The Inter-American Development Bank has approved a $125 million loan for Uruguay to help ensure minimum living standards for vulnerable people amid the health crisis triggered by the COVID-19 pandemic. The plan will support basic levels of income and employment for people affected by the pandemic, both now and in the post-crisis recovery period.
The project is part of a $1.7 billion package which the IDB has earmarked for Uruguay to help it deal with the COVID-19 emergency and its health, social, economic and fiscal consequences.
The program will finance special money transfers to households that hold the Uruguay Social Card (Tarjeta Uruguay Social in Spanish) and people that benefit from the Equity Plan Family Allocations (Asignaciones Familiares-Plan Equidad). As part of this effort, the plan will also support the creation of a One-Stop Digital Window designed to improve the efficiency of selecting and recertifying those who receive such money transfers.
The Uruguay Social Card seeks to guarantee basic access to food and other essentials for people living in extreme poverty. Equity Plan Family Allocations provide economic assistance to complement the income of families that live in precarious conditions and are raising children. They also seek to keep children in school and provide incentives to ensure that they get health check-ups.
The plan will also provide for money transfers to people who rely on the Emergency Food Basket. This a temporary benefit for people working in the informal economy that do not receive aid from other programs and are not covered by unemployment insurance, retirement or other government benefits.
The project will also finance transfers that the unemployment insurance program makes to formal-economy workers who are furloughed or see their hours reduced, including those covered by temporary work flexibility measures adopted as part of Uruguay’s fight against the pandemic.
The beneficiaries of the IDB plan will be more than 225,000 households that benefit from the Uruguay Social Card and Equity Plan Family Allocations, 280,000 that receive the Emergency Food Basket and 120,000 workers receiving unemployment insurance, either because of furlough or workday reduction.
The $125 million IDB loan is over 25 years, with a grace period of five-and-a-half years and an interest rate pegged to the Libor.
About the IDB
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.