WASHINGTON, November 23, 2010 – The World Bank Board of Executive Directors approved a US$150 million loan today for the Dominican Republic to support the introduction of a results-based accountability system to measure progress in social protection, mainly education and health, in order to expand human capital and improve the transparency and quality of public spending.
“The World Bank’s support complements the Social Cabinet’s actions to guarantee, through the Solidaridad program, access to education, health and nutrition in more than 600 thousand poor households,” said Rafael Alburquerque, Vice-president of the Dominican Republic.
The World Bank recognized the advances the country has made in transforming the Solidaridad Program, which is now integrated in other social programs. Efforts by the Social Cabinet and the Health and Education Ministries are focusing on issues like increasing human capital and closing the supply and demand gap in education, health and nutrition.
“These operations are contemplated in the budget approved by the National Congress and will help us end this fiscal year in satisfactory fashion,” said Vicente Bengoa, Finance Minister of the Dominican Republic.
This is the second transaction in a series of three Performance and Accountability of Social Sectors Development Policy Loans, and was envisaged in the World Bank Country Partnership Strategy with the Dominican Republic for the 2010-2013 period. Through these loans, the World Bank supports the Dominican Government’s reforms in four main policy areas, namely:
- Quality and efficiency in public spending
- Promotion of human capital
- Social protection
These policies have a significant impact on poverty reduction, sustainable development and equality of opportunities.
“This financing will continue to support the country’s reform policies, such as the enhanced performance of the social sectors to promote the build-up of human capital among the poor, improved social spending management, greater transparency, and budget allocations based on good performance,” said Yvonne Tsikata, World Bank Director for the Caribbean.
The Second Performance and Accountability of Social Sectors Development Policy Loan was designed with the following strategic objectives in mind:
- Improve social sector performance to promote the human capital (health, nutrition and education) of the poor by thoroughly redesigning the government’s conditional cash transfer program Solidaridad, and by coordinating key actions in health and education.
- Improve budget management to support joint execution with the social sectors in the Solidaridad program.
- Support the creation of a results-based culture in budget and public spending management, with the gradual incorporation of Performance Agreements in key social sector agencies.
- Improve the transparency of the national budget and civil society oversight.
“The second loan of this series will continue to support reforms aimed at expanding and focalizing social protection on the neediest through the Solidaridad program, improving public spending quality and efficiency and strengthening the social sector’s accountability mechanisms,” said Roby Senderowitsch, World Bank Representative in the Dominican Republic.
The new US$150 million loan will be disbursed in a single tranche. It has a fixed margin and a 22-year maturity period, including a 7-year grace period.