Support for Sustainable Economic Growth and Resilience to Climate Change, Which Would Primarily Affect the Poor
WASHINGTON, December 8th, 2015 – The World Bank Group (WBG) Board of Executive Directors today endorsed the new Country Partnership Framework that sets out the objectives which will guide its operations in Bolivia over the next five years, between 2016 and 2020. As a result of the implementation of the programs considered by the new partnership, more than 4.5 million Bolivians, most of them of poor background, will benefit directly and indirectly.
As a consequence of an expansion of the World Bank Group’s portfolio (current and new projects), around 3.8 million people will benefit from improvements in road infrastructure aimed at reducing transportation costs and transit times in Santa Cruz, Beni and La Paz departments, as well as other actions that will allow vulnerable and remote communities to integrate through the road network. It will also seek to increase the efficiency of the Main Road Network’s management in order to stimulate economic activity by integrating productive areas and consumption centers, as well as national borders to promote foreign trade.
The agriculture, rural development, basic services (electricity, water and sanitation) and youth job placement programs will benefit a further 700,000 inhabitants in urban and rural areas.
Between 2002 and 2014, moderate poverty fell from 63 to 39 percent and extreme poverty from 39.5 to 17 percent, while income inequality trended downward. Still, the social agenda continues to be one of the priorities of Bolivia’s development strategy, and the country can count on the clear support of the World Bank Group on this agenda.
“The biggest priority of the Economic and Social Development Plan of the Pluri-National State of Bolivia’s Government is the eradication of material, social and spiritual poverty, under the framework of comprehensive development, while the country continues its search for Good Living,” said Rene Orellana, Minister of Development Planning. “It is good to confirm that, through the 2016-2020 Partnership Framework, the World Bank Group continues its strong alignment with these same objectives by supporting inclusive and sustainable growth, including the environment.”
For the 2016-2020 period, the World Bank Group will emphasize two main pillars: the promotion of inclusive growth and support for environmental and fiscal sustainability with resilience to climate change and economic shocks.
In order to promote inclusive growth, the new partnership will work towards three key objectives: reduce transport costs and increase connectivity between remote communities and the road network; increase access to certain basic services in the poorest communities; and improve opportunities for income generation, access to markets and a sustainable increase in productivity.
In order to support fiscal and environmental sustainability with resilience to climate change and economic shocks, two objectives will be encouraged: strengthen the capacity to adapt and mitigate climate change, particularly by reducing vulnerability to natural disasters; and strengthen the institutional capacity for public resource management.
“The new Partnership Framework with Bolivia enhances our relationship with the country and reaffirms the World Bank Group’s commitment to continue our support for Government efforts to maintain economic growth, reduce poverty and promote the prosperity of all Bolivians,” said Alberto Rodriguez, World Bank Director for Bolivia, Chile, Ecuador, Peru and Venezuela. “In order to provide decisive support to this agenda under the new Partnership Framework, the World Bank Group will provide up to US$2 billion in financing for new operations.”
The Partnership Framework was prepared in accordance with the objectives of the Economic and Social Development Plan of the Government of the Pluri-National State of Bolivia, which responds to the 2025 Patriotic Agenda, which establishes medium term objectives to eradicate extreme poverty and translate growth into well-being. The Patriotic Agenda seeks to promote production capacity and food security by supporting small-scale producers, prioritizing the improvement of infrastructure, basic health and education services and the role of Government to stimulate inclusive economic growth.
“Given that, thanks to its good economic performance, in the last decade Bolivia went from a low-income to a medium-income country, it is now receiving funding from the medium-income country window (the International Bank for Reconstruction and Development),” said Nicola Pontara, World Bank Resident Representative in Bolivia.
The Bank’s current portfolio covers 12 projects totaling US$977 million and includes investments in the agriculture, transport, disaster risk management, climate resilience, urban infrastructure, energy, jobs and public management strengthening sectors.
Furthermore, the International Finance Corporation, the World Bank Group arm dedicated exclusively to investment in the private sector and which in Bolivia has traditionally been dedicated to providing advisory services, established a new local team that in the next five years will focus on financial, agro-industry, and service sector investments. With this in mind, and for the first time in 10 years, long-term credit lines for the financial sector were approved.