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IDB, Ecuador sign $200 million fast-disbursing loan

Inter-American Development Bank President Enrique V. Iglesias and Ecuador’s chargé d’affaires in Washington, Carlos A. Játiva, today signed the contract for a $200 million fast-disbursing loan to assist the country in consolidating its social protection system for the poorest segments of the population and in improving the quality and efficiency of social spending.

The resources will support government efforts to maintain a stable macroeconomic framework, consolidate the social safety net and keep up a minimum level of social spending while improving its effectiveness.

A Human Development Benefit (BDH) will be introduced to replace two existing cash transfer programs to the poor, the Bono Solidario and the Bono Escolar (education grant). Strategies for nutrition and childcare will be improved to reach the poorest population.

The loan will help ensure a minimum level of financing for priority basic social services – education, health and social welfare – through 2005, while also providing resources for countercyclical financing for the social protection system.

In the education sector, the budget for primary schools will be allocated on the basis of the number of students enrolled, coverage targets and poverty and vulnerability indicators. A plan for upgrading human resources in the sector also will be launched.

The public vocational training system will be modernized to encourage a closer match between programs offered by the institutions and the vocational training needs of the productive sector.

The institution responsible for social policy coordination, the Secretaría Técnica de Frente Social, will be strengthened.

The program, which will be carried out by the Finance Ministry*, reflects the IDB’s strategy of supporting better governance, poverty reduction and increased competitiveness.

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