WASHINGTON, November 1, 2011 – A new World Bank Group initiative will help Brazil’s efforts to eradicate extreme poverty in the country, the World Bank announced today.
The Bank’s Board approved today a US$ 8 billion Country Partnership Strategy (CPS) for Brazil, which will guide the Group’s overall program in the country for the fiscal years 2012-2015 (July 2011 to June 2015). The strategy calls for close coordination with Brazil’s new national extreme poverty eradication program, Brasil sem Miséria, which aims to improve social and economic opportunities for 16 million of the country’s most vulnerable people.
The two-pronged approach will bolster support for Brazil’s Northeastern region – where 59 percent of the country’s extreme poor live – while also promoting inequality-reducing investments in other regions, to help achieve Brazil’s growth potential and mainstream cross-cutting issues such as gender.
“The new CPS is closely aligned with the Federal Government’s request for the Bank Group to deepen itswork at the sub-national level, while maintaining an active national engagement on complex and path-setting issues,” said Arno Augustin, Brazil’s National Treasury Secretary. “This ensures maximum impact of sub-national engagements, through a tailored approach that complements Federal interventions for greatest leverage in addressing Brazil's various development challenges.”
The new Brazil engagement strategy, tailored for the evolving needs of a sophisticated middle income country, received strong support from the World Bank Board. The CPS outlines a program of up to US$ 5.8 billion of new IBRD financing to the Federal and sub-national governments and US$ 2billion in IFC loans for the private sector over the first two fiscal years of the strategy– 2012 and 2013.
Brazil advanced remarkably in many development areas in the last years, and is now an important exporter of knowledge and experience to other developing countries through South-South initiatives. In this context, the CPS is geared towards areas where the combination of knowledge, financing and convening power can make major contributions to the country’s remaining complex development hurdles.
The World Bank Group’s support for Brazil will focus on four strategic objectives to be reached by2015:
- Improving service quality and coverage for the low income population, including help to make pre-school services available for at least85 percent of the poorest 40 percent of the population; increasing the quality and reach of Brazil’s public family health care system; and support for the expansion of affordable low income housing.
- Promoting regional economic and social development, with particular focus on reducing the gap between the Northeast and the richer regions of the country. This includes increasing access to sewage treatment services from 70 percent to 75 percent of households and competitiveness-enhancing investments in transport and clean energy, in support of Brazil’s green growth development model.
- Improving natural resource management and preparedness for climate events, including support for the reduction of the carbon footprint of Brazilian agriculture by at least 100 million metric tons of emissions per year; the expansion of areas under environmental protection by 15 million hectares; and better prevention and resilience to natural disasters.
- Increasing the efficiency of public and private investments, including through instruments such as public-private partnerships, and by enhancing medium term fiscal frameworks, helping increase governments’ result orientation in planning and budgeting, and increasing value for money in human resource and procurement management, especially in states and large municipalities.
- In addition to the flagship extreme poverty eradication program, the CPS is closely matched with other Government priorities, such as the Growth Acceleration Program (PAC), and the Sustainable Amazon Program. This focus on the “how,” as opposed as the “what”, seeks to increase the Group’s value-added to Brazil, as well as promote closer integration between lending, studies, monitoring and evaluation, and other activities.
“In the past decade, Brazil has combined economic development with stability and social progress, lifting tens of millions of people from poverty into the middle class and building a stable economy. The Government’s express goal to push these efforts still further and eradicate extreme poverty is a testimony to Brazil’s impressive achievements, “said Makhtar Diop, World Bank Director for Brazil. “The new Partnership Strategy will help Brazil achieve this unprecedented milestone by supporting social and economic convergence through productive integration and growth, “added Diop.
The new strategy has knowledge generation embedded in the implementation of all operations and in the Group’s financial dimension. It maintains an adaptive structure, allowing the World Bank Group to learn from Brazil’s innovative demands, develop knowledge in partnership with the country and promote strong flows of knowledge transfers to, from, and within Brazil, supported by impact evaluation programs.
The International Finance Corporation (IFC), the World Bank Group’s private sector arm, will continue responding to the needs of a rapidly-evolving private sector with a suite of competitive financial and advisory products, in coordination with the overall World Bank Group strategy. In fiscal year 2011, Brazil had IFC’s largest single country new business and mobilization program in the world. The nature of IFC’s involvement is changing toward a greater focus on smaller, more difficult investments in the Northeast and North, supporting innovation and competitiveness, promoting South-South knowledge transfers and encouraging access to new markets and products, and increasing IFC's support for local government PPP programs in infrastructure, social sectors, and the environment.
“IFC will continue supporting private sector participation in infrastructure, in public-private partnerships in education and health and other areas. Our aim is to expand the availability of essential services for low-income communities and create opportunities for them to escape poverty,” said Loy Pires, IFC’s Manager in Brazil. “Our focus on innovation aims to help raise the country’s productivity and competitiveness levels.”
The 2012-2015 Country Partnership Strategy was prepared in close consultation with the Government of Brazil, and included an extensive process of collecting inputs from state governments, the private sector and civil society organizations in several states and through the web.