WASHINGTON, JANUARY 18, 2011 – The World Bank (WB) Board of Executive Directors approved a US$751.9 million loan today to support the implementation of public policies aimed at strengthening Mexico’s business climate in order to foster economic growth and job creation.
The World Bank recognizes that strengthening economic growth is essential for the country’s development. The loan seeks to support the Government’s efforts to implement legal, regulatory and administrative changes in order to improve the performance of input markets and infrastructure services, update the procedures required to open a business, and facilitate access to new markets. These activities will have a positive impact on Mexico’s competitiveness.
In order to achieve this, the program proposes four closely-linked pillars:
- Strengthen the competitive environment in critical sectors such as telecommunications and the public acquisitions system.
- Simplify existing regulations in order to reduce business transaction costs, particularly those related to foreign trade and taxes, and facilitate the adoption of new technologies.
- Improve the regulatory framework in order to increase access to basic financial services, and foster financial system stability and transparency.
- Promote public-private partnerships in the field of infrastructure in order to expand the quality and coverage of those infrastructure services deemed essential for the productivity of Mexican companies.
- The public policies of the current administration focus on, among other areas, strengthening the Mexican economy through improvements in competitiveness. To achieve that, authorities have carried out a series of activities in the financial, telecommunications and infrastructure sectors which, along with regulatory rationalization measures, will help to create a friendlier environment for economic activities, private investment and poverty reduction.
“We support Mexico’s government in the implementation of long-term public policies. We recognize the country’s achievements in maintaining a solid macroeconomic stability as well as efforts to implement a reform agenda with needed structural reforms. With this program, we seek to support the consolidation of economic growth as well as the generation of quality labor opportunities for a growing labor force demanding them,” said Gloria Grandolini, World Bank Director for Mexico and Colombia.
Some of the expected results include:
- Increasing the number of Internet users;
- Increasing the number of broadband users;
- Implementing ¨framework agreements¨ to simplify public acquisitions;
- Reducing foreign trade paperwork;
- Reducing transaction costs for companies complying with government regulations;
- Increasing the number of financial transactions carried out through cell phones; and
- Increasing private investment in the infrastructure sector.
The organization responsible for the implementation of this loan is the Secretariat of the Treasury and Public Credit, which in turn designated the National Savings and Financial Services Bank (BANSEFI, in Spanish) as financial agent. This is a variable interest rate (6-Month LIBOR) loan, plus a variable margin, with an 18-year maturity period. The opening fee has been set at 0.25% of the total sum. The project is expected to end in January 2012, and will be accompanied by a wide array of consultancy services.
