WASHINGTON, April 20, 2010 – The World Bank Group today approved a midterm revision of its Country Partnership Strategy (CPS) for Brazil, which guides the Group’s overall program in the country for 2008-2011. Under the updated strategy, World Bank (IBRD) lending to Brazil is expected to further emphasize the equity and competitiveness agendas. In the first two fiscal years of the strategy, up to now, a total of 27 projects were approved, totaling $6.7 billion. Going forward, after new federal and state administrations have taken office in January 2011, the Bank will start the preparation of a new Country Partnership Strategy for 2011-2014, in consultation with government and civil society.
The World Bank Board expressed strong support for the results achieved under the strategy so far and for the revised engagement approach, which seeks to respond to the evolving needs of this leading middle-income country.
“Brazil and its states recovered rapidly from the effects of the global financial crisis and this is the perfect time to review and fine-tune the Bank’s support,” said Makhtar Diop, World Bank Director for Brazil. “The strategy will hone the combination of Bank Group knowledge and financing to help the country achieve its growth potential, as well as support taking Brazil’s leading expertise to other developing countries in areas such as social protection, fiscal management and clean energy.”
The revision builds on the current CPS, which focuses primarily on long-run, path-setting challenges to improving social equity, environmental sustainability and helping Brazil develop its competitiveness and macroeconomic foundations for growth. The Bank has also shifted its financial support mainly to the states, while strengthening knowledge services to the Federal Government.
Key strategy revisions
Brazil has achieved impressive advances in the social, economic and sustainability areas in the past few years, raising the importance of addressing structural obstacles to long-term growth. In line with this, the Bank Group is rebalancing its lending towards innovative social development approaches and economic competitiveness initiatives, especially in support of the Government’s program of public and private investments in infrastructure.
The Bank will particularly focus support on Brazil’s decentralized government framework, especially in social policies and programs. This will seek to help improve “vertical” integration of health, education and social protection policies across the Federal, state and municipal spheres. There will be a specific strategy for the Northeast, Brazil’s poorest region, focusing on region-wide approaches as opposed to state-specific interventions, to take advantage from scale, learning and integration between states.
In the sustainability agenda, the strategy calls for stepping up support for environmental policy implementation and scaling-up sustainability investments at the state level. Also, as Brazil moves to the implementation of its climate change policy, the Bank will provide strong support to climate change mitigation and adaptation policies and investments, with special focus on promoting low-carbon urban development in Brazil’s largest metropolitan regions.
In addition to project financing, the revised strategy also includes a knowledge program of studies, conferences and technical assistance in areas such as metropolitan development, carbon market development, crime and violence, ageing, job quality and education, that seeks to contribute to the development debate in the country.
In line with the Bank, the International Finance Corporation (IFC), which works with the private sector, has tightened the focus of its strategy to concentrate in three areas:
- Poverty and income inequality, through health, education, and microfinance investments;
- Climate change in the Amazon and renewable energy and energy-efficiency ventures; and
- Improving competitiveness through support for small and medium enterprises and infrastructure projects.
The partnership strategy goes beyond support for Brazil’s domestic programs and contributes to bolster the country’s growing role as an international development partner. The country is one of the top 20 donors to the International Development Agency, the World Bank’s concessional agency for the poorest countries. The Bank is engaging as an active partner with Brazil in global and regional challenges such as climate change, biofuels and infrastructure integration, helping make sure Brazil’s voice and concerns, along with those of other emerging countries, are heard in international discussions.
In “South-South” partnerships, the Bank lends its credibility, convening power and “seal of approval” to help Brazil share and multiply its innovative experiences such as the Bolsa Família, the STD/Aids program and community driven poverty reduction programs.
In the first part of the current strategy, the World Bank has contributed to several key development areas in Brazil, among which:
- Social protection and poverty alleviation. Brazil’s flagship conditional cash transfer program, Bolsa Família, supported by the Bank, multiplied its coverage and targeting, contributing to some 20 million people emerging from poverty. Eighty-four percent of primary school age children in families receiving Bolsa are in school. The new goal is to reach 87 percent in 2011.
- Public sector efficiency and effectiveness at the state level. The Bank has helped implement results-based public sector reforms in states such as Ceará, Minas Gerais, Rio de Janeiro, and Rio Grande do Sul. Programs in these states received some $3.5 billion to improve the quality of fiscal management and service delivery in education, health, private sector development and transport. The new strategy calls for the expansion of the number of states using performance management instruments from the current six to eight, by 2011.
- Deforestation in the Amazon. Under the Amazon Partnership Framework, the Bank contributed to federal and state strategies that succeeded in steadily declining deforestation to 1.3 million hectares in 2008. This included efforts to increase the per capita disposable income in the Northern Region to close to the Brazilian average, offer economic alternatives to deforestation and expand protected areas to 107 million ha by 2009. The goal for 2011 is to reach 120 million ha, an area almost the size of Ireland and Switzerland combined.
- Access to sewage and to clean water. Through 16 projects in the Federal, state and municipal spheres for a total of almost $800 million, the Bank has helped Brazil gradually increase by over 6 million the number of people with access sewage system between 2007 and 2008, and by two million the population with access to clean water. The goal for 2011 is 5 million more in each of these areas, taking the total coverage to 112 million and 169 million respectively.