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IDB supports Uruguay’s IMF-backed economic strategy

The Inter-American Development Bank today said it supports Uruguay’s strategy and economic program, which is backed by an agreement with the International Monetary Fund and is aimed at resuming sustained economic growth, stabilizing the country’s public finances and strengthening its external position.

“We are sure that the policies established in the context of the IMF agreement and the support of international financial institutions will provide an appropriate framework for rekindling and maintaining sustained economic growth,” said IDB President Enrique V. Iglesias.

The IDB ratified its intentions of providing the financing agreed as part of the global support package offered to Uruguay by international organizations in August 2002. The IDB will proceed with agreed disbursements of existing fast disbursing loans, in keeping with contractual conditions, as well as new operations included in its 2003 lending program.

The IDB expects to disburse resources for Uruguay’s Social Protection and Sustainability Program, in light of the significant progress made in its execution and in attaining its goals. The program seeks to cushion the effects of the present economic crisis on the poor as well as to avoid a deterioration of the country’s social indicators or any backtracking on the efforts to modernize and improve social services and ensure that the poor have access to such benefits.

Disbursements will be made to support the Public Sector Modernization Program, which seeks to improve productivity in the public administration and quality in state-run services. The Bank also expects to disburse resources for the Program for Health Sector Reform, which supports modernization to overcome structural problems.

The IDB is also preparing a financial sector reform operation to buttress the government’s efforts to improve the liquidity and solvency of Uruguay’s financial system.

The IDB considers that the support of the international financial institutions will strengthen the viability of the Uruguayan government’s initiatives to optimize the profile of its public debt maturities through dialogue and direct negotiations with bondholders.

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