Uruguay

The Bank's assistance program for Uruguay aims to support the Government's objective to increase social inclusion and reduce inequality. To this end, the program will:... Show More + (i) support institutional strengthening for social inclusion, particularly the newly established Ministry of Social Development, the Institute of Women's Affairs (IWA) and by creating mechanisms for NGO outreach; (ii)strengthen the analytical underpinning by building upon previous analytical work, such as the recently completed study on social tariffs, and through regular poverty monitoring, inequality monitoring, and social analysis; and (iii)mainstream social inclusion and stakeholders analysis into project design and implementation. Show Less -

With economic prosperity, based largely on livestock exports, Uruguay was a pioneer in the provision of broad-based social benefits. The major elements in the system... Show More + were put in place in the first half of the century. After the exhaustion of the import-substitution strategy adopted in the 1950s, the country entered in a long period of stagnation characterized by growing intervention by the state in an effort to maintain standards of living and social benefits. Macroeconomic stability deteriorated, contributing in 1973 to a military take-over that lasted 12 years. Since that time, the country has been undergoing a slow but steady effort to overcome the legacy of the 1950s-the fiscal and economic burden of a large state role in the economy, unfunded entitlements, and a weak and protected private sector. Although the Inter-American Development Bank remains the predominant external financier of the country in supporting the current reform program and Mercosur integration, the Government of Uruguay continues to seek financial and technical assistance from the Bank in selected areas. The Bank's country assistance strategy will include the following: 1) base case lending including investment lending in key sectors to enhance benefits of Mercosur integration, to increase private sector participation and to rationalize public expenditures (infrastructure, education, and health); 2) all investment lending identified and designed based upon up-front analytical work, associated with important policy changes, and triggered by satisfactory project performance under ongoing operations; 3) high case lending including an adjustment operation in support of capital market development to help ensure deepening of recent social security reforms, as well as possible additional support for Mercosur-related infrastructure; and 4) non-lending services expanded and concentrated in strategic areas benefiting from the Bank's global experience and technical expertise. Show Less -