Minas Gerais and the World Bank, Partners for Development

Touted as a major step in Minas Gerais’ public finances, a new $450 million loan will go a long way to address the state’s social and economic gains of the past years. Approved last July, the Third Minas Gerais Development Partnership will free up public resources by restructuring existing high-interest debt.

Authorities have vowed to use the newly available resources to widen social benefits and opportunities for the poor. Safety net plans such as Piso Mineiro and poverty survey Porta a Porta will get a boost under the new arrangement, said Governor Antonio Anastasia at the loan signing ceremony, also attended by World Bank Vicepresident Hasan Tuluy and Brazil director Deborah Wetzel.

“This loan confirms our partnership with Minas Gerais, but it is only one of the many steps that we will continue to take for the benefit of the state’s people,” said Tuluy. The DPL aims to consolidate ingoing budget reforms.  As the third largest economy in Brazil, Minas Gerais is home to 19.5 million people, representing 10% of the country’s population.

Although the state has a GDP per capita slightly lower than the national average (US$ 7.749 compared to US$ 8.706), it still faces social challenges such as reducing extreme poverty in its northern region and dealing with intermittent droughts.