Development Bank announced the approval of a $250 million
dollar loan to Uruguay to support the development of the
government’s social policy to reduce poverty and strengthen
the sector’s institutions.
The loan will be disbursed in two equal
tranches to help finance a social program to benefit the
poorest sectors of the population that were most affected
by the economic crises of recent years, particularly the
young, of which 49 percent live in poverty.
Upon approval of the operation, IDB President
Enrique V. Iglesias congratulated the firm resolve of the
new Uruguayan economic authorities and reiterated the Bank’s
support for the government’s social commitment.
Although Uruguay’s economy showed
signs of recovery in 2003-2005, this improvement was not
reflected to the same extent in income levels and the condition
of the more vulnerable groups. Social programs and institutions
are adjusting to address higher levels of poverty of an
increasingly structural nature that developed in recent
The program will create more stable macroeconomic
conditions and a strategy of immediate and comprehensive
actions targeting benefits for the population living in
extreme poverty and exclusion. It will carry out the National
Emergency Social Attention Plan (PANES in Spanish), which
is a combined strategy of taking measures for education,
health and nutrition with conditional cash transfers to
complement the income of the poorest families.
The newly created Ministry of Social Development
will present a new institutional framework to promote better
coordination, monitoring and evaluation of social policy.
A single registry of beneficiaries will be created, social
data will be updated and surveys improved.
The program is consistent with the IDB strategy
in conjunction with Uruguay of supporting government policies
to achieve sustained growth and macroeconomic stability
in a context of greater social equity.
The loan is for a 20-year period, with a
five-year grace period, at a variable interest rate. The
Ministry of Economy and Finance will be the executing agency.