Project will promote private and public investment improvements at provincial level, help reform the federal tax system and strengthen decision-making bodies
Argentina will implement a program to promote economic growth and employment in its provinces through income, spending and public investment management improvements as well as investment projects execution with help from a $120 million loan approved by the Inter-American Development Bank (IDB).
The Provincial Management Strengthening Program will promote interaction between strengthening actions and public investment projects, fostering fiscal management improvements through its links with project financing, helping provincial investment management advances come to fruition.
The program will directly benefit the provinces of Salta, Mendoza, Corrientes and Neuquen and indirectly assist all other provinces due to its support of fiscal federalism design reforms and strengthening of their decision-making bodies.
Other specific goals include raising incomes, improving provincial public spending management and targeting, strengthening investment management, and financing investment projects in strategic areas to help create private sector jobs.
Additionally, the program seeks to increase provincial fiscal autonomy and public spending efficiency and efficacy through the upgrading of territorial information, property registries, and tax administration systems, as well as the integrated land registration and identification system and other tax bases and coordination with municipalities.
It will also strengthen financial and provincial investment management by helping implement and underpin human resources, financial administration and budgeting for results, and property administration systems.
Other goals include implementing and bolstering provincial public investment and electronic procurement systems as well as actions to buttress the Interior, Public Works and Housing Ministry’s role as coordinator of fiscal federalism and provincial management.
The program’s main expected results include boosting formal private employment growth vis-à-vis public employment and non-distortive own resource generation, as well as a reduction of spending in personnel as a percentage of own income, and of social spending leakages through improved targeting.
The $120 million IDB loan is for a 25-year term, with 5.5 years of grace and LIBOR-based interest rate. It includes $21.2 million in local counterpart funds.
The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.