WASHINGTON, December 16, 2008 – The World Bank’s Board of Directors today approved a US$100 million loan to support economic growth in Panama by enhancing private sector competitiveness, consolidating fiscal discipline and increasing public sector accountability.
The Second Competitiveness and Public Financial Management Development Policy Loan (DPL) is the result of close coordination with Panamanian officials and is the second of the program’s two loans specified in the Country Partnership Strategy 2008-2010 that supports specific components of the government’s program.
“This second DPL will support institutional reform and key policies for lasting and equitable growth in Panama, such as fiscal discipline consolidation, accountability, and the modernization of public financial management,” said Laura Frigenti, World Bank Director for Central America.
The loan will focus on:
· Reducing red tape, thereby improving competitiveness.
· Improving professional training and innovation.
· Improving public finance management, including debt management.
· Increasing accountability in fiscal management and recruitment in the public sector.
“Given present international conditions, it is important to emphasize a vision of economic growth favoring the whole of society, creating greater job opportunities for vulnerable sectors by increasing competitiveness,” said Frederic de Dinechin, World Bank Representative in Panama.
Despite the global financial crisis that has directly affected the region, Panama remains among the countries with the highest growth rates in 2009.
The fixed-term loan is repayable in 25 years with a two-year grace period.