, inequality, poverty and fiscal imbalance.”

As part of the CAS, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, will continue to support the development of the private sector in Bolivia over these two years. The IFC will focus on monitoring the existing portfolio to ensure that IFC-financed projects are able to overcome these difficult times;  promoting technical assistance and capacity building for small and medium enterprises and microenterprises through a new regional technical assistance facility; and, selectively providing financing for viable, high impact projects in such sectors as the hydrocarbons sector, infrastructure, social sectors, financial markets and mining.    

In addition, the World Bank Institute (WBI) will significantly increase its efforts towards improving governance, with a focus on anticorruption and enhancement of institutional capacity; improving voice, accountability, and inclusion; promoting pro-poor growth; and achieving the Millennium Development Goals, which include halving poverty by 2015.

“This is a very strong package that adapts lending and technical assistance to the country needs in these difficult times,” said John Newman, World Bank Resident Representative in Bolivia. “We are confident that Bolivia will be able to meet the challenges.”

First Programmatic Bank and Corporate Sector Restructuring ProgramAdjustment Loan/Credit

The $30 million First Programmatic Bank and Corporate Sector Restructuring Program Adjustment Loan/Credit, approved today by the Bank’s Board of Directors as part of the new CAS, aims to boost economic growth by strengthening the financial and corporate sectors, lowering systemic risks and reducing the probability of crises. This loan/credit will enhance banking sector surveillance, clarify the function of and increase independence of the supervisory bodies, and upgrade prudential regulations and the prompt corrective action regime.

“The bank restructuring program will lead to better-capitalized banks, and, as a result, increase their ability to restart cautious lending to the private sector, contributing to employment creation and economic growth,” said Yira Mascaró, World Bank task manager for the project.

The $15 million single-currency, fixed spread loan from the International Bank for Reconstruction and Development has a repayment period of 23 years, including 5 years of grace. In addition, the zero-interest $15 million equivalent credit from the International Development Association is repayable in 20 years, including 10 years of grace.

###

For more information on the World Bank's work in Bolivia, please visit: http://www.worldbank.org/bo

Related News