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IDB Approves $250 Million to Uruguay For Social Sector Program

Will benefit the poorest sectors of the population

Posted: August 23, 2005

The Inter-American 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 years.

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.

Source: IDB







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