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BRAZIL: Bank approves fiscal program

The IDB approved its largest fiscal modernization program ever, lending Brazil $300 million—the first of three loans that will total $1.1 billion— to help make both taxation and spending more efficient and fair in 3,800 municipal governments.
The 12-year program, which will be supported by matching counterpart funds, also aims to make local government budget decisions and applications more responsive to citizens’ needs.
The new loan will fund the third stage of a comprehensive government strategy to modernize tax collection and financial management at every level. The idb has already loaned $78 million to Brazil for fiscal modernization at the federal level and $500 million for parallel projects in all 26 states and the federal district (See “To tax and please,” IDBAmérica March–April 1999). In the new program, Brazil will extend modernization to cities and municipal governments in every state.
The program places an unprecedented emphasis on transparency and popular participation, be it through town meetings or computerized information systems, to make sure the modernization process is sustainable and responsive to the needs of citizens.

“The program rests on two foundations—efficiency and transparency,” says Marcio Gomes da Cruz, project team leader. “By transparency we mean not only that budget and spending information will be available to the public, but also that the people will have a say in assigning priorities. This is what brings sustainability to the program.”

Applications and detailed local fiscal modernization projects are already pouring in from scores of Brazilian municipalities that want to participate. The program, which will be coordinated by the federal Finance Ministry, will be carried out in 772 municipalities during an initial four-year phase.

ARGENTINA: Health reform in the provinces

The IDB has approved a $100 million loan to help three Argentine provinces improve the efficiency of their primary health care services. The program, to be implemented as a first step in the provinces of Córdoba, La Pampa and Salta, will also make primary health care delivery more equitable by targeting the low-income population.

Among the program goals are to pay greater attention to user needs and preferences, promote financial incentives to reward quality care providers, and adopt family health care approaches and more cost-effective health-care management models.

At the national level, the project will fund technical support, information systems, and training to prepare for a new and improved health care model that can be applied to the provinces at their request.

The total cost of the first phase of the program, which will be coordinated by the Ministry of Health and Welfare, is $167 million. Local counterpart funds will total $67 million.

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