Uruguay: US$700 Million Strategic Partnership

October 14, 2010

WASHINGTON, 14 OCTOBER 2010 – The World Bank Board of Executive Directors today announced the new Strategic Partnership with Uruguay for the 2010-2015 period, allocating US$700 million for its implementation. At the same time, it approved a Programmatic Development Policy Loan, worth US$100 million, to consolidate public administration efficiency, promote macroeconomic stability, increase Uruguay’s competitiveness, and generate greater social inclusion.

According to Uruguayan authorities, the strategy focuses on the government’s main objectives. Uruguay’s Finance Minister, Fernando Lorenzo, said that “due to its design process, the strategy is linked directly to the government’s priorities, as it was developed after the government specified its priorities and the programs it intends to concentrate on.”

Uruguay is a small, innovative country with clear comparative advantages, where the World Bank can make use of tailored instruments: loans, technical assistance, and South-South exchanges, in order to support the government in addressing development challenges with equity,” said Penelope Brook, World Bank Director for Argentina, Paraguay and Uruguay. Brook added that: “through this new strategy, we strengthen our commitment with Uruguay, allowing the country to make progress regarding its own development agenda.”

The strategy clearly focuses on promoting South-South and North-South cooperation so that Uruguay can gain access to experts in fields it has an interest in developing, such as climate risk management for the agricultural sector, and share its own experts and experiences in areas where it has widespread recognition, like the Ceibal Plan, with the objective of promoting a greater insertion of Uruguay into the international development agenda.

The Strategy announced today is the result of a widespread process of consultation and exchange, which started on February 2010 with the elected government, government authorities and technical experts, opposition parties and civil society. With regards to the consultation and exchange processes, Lorenzo said that: “they were very useful, very productive processes, allowing the government to identify its main working themes and ways of reconciling them with those aspects in which the World Bank is best placed to provide aid and cooperation to the country.”

The 2010-2015 Strategic Partnership seeks to promote the government’s development vision in four key areas:

  • Reduction of macroeconomic vulnerability and strengthening public sector administration. Will consolidate achievements in terms of macroeconomic stability, fiscal discipline, public spending efficiency and reduction of public debt vulnerabilities.
  • Improvement of competitiveness and infrastructure. Will help Uruguay develop quality infrastructure to expand its economy, while consolidating the progress made with respect to the investment climate.
  • Environmental protection, mitigation of climate change effects and strengthening family agriculture. This area seeks to reduce the economic and environmental vulnerabilities of rural producers, particularly by mitigating the risks associated to climate change. 
  • Greater social inclusion and equity. Will reinforce Bank cooperation in terms of improving the coverage and efficiency of social security systems, primary education and the implementation of public health reforms. Among other things, the Bank will support government efforts to increase the equity, quality and efficiency of preschool and primary education, as well as activities within the family subsidy program to increase the enrollment rate in secondary education among program beneficiaries.

Programmatic Development Policy Loan (DPL) 

In addition to discussing the Bank’s Strategic Partnership with Uruguay, the World Bank’s Board of Executive Directors also approved the first loan for this new strategy for US$100 million.

The Programmatic Development Policy Loan (DPL) seeks to support the introduction of reforms in three main areas:

  1. Public sector management, including progress in the e-government agenda and the implementation of results-based budgeting
  2. Increasing competitiveness, introducing trade facilitation measures, improvements in the business climate and financial market support
  3. Improving social inclusion through social policies that promote equity.

This financial commitment is linked to a variable interest rate, with a 20.5-year maturity period, and a 15-year grace period. 

Note to editors:
Currently, Uruguay has a diversified program of nine investment projects totaling US$257.2 million, plus two grants from the Global Environmental Facility (GEF), a grant for the Uruguayan Parliament, two financing projects to reduce carbon emissions and a series of analytical and technical assistance activities.

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