LA PAZ, Bolivia – Inter-American Development Bank President Enrique V. Iglesias met today with Bolivia’s President Gonzalo Sánchez de Lozada to analyze the new government plan and to offer the Bank’s support for emergency measures and the sustainable development strategy that will be announced shortly.
The IDB has been the multilateral institution that offered Bolivia the most support in alleviating the country’s debt under framework of the HIPC initiative - debt reduction for highly indebted poor countries. The IDB’s share of debt reduction is $868 million, equivalent to 36 per cent of the total reduction.
Presiding over an IDB special mission to Bolivia, Iglesias expressed his confidence in the capacity of the country and its authorities to put into effect measures to overcome the difficult economic situation, complicated by regional financial turbulence.
“Bolivia has been one of the countries most affected by the regional crises, and this situation requires timely answers”, he said.
The IDB president announced Bank assistance totaling around $1 billion for Bolivia’s investment plans in the next three years. Of this amount, half of the resources correspond to new operations expected to be approved through 2005. The other half will consist of disbursements for projects already approved.
IDB loans for Bolivia are from the Fund for Special Operations, the Bank’s soft lending window that provides loans to poor countries at very low interest rates.
A total of about $210 million in soft loans are expected to be approved during 2003 - the highest amount for Bolivia in recent years. The financing will support projects for fiscal and educational reform and rural productive development. The IDB Private Sector Department is preparing operations for a total of around $110 million, including financing a natural gas transportation project, and an ambitious telecommunications project.
Iglesias also announced that the IDB Board of Directors will consider approval of freely available resources for Bolivia for a total of $100 million to support measures to overcome the crisis. “These resources will also help the advancement of reforms that will facilitate the return of Bolivia to a road of growth and stability,” he said.
The IDB also received with interest the Bolivian Government decision to revise its Poverty Reduction Strategy (EBRP), mainly in the areas of competitiveness and productivity.
Iglesias indicated that reaching the millennium development goals agreed upon in the framework of the United Nations and achieving the sustainability of the poverty reduction programs will depend not only of improving education and health services, but also on the capacity of the economy to create new productive employment opportunities.
Revision of the EBRP coincides with the preparation of the new IDB strategy for Bolivia. The Bank is supporting workshops and studies to determine policies and actions for development of key areas, such as transportation, natural resources, water and land use, social inclusion and integrated rural development.
During his visit Iglesias praised the permanent coordination between the IDB office in the country and the Bolivian executing agencies. This collaboration resulted in an accelerated rhythm of disbursements that will total more than $110 million in 2002.
Loan approvals for 2002 are expected to total more than $116 million, including financings for projects such as the construction of the Santa Cruz-Puerto Suarez road corridor, which will connect one of the more productive areas of the country with the Brazilian market. Another project will develop Bolivia’s tourist potential, with community participation in the project; and a third will strengthen the country’s capacity for commercial negotiations.
The IDB Group’s Multilateral Investment Fund, which promotes development of the private sector through grants and investments, has played a key role in Bolivia in the microenterprise sector and in supporting further development of the institutional framework to foster private sector activities. The MIF will approve two grants for Bolivia this year for a total of $1.5 million. The IDB will approve additional financing of $2 million for Bolivia during 2002 for technical cooperation and small business projects.