Uruguay: World Bank Approves US$112.1 Million to Support Government Reforms

"The development policy loan, complemented by a technical assistance loan, will support the implementation of reforms in the areas of tax reform, business climate and social protection system," said Axel van Trotsenburg, World Bank Country Director for Argentina, Chile, Paraguay and Uruguay. "These reforms, and in particular the development of capital markets, will improve the efficiency and competitiveness of the economy with the objective of ensuring equal opportunities for all Uruguayans. These reforms will also contribute to achieving sustainable growth and poverty reduction," he added.

The US$100 million First Programmatic Reform Implementation Development Policy Loan (DPL) is in line with the government's priorities in three main areas: (i) implementation of a tax reform; (ii) the first action package to improve the investment climate and to launch a program that promotes capital market development; and (iii) implementation of efforts in support of the social protection system.

"The main objective of this loan is to provide a clear and measurable framework to implement reforms in three main areas identified as priorities by the government," added James Parks, World Bank task manager for the project.

The second loan approved on May 30th, for US$12.1 million, is the Institutional Building Technical Assistance Loan, whose main objective is to support the actions the Uruguayan government is taking in order to strengthen the performance of the public sector. The main areas that this project supports are customs administration, and monitoring and evaluation for results-based management and e-government. Additionally, the project will facilitate the design and implementation of reforms in the areas of taxes, investment climate and social protection.

"This technical assistance loan supports an ambitious agenda of public sector modernization promoted by the government and will facilitate the achievement of important structural reforms to boost economic growth and promote social equity," said Mario Francisco Sangines, World Bank task manager for the project.

Both projects are in line with the World Bank Country Assistance Strategy for Uruguay 2005 - 2010, which focuses on three pillars: reducing vulnerability, maintaining economic growth and improving standards of living. -The World Bank