The Inter-American Development Bank said today it was prepared to provide financing for Argentina to support economic steps announced by Argentine President Fernando de la Rúa to strengthen the economy and accelerate economic growth.
The Bank said the financing will be part of a larger initiative by the international community to support Argentina announced today jointly by the International Monetary Fund and the World Bank.
The IDB resources will include $2 billion in sector loans and $1.4 billion in investment loans that the Bank is preparing jointly with Argentine authorities. The financing will primarily support structural reforms and investments in the social sector.
At the close of 2000 the IDB had approved $822.5 million in financing for Argentina, of which $400 million was a sector loan approved recently to support fiscal balance and management of social programs.
The IDB expects to provide sector loans to support efforts in the following areas: (1) financial sector reform (2) competitiveness (3) implementation of the pact between the federal government and the provinces for growth and fiscal discipline (4) housing development.
The program for the financial sector will deepen the reforms for which the IDB has already provided financing. The emphasis will be on insurance, pensions, capital markets and some aspects of financial services regulation.
The program to support competitiveness will be directed at supporting efforts to improve the efficiency of public services, including a reduction in costs. In this effort deregulation and improvements in regulatory capacity and infrastructure will be emphasized.
The program to support the federal-provincial pact will be directed at assisting government efforts to harmonize the tax systems of the national government and the provinces. The emphasis will be on transparency in public administration and dissemination of fiscal information by the provinces, as well as modernization and harmonization of the tax systems.
The program to support the housing sector will be directed at improving financing mechanisms to facilitate the access to housing by low-income groups.