IDB helps increase efficiency in the administration of social spending in Brazil

The $1.5 billion program includes a credit line and a first operation to support improvements of beneficiaries in child development through the Criança Feliz Program.

The Inter-American Development Bank (IDB) recently approved a Conditional Credit Line for Investment Projects (CCLIP), called the Social Expenditure Modernization Program in Brazil and a first individual operation for the improvement of public policies for early childhood in the country.

During the last two decades, Brazil has experienced an improvement in social indicators. Early childhood and preschool education expanded from 3.5 million children to 5 million. Coverage in primary education is universal and has grown at all other educational levels. Likewise, the infant mortality rate decreased by 60% and the maternal mortality rate by 50%. In addition, between 2006 and 2016, nearly 11 million formal jobs were created in the country. In 2018, an 89% of people aged 65 and over received a contributory or non-contributory pension.

However, Brazil shows results that are below expectations given the levels of social spending. To support the Government of Brazil in meeting the challenge of more efficient social spending, it is proposed to use this conditional line that helps increase efficiency in the administration of social spending in Brazil. This will be done through three modalities: strengthening operational management capacities at the sectoral level; strengthen the strategic management capacities of sector institutions; and improve the provision of high-quality social services. This is expected to benefit all citizens of Brazil, who will see an increase in the quality of social services in the country.

For its part, the first operation seeks to contribute to improving the child development of the Criança Feliz Program (PCF) beneficiary population in a more efficient way, refining and qualifying their actions, for this it will seek to improve the quality of the PCF offers for child development; and strengthen its management. This is expected to expand the scope of the program to reach three million beneficiaries.

The $1.5 billion loan will be executed over a five-year period and has a 25-year repayment term with an interest rate based on LIBOR.