The Dominican Republic and the Inter-American Development Bank today signed the contract of a $150 million loan to support policy reforms to improve the management of education, health, social security and welfare services.
Dominican Finance Minister Vicente Bengoa Albizu and IDB President Luis Alberto Moreno signed the documents in a ceremony held at the Bank’s headquarters in Washington, D.C.
The new loan will also support the Dominican government’s efforts to maintain macroeconomic conditions conducive to sustained growth and to strengthen public sector budget and financial management.
The social sector management reforms seek to increase the budgets for education and health, especially for programs to raise the effectiveness of investments in human capital development.
The policies will also promote a streamlining of spending on social welfare currently atomized in an array of programs, as well as improvements in the management of high-impact antipoverty programs such as the Solidaridad conditioned cash transfers program.
Under the reforms, social assistance and protection programs will be placed under a single institutional framework and adopt a common methodology to target subsidies and control how beneficiary families comply with their responsibilities under Programa Solidaridad.
As a result of these policies, priority education and health programs should receive significant additional resources for the benefit of the most vulnerable groups of the Dominican population.
The loan is for 20 years, with a five-year grace period and a variable interest rate. The resources are to be disbursed in three $50-million tranches within a 24-month period.