The Inter-American Development Bank today announced the opening of an $80 million line of credit to improve living conditions of and protect the cultural identity of indigenous people in rural Chile.

The present program will initiate a two-phase initiative, the first of which will be assisted by $34.8 million in IDB financing. Both phases will include the beneficiary indigenous communities in the process of planning and carrying out activities to strengthen local institutions, boost agriculture, and make improvements in education and health services.

Beneficiaries will include 12,000 rural indigenous families living in 600 communities that belong to the Aymara, Atacama and Mapuche cultural groups. The program will be focused in two regions in the northern part of the country and three in the south. Many potential beneficiaries live in municipalities that include Indigenous Development Areas, where indigenous communities have historically been located.

The program will include measures to strengthen the management and administrative capacity of indigenous communities to enable them to carry out projects as well as preserve their cultural identity. Workshops will be conducted in the areas of administration, management planning, preparation of funding proposals, dispute settlement, and women's leadership issues. Additional support will be provided to the National Indigenous Development Corporation, the agency responsible for the indigenous issues in the country. The executing agency for the program will be Chile's Ministry of Planning and Cooperation.*

Additional components of the program will finance productive projects, particularly to increase agricultural yields and diversify production, and to provide government agencies with the support they need to provide assistance on a continuing basis.

In the field of education, funding will be provided to strengthen intercultural education, develop curriculum and train teachers, and introduce television and computer-based learning. Health activities will include training, seminars and investments in intercultural health care initiatives, including strengthening indigenous medicine through meetings among practitioners.

Funding will also be provided to design and carry out a communications strategy to define messages for each of the target audiences.

According to Chilean census figures, about a million persons older than 14 years in the country, or 12 percent of the country's population, consider themselves to be indigenous. Recent household surveys indicate that nearly one out of every three Chilean indigenous people live in poverty, a rate much higher than for the general population.

In recent years, the government has been working to reach out to the indigenous population through different kinds of dialogues, among them "Indigenous Peoples' Roundtables" that bring to light and address indigenous demands. The IDB-financed program will respond to the priority needs identified in the roundtables as well as those that have been identified in the workshops held by the IDB project team during the program's design phase.

The IDB loan is for the first phase of the credit line is for a 20-year term, with a 4-year grace period, at the variable annual interest rate, now 7.03 percent. Local counterpart funds for the Phase I loan total $23.2 million.

The Bank has undertaken several projects to support integral development of indigenous communities in Latin America, and it organized the creation of a Fund for the Development of the Indigenous which has been based in Bolivia since 1992 and is administered by indigenous experts.