Contacts: In Washington: Gabriela Aguilar (202) 473 6768 gaguilar2@worldbank.org In Mexico: Fernanda Zavaleta (52-55) 54804200 fzavaleta@worldbank.org WASHINGTON, DC, November 24, 2009 –The World Bank Board of Executive Directors approved today a US$1.5 billion loan to support economic policies in response to the global crisis. The project supports economic policies to mitigate the impact of the global crisis and strengthen the medium-term framework for sustainable economic recovery and growth. These policies focus on developing measures that generate fiscal and financial sustainability, labor market efficiency and improved integration in the global economy. “The Mexican Government has an active dialogue with the World Bank which includes exchange of experiences and technical assistance in essential areas of the institutional framework. Institutional improvements have allowed us to conduct countercyclical and macroeconomic policies that will contribute for economic recovery and sustainable growth,” said Agustín Carstens Carstens, Minister of Finance and Public Credit. The project accompanies actions that allow countercyclical policies to be applied and, at the same time, promotes structural changes that persuade medium-term development in the fiscal, financial, employment and foreign trade areas. The project will support four areas: 1) Implementation of countercyclical fiscal policies during 2009 while adopting measures to enhance medium-term fiscal sustainability for 2010 and beyond. 2) Implementation of regulatory reforms to foster financial sector access, consumer protection and stability. 3) Enhancement of short-term employment support programs while developing medium-term reforms for labor market efficiency and labor productivity. 4) Improving competitiveness by lowering international trade costs via reduction of Most Favored Nations tariffs and simplification of the trade tariff regime and customs processes. “This is a historic moment for economic policy-making in Mexico. In response to the global crisis, the government has mobilized its renewed capacity to conduct countercyclical policies that facilitate economic recovery and confront the impact of the crisis on lower income families. Simultaneously, the government has made progress in advancing key structural reforms that are central for development,” said Gloria Grandolini, World Bank Director for Mexico and Colombia. “Our support includes technical assistance services and financial resources to support economic and social areas that are of primary concern for Mexico,” she added. Some of the expected results by December 31 include: - A 10.3 percent increase in Gross Domestic Product from non-oil tax revenue in 2010;
- 35 percent increase of outlets that provide banking services, including bank branches
- Increase in the quality of information provided by financial intermediaries to users;
- Implementation of two independent evaluations conducted by development banks;
- An average of 600,000 beneficiaries hired under temporary employment program over the 2009-2010 period;
- A reduction in the average tariff for manufactured imports to 5.3 percent.
The entity in charge of implementing the loan is the Ministry of Finance and Public Credit, who has designated the National Savings and Financial Services Bank (BANSEFI) as the financial agent. The National Banking and Securities Commission (CNBV), the National Commission for the Protection of Users of Financial Services (CONDUSEF), the Ministry of Labor and Social Security and the Ministry of Economy will also be involved in the implementation of the loan. It is a variable-spread loan (6 month LIBOR), to be paid in November 2021. A 0.25% Font end Fee (disbursement fee) has been agreed. The project is expected to be completed by December 31, 2010 and will be supported by a wide array of technical assistance support as an integral part of the WB commitment and dialogue in a broad agenda that includes knowledge and advisory services to support the medium-term economic policy agenda. For more information on the World Bank and Mexico, please visit: http://www.bancomundial.org.mx |
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