WASHINGTON D.C., November 9, 2010 — The World Bank (WB) approved US$1.25 billion in additional financing to support Mexico’s Oportunidades conditional cash transfer program directly benefitting 5.8 million of the country’s most vulnerable families.
The newly approved financing complements the Bank’s ongoing support for the popular program which provides cash to poor Mexicans on condition health, education and nutrition targets are met, including regular medical check-ups and school attendance and enrolment for children and you kids, among others. In 2009 the Bank approved US$1.5 billion to support Oportunidades.
“Oportunidades is a long term program that proved it can have a beneficial effect on the poorest by making a positive impact on the well being of people and human capital formation. The program has been critical to the elaboration of the Mexican Government’s public policies and we will continue to work toward reducing extreme poverty levels, both in rural and urban areas,” said Salvador Escobedo, Oportunidades’ national coordinator.
With this additional loan, the Bank seeks to finance the costs associated with the program’s operation in 2011-2013, expand its activities and improve its effectiveness, thus improving results for beneficiaries.
“Oportunidades has proved to be an effective and crucial program in the fight against poverty, thus becoming a pillar in the government’s strategy to confront the crisis. Although the economic outlook is positive, it is necessary to maintain social protection networks as they represent investments in human capital, crucial for inclusive economic and social development,” noted World Bank Director for Mexico and Colombia, Gloria Grandolini.
In Mexico, the program began as part of a wider effort to make more efficient social protection networks, thus replacing subsidies that weren’t focused on the neediest groups. The first WB loan for Oportunidades was approved in April 2009. The program reduced school dropout rates between sixth and seventh grade and increased the use of preventive health care services.
Support for the program is based on rigorous external evaluations that measure concrete results in terms of education and health among participating children. The program’s continuation, combined with an expansion in coverage, intends to increase consumption levels in the poorest households, as well as reducing poverty levels via human capital investments.
The project has two key components:
· Support the continuity and expansion of Oportunidades by financing bimonthly cash transfers for families that comply with pre-established conditions.
· Technical assistance to undertake studies aimed at improving synergies between Oportunidades and other social programs within the Mexican government. It will also support implementing the Indigenous People Plan, which will provide a course of action to define an alternative model for managing and operating the Oportunidades program in indigenous areas.
Some of the project expected results include:
· 5.8 million benefitting families.
· Increasing health, nutritional and educational coverage in order to reach poor families through improvements in service quality and increasing enrollment and school assistance rates.
· Increasing the number of children that get promoted from primary to secondary school and from secondary to high school.
This operation forms an integral part of the program of technical assistance, advisory services, coordination and exchange of experiences, knowledge and financing provided to Mexico with the intention of improving the performance of social poverty fighting programs, as well as strengthening social security networks.
The organization responsible for implementing this project is the Secretariat for Social Development (SEDESOL) through the National Oportunidades Program Unit. It will have a total cost US$9.9 billion, US$1.25 billion of which will be financed by the WB and US$8.65 billion by the government counterparty. This is an investment loan denominated in US dollars. The project is expected to end on December 31st, 2013.
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