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Dominican Republic to receive $70 million for social protection system

The Inter-American Development Bank approved a $70 million loan for a program to improve nutrition and provide better access to education and healthcare of poor families in the Dominican Republic, by protecting and improving their human capital investments. This loan represents the first phase of a $300 million multiphase program.

To achieve this goal, the IDB financing will help the country’s conditional cash transfer program, Solidaridad, transition to a new system that places greater emphasis on promoting increases in human capital accumulation of its beneficiaries, and doing so more efficiently.

Solidaridad, created in 2005, provides cash transfers to poor households provided that they improve the investments they make in education, health and nutrition. Eligible families receive between $20 and $40 per month if they attend nutrition training courses, have their children immunized and ensure they go to school. Some 460,000 families are covered by Solidaridad, approximately 74 percent of the population living in poverty in the Dominican Republic.

The program will also strengthen the management capacity of Solidaridad, as well as the country’s beneficiaries identification system (Sistema Único de Beneficiarios, SIUBEN), and its social subsidies administration office (Administradora de Subsidios Sociales, ADESS). Improvements are needed in the capacity of these institutions to serve beneficiaries in a timely manner and bolder their capacity to generate relevant information for policy decision making and coordination by these agencies and the health and education sectors.

A key component is the coordination of Solidaridad with the supply of health and education services. To promote this coordination, in March 2009 the government set up an inter-sector technical committee that devised a framework of co-responsibilities that is better aligned with sector priorities.

Moreover, the program includes systematic monitoring and evaluation to strengthen performance and accountability. The funding will also help promote the ongoing improvement and transparency of Solidaridad, by developing a monitoring and evaluation system (Sistema de Monitoreo y Evaluación de Solidaridad, SMES), and implementing innovations in the Solidaridad intervention framework.

 The loan has been approved for a 25-year period, with an 18-month grace period, and a Libor-based interest rate.

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