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More help for state reform

The IDB will boost its lending for state reform programs to around $6 billion over the next few years to support the modernization of the public sector in Latin America and the Caribbean, according to Bank President Enrique V. Iglesias.

Speaking before delegates to the International Conference on Reinventing Government organized by U.S. Vice President Albert Gore, Iglesias said that Western Hemisphere countries have come to the conclusion that good government is a prerequisite for successful development.

"The debate on the state has lost the ideological bitterness of the past," he said. "Today the issue is not whether we need more or less state intervention but about the quality of government. It is not a matter of ‘downsizing' but rather of ‘rightsizing'."

The Bank has directed $5 billion in loans for programs to reorganize, streamline or decentralize key government agencies and services in borrowing countries over the past four years. It also advises governments on how to conduct reform programs. Although the job is far from finished, there have been some encouraging results in turning once-bumbling and corrupt bureaucracies into more efficient tools of government.

One example is the IDB-supported customs reform in Peru. By enforcing integrity rules, professionalizing its staff and working with the private sector to unclog bottlenecks, that country turned its customs service into one of its most widely admired state agencies. Not only does it clear shipments within hours, it also has increased its revenues nearly fivefold in six years.

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