WB/Guatemala: More Resources Available for Children’s Health and Nutrition in 83 Vulnerable Municipalities

June 17, 2014

US$340 million loan provides support to strengthen tax administration, increase the results orientation of public spending and improve management of social policies

WASHINGTON, D.C. June 17, 2014 – The World Bank Board of Directors approved today a US$340 million loan to support the Government of Guatemala’s plans to increase fiscal space and provide greater opportunities to vulnerable populations in the country.

The loan supports government actions to increase the income tax revenue-to-GDP ratio from 2.7 percent to 3.2 percent; increase the percentage of children under 1 year old who receive health and nutrition services in the 83 municipalities with the highest incidence of chronic malnutrition and improve the implementation of social programs by including 80 percent of all beneficiaries in a Unique Beneficiary Registry. This way, the “Enhanced Fiscal and Financial Management for Greater Opportunities Development Policy Loan” supports three key areas of the national agenda.

“The Government of Guatemala is highly committed to the promotion and implementation of the necessary measures to achieve higher sustainable economic growth, increased productive investment, prioritized in the areas of health and social protection, as well as to strengthening efficiency in public spending management”, said Dorval Carias, Minister of Finance of Guatemala ad interim. “In this context, the support from the World Bank is particularly relevant”, he added.

The development policy loan also provides support to the Government’s plans to increase the number of effective tax payers by at least 10 percent and have signed frameworks to exchange tax related information with 60 countries. The loan will also help to strengthen the Social Economic Council (CES), the organization which includes representatives from cooperatives, trade unions and private sector to facilitate consensus building on public policies.

“The 2012 tax reform, along with an effort to increase efficiency in public spending, will allow Guatemala to have more resources to assist the poorest and most vulnerable population,” said Oscar Avalle, World Bank Country Manager in Guatemala. “The increased availability of funds will result in more opportunities for all,” he added.

The US$340 million loan has a 25-year maturity, including a 10-year grace period.

Media Contacts
In Washington
Marcela Sanchez-Bender
Tel : (202) 473-5863
In Guatemala
Cesar Leon
Tel : (502) 2329-8000