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IDB approves $93 million to Brazil to support modernization of public administration and planning

The Inter-American Development Bank today approved a $93 million loan to Brazil to support the first phase of a program for the modernization of public administration and planning in the states and the federal district.

The Ministry of Planning, Budget and Management* will be in charge of the program which will improve effectiveness and transparency and achieve a more efficient expenditure.

Financing will strengthen public policy planning and management capacity, improve human resource management and modernize organizational structures and administrative processes. Administrative transparency and social communication mechanisms as well as a more modern information management and the integration of information technology systems will help promote and implement a culture of institutional change. Cooperation between the states and the federal government and the harmonization and sharing of solutions will be enhanced.

“Brazil’s 1988 Constitution gave subnational governments greater fiscal autonomy by decentralizing revenue collection and distributing functional jurisdictions among the federal, state and municipal levels. In practice all three levels of government participate in several sectors at the same time,”

said IDB team leader Fátima Cartaxo. “State governments must address the near-term challenge of promoting administrative reforms to improve their performance and make better use of the resources available to them. This program will help them achieve this goal.”

The loan reflects the IDB strategy agreed upon with Brazilian authorities in the context of the country´s 2004-2007 Economic Plan to improve public expenditure efficiency, effectiveness, quality and oversight. The plan provides for implementing a new form of public administration that is ethical, transparent, participatory, decentralized and citizen-focused.

Based on the wide diversity of management capacity in the different Brazilian states, the program will be structured in two phases over a period of 10 years. The first phase will concentrate mainly on strengthening crosscutting capacities in state public planning and administration departments, searching for common solutions but respecting the specific needs of the states.

The 20-year IDB loan has a five-year grace period and a variable interest rate. Local counterpart funds will total $62 million.

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