Financing for $25 million will help to strengthen the planning and management of public finances and benefit all of the country's population

The Dominican Republic will foster improvements in its management of public funds by strengthening the process of implementing its public policies with a loan of $25 million approved by the Inter-American Development Bank (IDB). 

The country plans to improve its fiscal framework in the middle term as a way to optimize the process of planning, monitoring and evaluating the budget, as well as to modernize the procedures and support systems for the management of public funds. The goal of this project is to generate timely information, with broader institutional and transactional coverage, that helps to improve the government's decision-making process. 

This project expects to strengthen the government's institutional capacity to exercise adequate and efficient control and management of public finances. 

In recent years, the Dominican Republic has achieved significant economic growth and is now one of the largest economies in Central America and the Caribbean. To sustain that growth, the government is seeking a fiscal scheme that will help to increase public investments, especially in social sectors. 

To achieve this goal, the project expects to generate savings in the payment of the public debt by improving the benefits obtained from the investments of funds now available in the Single Treasury Account. Accounts in commercial banks that now hold the funds of state entities will be eliminated, and those funds will be used to pay the public debt. 

The project also is expected to increase the participation of micro, small and medium enterprises led by women in public purchases, which are expected to hit 2.480 by the year 2018.

The IDB loan for $25 million is for a period of 19.8 years, with a grace period of 5.2 years and an interest rate based on LIBOR. It has a counterpart contribution of $5 million.