IDB approves up to $100 million for poverty alleviation in Dominican Republic

Resources to be employed in CCT disbursements, education and health capacity programs and evaluation impact analysis

The Inter-American Development Bank (IDB) has approved a loan of up to $100 million to support poverty alleviation actions in Dominican Republic. The resources will finance conditional cash transfers (CCT), human capital development in health and education and the first evaluation of “Progresando con Solidariedad" program.

The project is expected to reduce the country’s poverty gap from 12.1 percent in 2011 to 9.9 percent by 2016 and to reach 288,399 households receiving CCTs upon the fulfillment of co-responsibilities in health and education, such as complete vaccination of children between 18 and 29 months. Other goals involve reducing pregnancy rates between teenagers in poor households from 35.65 percent in 2011 to 30.65 percent in 2016 and improving height average of children between 36 and 60 months from 99.30 cm (2011) to 101.57 cm (2016).

Even though poverty rate in Dominican Republic fell from 49.8 percent in 2004 to 40.7 percent in 2001 and extreme poverty rate dropped from 15.5 percent to 10.2 percent in the same period, it remains above the region’s average. And despite the overall improvement, both rates are now higher than prior to the 2008-2009 global crisis — as of 2002, poverty rate was 32.7 percent and extremity poverty rate, 8.2 percent —, which emphasizes the need of continue strengthening of DR’s social services.

With the IDB’s financing, Dominican Republic government will enhance its social protection strategy which focus on CCTs, socio-educational support and connecting households to social services through the “Progresando con Solidaridad” (PROSOLI) program. “Solidaridad” and “Progresando” programs were merge last year in order to better consolidate DR’s social welfare sector.

The IDB loan is for an 18-year term, with an 11.5-year grace period and an interest rate based on LIBOR.